Nasdaq:AAPL stock opened today at 537.45, a low point that followed a 6-day slump this New Year. The technology giant has seen immense gains over the course of 2013, but 2014 isn’t getting off to such a great start despite the purchase of SnappyLabs this week. The current slump has actually been in effect since fall of 2012, after the company experienced large, unprecedented growth in that year.
Apple Inc. grew steadily from 2009 to 2011 thanks to the cellular phone market, and even the year following the death of company founder Steve Jobs saw intense market gains for the company. These gains peaked in September 2012, when the market closed at over 700 for Nasdaq:AAPL. After that? A slow but clear decline into the slump of mid-2013.
Investment professionals have blamed the Nasdaq:AAPL slump on the fact that Apple has experienced continual losses in key markets such as China. This Dec., however, Apple triumphed in a deal with China that led to the pre-order of new iPhones for the first time. According to Nigam Arora, however, this isn’t going to make a big difference in Apple’s bottom line, due to low Chinese expenditures on cell phones”With about $11.00 per month average revenue per subscriber per month, how many of these subscribers can afford a $700 Iphone?” Arora asked.
Investors seem to agree, since neither this deal nor the rapid acquisition of small, high-tech companies like SnappyLabs has seen a significant positive momentum on the market. It may well pay off to be patient in this situation, however, since China is only now working on the transition from 3G to 4G technology. The deal has already been signed; revenues may simply take some time to start flowing from China.
Drew Sandholm has gone so far as to declare the so-called downturn of Nasdaq:AAPL a “farce,” insisting that there is still money to be made from Jobs’ company with or without the iconic leader at the helm. Nasdaq itself clearly agrees with this assessment, since its website lists Apple Inc. in a “strong buy” position. Frequent traders believe that Apple is still on the rise; investors just need to be patient.
Despite the somewhat disappointing New Year’s slump for Nasdaaq:AAPL, investors should not lose sight of the big picture: over the last ten years, Apple has made gains of more than 500 per share. On top of this New Year’s low numbers, there has only been one other notable depression in Apple stock, in late 2008 and early 2009. The 08/09 slump cost Apple 86 points that were back within seven months; the stock similarly slumped 310 points mid-2013 but it is already on the way up.
Is investing in Nasdaq:AAPL still a good idea? The statistics, and most top investors, say yes. As Cyrus puts it, “Apple Inc. (NASDAQ:AAPL) is one company that doesn’t need to worry much about the market.”
Nasdaq:AAPL has decidedly experienced a market slump this past year, but investors need not worry; the numbers have already climbed halfway out of the hole and are poised to break 600 again sometime in the next year.
by Mandy Gardner