After another tough week for Apple investors last week, there's one sliver of good news — the quarter is almost over.
That means we're much closer to Apple reporting earnings. Which means we're that much closer to getting an actual read on where Apple's business stands.
But even after Apple reports earnings it might not be enough to help the company's stock regain its mojo.
The big problem for Apple right now is doubt about iPhone 5 demand. Just about every single analyst says he's spoken with supply chain sources in Asia who say Apple drastically cut its orders for Q1 iPhone manufacturing. These analysts believe that demand is weak, otherwise Apple wouldn't cut orders.
When Apple reports earnings it needs to sell 48-50 million iPhones to beat analyst estimates and prove that demand is strong. There are some signs Apple can do that, despite what analysts are saying. Kantar reported Apple's U.S. market share is at a record high, which suggests very strong sales.
Even if Apple does this, though, it still won't be enough! Analysts are bearish about the first quarter of 2013. And that means we have to go through this whole guessing game about iPhone demand for another three months.
A week ago Munster put out a note on why he still thinks Apple's stock can get to $900. Unlike the rest of the analysts Munster didn't cut his target.
In his note, he wrote something pretty interesting about why Apple's stock had done so well for the last five years. He basically said it's been driven by the rumor mill in addition to the company's strong results:
The bottom line is that we believe AAPL needs something that investors can look forward to in the numbers for the stock to work well. We believe a core reason the stock worked in early 2012 was expectations for the iPhone 5 as the stock started the year at ~$411 and peaked at ~$702 in September ahead of the iPhone launch (71% increase at the peak). In 2011, we believe the stock worked (from $323 to $422 at the peak, 31% increase) due to anticipation of the next iPhone and iPad ramp. We are more optimistic about 2013 as we believe Apple will not only launch a television, but also a lower priced iPhone for pre-paid markets in 2014 or potentially sooner.
This year, the rumor mill said Apple was working on a TV. But no TV came. And then the rumor mill slowed down. In fact, it's almost out of business.
Arnold Kim, founder of MacRumors, recently tweeted, "so this is a really slow rumor time. uncharacteristically so." (Part of the reason is that Apple just updated all of its products.)
Apple, like many tech companies, has to deal with goofy, but self-imposed, double standard. Tech companies pride themselves on disrupting the standard way of doing business. At the same time, they themselves are at risk of being disrupted by smaller startups, and bigger tech rivals. Therefore, if a company like Apple isn't constantly releasing a new world-changing gadget, people think it's growing old and ripe for disruption.
Considering the fact that there aren't any really strong whispers about the next world-changing product from Apple, it makes some sense that Apple's stock momentum has slowed.
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