I had looked at Apple stock prior to the iPhone announcement when it was somewhere in the 90 dollar range. I can always look back and say, damn, i'd have a 50% increase by now, but my investments have done well enough that passing it up doesn't bother me. My main concern with Apple was just their general business philosophy. Steve Jobs mentions it often that they are going to build their own hardware because of their passion for software (however the quote goes), which has proven successful lately for them, but for me provides long term concerns. It seems to me that if Apple were to open up and put their OS on Dell or HP, you would see a significant shift in the number of OSX users. But their current approach of using their own hardware and the high price of said hardware just makes me feel like they are severely limiting their opportunities. That is their right, though, and Steve Jobs and Apple is a hell of a lot more successful than I am right now.

I'm sure the Apple fanboys will love me for this post.

ester

Bullygrrl

Don't buy the stock, buy options. Riskier, yes, but a much better way to make a lot with a little.

Odomzig

features are now shrewdly scattered across the product line and the lower price points should create even *more* market domination.

at times like this, it seems like it would be so easy to make a fast fortune by buying slightly low and selling slightly high. unfortunately, with small profit margins, you need a fortune to make a fortune.

alas - the rich get richer, i guess.

Terranova

ibelli

Secret Agent Man

I'll ignore that last sentence. I've never seen Wall Street. I'm no investment banker nor do I have stock in Apple. And I missed the part where I gave investment advice. Lack of confidence on Apples part or not, that is up to interpretation. But hey, wtf do I know?

KingSnakeX4

1. Sales are slowing, and a price drop will re-invigorate them.
2. Other smartphones are entering the market and a $399 price tag kicks those where it hurts.
3. iPhone is a classic platinum turkey -- a high-end phone that sells a million units rapidly but then quickly loses momentum.
4. The new iPod touch was likely to undermine iPhone sales.
5. Apple early adopters would have paid any price. $600 was just short term profit maximization for the launch.
6. Apple has reached a milestone that can justify a price cut. Development costs have been recouped. (It'll be a lot cheaper to produce the next million iPhones than the first, so Apple hasn't given away its margin.)
7. iPod Touch and iPhone share certain parts, thus bringing manufacturing costs down for both products.
8. Apple promised AT&T the price cut if they could offer the iPod touch this holiday season.
9. If Apple learned anything from the Mac war with Wintel, it was that maintaining hardware margins at the expense of marketshare was a mistake.
10. Clearing out inventory to make way for a 3G iPhone ASAP.

Odomzig

Totally right, you never know who is who online. I assure you I'm a professional, but I won't give out details as to where I work, as I post on the Consumerist frequently and I'd rather not risk my job.

You could very well be totally be correct. I'm not an expert on Apple stock, and looking at ratios I'd say that it may very well be a correction (although ratios and fundamentals mean little to a large percent of casual apple investors), however the stock is up due to some hope that there will be some future revenue influx. If apple's bubble is going to burst, as it may at some point, it may not happen for awhile, and the high value will be sustained for awhile.

As far as the drop being due to people cashing out, 2 things to say there.
1. People are very fickle, if a stock goes up, investors feel as if it will continue to go up, so the effect there is marginal.
2. If people are happy with gains and cashing out, and the company is expected to do well, other investors will buy their shares and ride he current up.

So what were seeing is likely a change in confidence, not a mass exodus due to satisfying returns for investors. The market is very unpredictable, and everyone has an opinion, the key is to protect yourself by diversifying. You will be far more likely put your kids through college with a diversified portfolio than with a couple of hot stock tips.

Secret Agent Man

ester

Investment Banker here... And actually, the price drop did not signal a fall in profits directly, but a possible slowing in demand for something that Jobs wants to sell 1 million of in very short order. Dropping a product's price by 1/3rd while it is still a novelty item shows a lack of confidence on Apple's part of there ability to do so. But thanks for handing out investment advice to the masses... I'm sure you've watched the movie Wall Street at least a couple of times, so you're probably right...

@newgalactic:

Please, for my sake, don't refer to Jim Cramer's advice as anything other than advice. In fact, don't get your investment advice from TV. Read (I can furnish a reading list if you'd like) develop goals, and invest in a manner that suits you. If you try to get rich quickly, you will more often than not, get poor slowly.

