iPad, iPad mini, iPhone 5 (white, Minimally Minimall 001)

Some days, you almost wish the Mayan Calendar believers were right and today was the end of the world. Executives at Apple headquarters have likely been popping antacids like Christmas candy as wave after wave of pessimism washes through Wall Street.

Now comes word Apple is destined to be a has-been unless it cranks out an iTV – or cheapo smartphone. The depression-laded missive of the day arrived last Thursday from Toni Sacconaghi, analyst with Bernstein Research. In a note to bewildered investors, he alternated between calling the iPad “an absolute juggernaut” worth $32 billion in annual revenue and forecasting Apple will languish in single-digit growth by 2015…

“We forecast that Apple will likely lose overall market share if it does not bring out a lower-price device”, he wrote (via Forbes). Although he believes iPhone revenue could grow by 40 percent between now and 2014, if no new products are introduced by 2015, the analyst suggest Apple’s market share will fall into the mid single digits.

Besides an inexpensive iPhone of under $300, which the analyst said would attract “first-time smartphone buyers to the iOS platform”, an iTV, larger iPad or monetizing Apple’s iOS advertising, e-commerce or search are also potential “options”.

iTV mockup (AllThingsD 004)

In a burst of reality, Sacconaghi wisely divided Wall Street into short-term and long-term investors. For short-term people worried that Apple can’t top earlier performance or that the iPhone maker can’t increase its already-engorged gross profit margins, he advised that the company stock “will continue to be range-bound”.

In other words, Apple’s share prices will continue to bounce around like a pin-ball propelled by the slightest whiff of bad news – or good.

For long-term investors such as huge retirement funds, “Apple offers a compelling combination of attractive growth, reasonable price and significant future option value”.

Translation: Apple will remain a really good stock to have in your portfolio.

iPad mini (Minimally Minimal 002, white, desk, Magic Mouse)

To back up that believe, the analyst retained his Outperform rating on Apple, shaving $50 off his previous $800 price target. Additionally, he forecast Apple stock in 2013 will earn $49.41 per share, down from $50.57.

The key here is the distinction between short-term and long-term investors. If people want to buy Apple shares when the company announces monster numbers and then sell-off their holdings when there is a rumor that a supplier has a hangnail, then so be it.

But such fair-weather investing runs counter to both stocks 101 and the fact that Apple is a financial gargantuan not likely to run aground due to a bad week.

What do you make of all this back-and-forth predicting the demise of Apple?

iPad images via Minimally Minimal.

  • I never believe analyst as I know some “buy” news and pay bloggers to manipulate the stock price and make huge profits. It is just the way it is. We all know apple is cooking something big but since they won’t say, let it be a big surprise.

    We are still seeing Steve jobs approved products. He most likely left 3-4 years worth of stuff down the pipeline and even if it wasn’t true I don’t think one man could come up with so much tech, it was a team effort and that is what apple always been a team of people doing what they know best, built good tech that people want.

    • I completely agree with you. I was reading this stupid article an had to stop a quarter through. These analyst, especially Gene “Mustard” Munster are a joke. This article is a complete waiste of Internet space. We( the one who have been educated on the matter) know these writer/bloggers/analyst are crooked and all they care about is money.

      As for job, I could see his succession plan running at least another 2 to 3 years. Apple future doesn’t depend on an TV. How edifice of a statement.

      • Apple future is all about which company can come out with an actual iPhone and ipad killer instead of lame copy cat cheapo devices..

    • “We all know apple is cooking something big” um i see no sign of that at all..

      • Yujin

        Tv is one thing the signs are there just adjust to the secrecy and educate yourself in economics…. Apple will have around 130+billion in cash and I’m sure they can release products that are risky…mean while we all know that android will take the lead cause cheap tablets sell well. For those of us who believe in better and more well designed tech then apple is our go to gadget.

  • Apple does not need the ITV to survive but if they want to be known as the top leader in the tech game then it would be a good idea. As for downmarket products I think that would be an excellent idea. I think Apple has an opportunity right now to claim the position that they lost in the 80s and 90s and that is the king of personal computers. Thanks to the missteps of Microsoft under Ballmer combined with Apple’s stellar success over the last decade the time is right to put a nail in Microsoft’s coffin by going mass-market. Keep the high end lines as is but also offer a more “entry level” option in each category: ios based media player, phone, tablet, laptop and desktop.

