Apple’s stock took a big hit yesterday, dropping to a 52 week low. After so much growth for so long, it may seem strange, but it comes directly after Morgan Stanely and RBC downgraded Apple’s stock due to lowered consumer spending. Less iPods sold means less success.
Kathryn Huberty of Morgan Stanley downgrades in large part because the most growth in computer sales is in the sub $1k laptop product range. Guess what? Apple don’t play there. I’ve said it before, Apple doesn’t want to play there. There’s questionable profit margins and zero customer loyalty.
Mike Abramsky of RBC Capital Markets has a similar recommendation in that he thinks that a lower cost iPhone or iPod could turn things around. In other words, he thinks it’s a good idea to gut their current profit model by lowering the price on a product that’s been halfed already and slashing prices on a product line that starts at a mere $49.
Somehow I’ve got to believe that Steve knows a bit better than these two.