That being said, it is propably a good time to buy a few more shares of Apple, they will bounce back once earnings for the Fall and Winter are announced, its just jitters right now.

Secret Agent Man

Perhaps some investors are finally getting smart and realizing that Apple is a TERRIBLE investment. High P/E ratio? No dividend? Tons of hype?

And come on, WE are wall street. It's not like you have to join a club or pass an interview to be a part of wall street. go to any online brokerage and put your money where your mouth is.

lincch01

Seriously, everyone predictided a big price drop, there was even precedent as seen in the case of the RAZR. Notice: the sky is not falling.

The Lab

I have not really wanted an iPhone at all and was waiting for the iPod Touch to come out so I would have the option of buying that instead since I didn't need the camera and phone... But now that the iPhone is so close in price it almost seems foolish to buy the iPod Touch when you could unlock the iPhone and at least have a camera in addition to an iPod.

It's just a bit disappointing in some ways but I don't see how they could have avoided it. And by the way, where is the virtual scroll wheel???

UpIrons

"I agree. Apple probably has a warehouse the size of Rhode Island filled with 8gb iPhones that didn't sell for $600.
It's all in the presentation."

Bzzzzt! Wrong answer. No one is mentioning the fact that they completely dropped the iPhone 4GB model. When I purchased my 4GB iPhone it was clear that the 8GB models selling way more units, probably something like 10 to 1. By dropping the 4GB model, Apple saves tons on manufacturing cost and, in turn can pass the savings on to the customers.

Apple could have easily continued to sell the iPhone at $599.00 and made a killing throughout the holiday season. The iPhone is ridiculously popular and will be even more so now that the price has dropped. I don't know why so many of you here are in such denial over that fact.

The_Raven

It's all in the presentation.

bdkennedy1

OGHowie

The-N8

peconi

ben792x

Even with the $200 price drop, the iPhone is still one of the most expensive phones WITH signing a 2 year contract.

Just about every phone on the market from all carriers is heavily discounted, combined with a 2 year contract.

I think the fickle stock drop has to do with the investors getting their hopes up for the ultimate iPod, then seeing one or two things they didn't like, selling like crazy, driving down the price.

chillywilly

Odomzig

KingSnakeX4

Obee Juan

o0adam0o

bobdobbs

I also see this as a precurser to the pricing that Europe will see on the phone. It'd be an unrealistic price compared to other phone prices over there compared to what it actually does.

Also, the internal communication (AT&T) I saw dates the pricing of the 8GB model to Dec 31, 2007 so expect a newer model soon after, if not before...

mikecolione1

Having no next gen in the pipeline for Xmas, this was the only thing they could do. It reeks of desperation.

someToast

bandit

should we expect a 16GB iPhone, priced at $599, for the holiday season? seems like a perfect combination of the iPhone's capabilities and the touch's capacity. . .

mstump

jriga

s5

Frankie2

irlsanders

winkydink

Regardless, consumers don't make buying decisions on what Wall Street thinks. What's good for the consumer isn't always good for the investor.

Rob SuperRob Stevens

I don't remember Apple calling iPhone a business phone, ever.

curiosa863

lithivm

jmdecombe

ester

ester

[finance.yahoo.com]

Note the spike at 1:30. Just some people cashing out on the stock.

It was on the rise for the past week, so why not cash in? After all this was the same stock that was 35 bucks only two years ago.

Mixiboi

newgalactic

We're not buying the new fucking iPods if we got screwed out of 200 bucks.

Take our loyalty and shove it Steve.

William Killer Shatner

jeedai

sumocat

bandit

foureight84

They see the drop as a sign that Apple isn't hitting their numbers, despite Steve's remark that the 1,000,000th iPhone will sell this month.

Personally, I like AAPL, and I like it even better at a discount.

NotMe

buy on rumour, sell on fact!

kibets

jmdecombe

But, Wall St. can be pretty crazy, too, as the price cut pretty much guarantees a HUGE Christmas season for the whole iPod family. Just wait, Wall St. is always knee-jerk reactions, it'll more than come back.

AZTriGuy

Joseph

ester