    • A TV is too easy… yeh yeh big ass over priced iPad/imac device that runs IOS..wow how fun

      • If ‘iOS’ comes to an iTV, expect it to be a custom built ‘iOS’ for it. It won’t be the same EXACTLY + iPad has an own experience, just like iPhone… Have both devices, though they resemble each other, they still manage to show what just IT can do for your usage. // Satisfied buyer

    • MS got lazy. They had such a tight grip on the PC world… and they let it all go to heck. Vista was the breaking point for many consumers (such as myself) and they almost won me back with the XBOX360… but alas… My relatively new 360 received the wonderful RedRing of Death, something that i have never experienced as a gamer since 1989. A console just dropping dead? No thank you – and MS expects me to just go out and get it fixed or pay $200-$300 for another one? Nope. I’m done. I have Zero faith in MS. Bill Gates is a great guy, he is very charitable as is his wife… but the products that MS cranks out are substandard. I was practically thrown over to the Apple side.

  • thor_molecules

    Single digit market share by 2015? Wow, that’s a pretty bold statement. While on the whole I think his analysis is poor, I think that his overall point has some merit.

    It is true that the iPhone 5 is being outsold by the 4S. So it appears — for the moment at least — that the ridiculous sales numbers we’ve come to expect from Apple may have finally leveled off.

    That isn’t necessarily a bad thing mind you. It just shows that you can only sell so many units before quite literally, everybody and their mama has one.

    That said, I do expect their slice of the market to decline in the coming years, though I think it will be mostly due to increased competition. But fall into the single digits?

    I wouldn’t hold my breath.

  • I just wish apple had some real competition cause as it is now hey will keep releasing these boring updates tat just makes profits cause they have no reason to do anything more.

  • If jailbreaking dies then i will leave iphone but keep my iPad and mac book pro..

  • This guy is nuts. Does he know what company he’s talking about? Apple stuff isn’t cheap – their pricing model is what makes them Apple. And their market strategy is both genious and recession-proof. The upper class will always be able to afford
    Apple stuff, so revenue from that demographic will never decrease by much; while Apple products are either barely in arm’s reach or just out of arm’s reach for the middle class – making Apple products something to save up for. Given the brand recognition that Apple has established for itself, and the Apple ecosystem where every product points back to the company; each product being a “gate-way” product into the Apple ecosystem and prompts future purchases within said ecosystem — Apple is not in any kind of danger.

    No, they do not do massive sales like other companies. But you have to put things into perspective. Porsche does not move as much product as Honda, but it doesn’t have to. The name Porsche sells itself, the prices are higher, and you are paying for a superior product. The same with Apple.

    1. Apple will never make a “cheap” cell phone. Apple is not in the business of making a “cheap” anything – they are in the business of making quality products. You get what you pay for – and if you want quality, you pay the quality price. Plus… how is FREE not cheap? Everyone has a cell phone… who cares if you are locked into a contract with a carrier? You are still gonna have a cell phone bill… And you can get the iPhone 4 for FREE! Same goes for Android devices… and the cell phone bills are exactly the same price… So… I don’t get the argument.

    2. Apple is probably not going to put out a larger iPad – thats just stupid.

    3. Apple does not NEED to put out a TV. They probably will not make near the revenue in the TV market that they make in their other markets. Apple will have to introduce something revolutionary in order to even begin to compete in the TV market… a market that has been established for decades. However… I still foresee such a product eventually. But they don’t NEED to enter the market.

    Now as far as the stock goes… yeah… every stock goes up and down. Apple stock has gone down by a large margin. But what do you expect? The stock was ~$750 a share! If I had stock in Apple while it was worth that, I would sell it all too! And then I would buy a bunch when it hit ~$500-$550 and then sell it all again when it went up. The stock market is not about holding onto stock for dear life… its about making money. Didn’t this analyst get the memo?

    These analysts are idiots.


    • Steve Jobs didn’t set out with the intention of Apple being high end only. They got there because they were beat in the market by MS. The Macs catch phrase was “the computer for the rest of us”

      Now things have turned out great at the top but that doesn’t mean the opportunity to broaden its market is a bad idea.

  • Another issue that comes with the territory is once you’ve reached the top, its easy for miserable, lonely, hateful people to take pot shots at you. No company can dazzle everyone every year with everything they do – its just impossible. We have come to expect an unreasonable level of performance from Apple. Our expectations have become absurd. You don’t hear these accusations being targeted at Samsung and Microsoft… but then again… you don’t see people lined up around the corner of a store waiting for their products… do you?