) value has been plummeting for more than three months. Many
critics have blamed it on a lack of fresh and creative products,
disappointing sales figures, managerial problems and a number of
other issues within the firm. While those factors might be
contributing to Apple's decline, investors might need to reconsider
out of China
claim that iPad Mini and iPhone 5 demand is so high that some
Foxconn employees will be forced to work during the Chinese New
Year. Flexium Interconnect, another Apple supplier, plans to do the
Without a firsthand investigation into these suppliers and every
plant they operate, it is impossible to verify the accuracy of this
report. However, this is not the first time that demand inspired
(or perhaps required) an Apple supplier to work during the
holidays. In 2011, one supplier reportedly offered its employees
to work through China's Lunar New Year. At the time, the iPhone 4S
was in high demand and broke numerous sales records worldwide.
This year is not much different. The iPhone 5 has already broken
. Because of these and other past achievements, analysts expect
Apple to announce that it sold
47 million units
during the fiscal first quarter.
If this prediction is accurate, the iPhone 5 will become the
fastest-selling smartphone of all time, beating its predecessor by
several million units. However, if the Phone 5 sells anything less
than predicted -- 42 million units, perhaps -- investors will be
under the impression that the device fell below expectations.
That right there is the core problem behind analyst estimates.
Any analyst can make any claim that he or she wants. It could be
outrageous (one analyst believed the iPhone 5 would sell 10 million
units in one weekend) or impossible (another analyst believes that
Apple will sell more than 10 million televisions in America next
year). If the prediction is made, however, investors take notice.
When Apple fails to live up to whatever lofty expectation analysts
have concocted, investors then think it is time to sell.
To be fair, the investor sell-off is not unwarranted. While the
appears to be a hit
, Apple was reportedly
to release the iPad 4 due to the lagging sales of its
The company also embarrassed itself and its corporate team when
it chose to replace Google Maps (NASDAQ:
) with a . That app of Australian drivers and caused headaches for
consumers throughout the world.
Apple could also be criticized for a genuine lack of innovation.
Only the was truly unique. Unfortunately, the hefty MSRP ($2,199
for the base model) ensured that the computer won't break many
The iPhone 5 is a nice device, particularly for those who did
not yet have an iPhone or were still using an old model. It is not,
however, the grand-scale, highly-innovative product that many were
expecting. It is merely a more polished version of the iPhone
The same can be said for most other Apple upgrades this year,
including the iPad 3 and 4, as well as the iPad Mini.
These are all viable reasons to abandon Apple's stock. The same
cannot be said for headline-grabbing analyst estimates, which are
often inflated and are rarely realistic.
Apple is down nearly one percent this morning. The company has
lost more than nine percent of its value over the last six month
but is still up 25 percent year-to-date.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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