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Apple (NASDAQ:AAPL) may not be the best choice for investor to harbor through market crisis. Apple is commonly believed to be a consumer discretionary company and sensitive to changes in the economy. Apple products are unprecedented in ways that these consumer discretionary items transcended popular culture and way of living. Apple sold 16.2 million units of iPhones in the fiscal first quarter alone. With the recent release of iPad 2 many believe that Apple will further expand.
Apple has an exceptionally talented management team and continues to produce products that people love. With the increasing popularity of iPhone and iPad sales, Mac sales also increased by approximately 23% year over year. Demonstrated how Apple brand retained customer loyalty and increase further sales of apple products. Based on a 2010 survey conducted by Bernstein, Apple iPhone users showed a 92% of willingness sticking to apple products compare to the 87% for Google’s Android phone system. Apple’s iPad 2 reported to sold 500,000 units during the first weekend they were available in the market.
Apple’s surged from $199.95 a year ago to a height of $364.90 on February 16th, 2011. Despite the impact brought by Japan Tsunami and Quake, some investor believe the apple stock (currently resting at $339.19 on March 23rd, 2011) able to weather through all kind of crisis. However, there is more hiding under the supply hiccup as a result of Japan Crisis. According to JMP Securities analyst Alex Guana, who recently downgraded Apple stock, there is a sign of demand slow down in Apple product.
Guana noted the investment community is not aware of the changes in the channel data or choose to ignore it. He continued on explained when price adjusted to market expectation (especially when overvalued: a bubble) and the community’s complacency due to Apple’s consecutive average 23% growth record. While Apple’s primary manufacturer Hon Hai, its slow down might have been the result of Apple’s supply chain diversification efforts. It was not the case according subsequent research done by JMP Securities analysts.