I was following Apple stock for some time. Sometimes it seems irrational, sometimes crazy but there is some logic behind that. Its a psychology. Investors are like a group of wounded animals, who fear every move around, fear that someone will stole their egg (investment value), fear that new technology will depreciate their holdings. Many of them have no or little understanding and knowledge of technology market, have a little grasp of latest technology trends, so they would listen to anyone who sound authoritative on those issues and will be grateful for free advise - even if that advise is completely wrong or the person who offers it doesn't understand a single thing he is speaking about. So the first reason behind seemingly unbelievable moves of investors in Apple is mass psychology, which is a same thing just multiplied by a factor of millions. Instead of fear of a single person, you have summary of fears of few millions. And that really makes Apple stock a good subject for any kind of manipulations.
Second reason: why Apple stock rose until iPhone 5 and fell after that? Forward looking expectations (or in simple words, personal evaluations of future) of Apple results, the best corporate quarter in history of civilisation Apple just had, were already incorporated in climbing up to 700 dollars. In other words, when stock price was 700, investors already believed that Apple would deliver a record quarter reported Jan.23.
So why price dropped afterwards? The simple reason is that 700 peak was correlated with Jan 23; now there will at least 2 quarters which are traditionally weak either for Apple or for PC community in general, after Christmas period and spring. For investors who already obtained 700 dollars peak from the January 23 record sales, the coming quarters are not as attractive, so they began to anticipate weaker sales in coming winter/spring seasons not after Jan 23 but long before, namely in Fall 2012, so that why the bear reaction of Fall-Winter 2012 is related NOT to record sales of Jan 23, but to future spring 2013 sales.
There is nothing catastrophic in that. For every technology company, after christmas and spring are weakest quarters anyway. Panicked investors, however, mistook the signs of coming weak quarters as a sign that in general Apple is falling, while in practice it was delivering record sales and profits. This was quite confusing.
Third reason: in USA and Japan, Apple reached tremendous success in sales with a single model, winning against myriads of Android offerings. In China, it is rapidly making inroads, its coming to Indonesia, 4th largest country in the world and Foxconn established Apple product plants in Brazil, another huge market. In Europe, sales were not good but the reason is that European consumers now in no festive mood as they try to save every euro possible with bad news everywhere and they are famous for being very savvy - they would buy cheaper models available and iPhones are not cheap there at all, but Android is (yes even likes of S3 are much cheaper in Europe than iPhones). So in Europe you see both dampened economic mood (because half of Europe is bankrupt) and availability of many cheap Android models which look at least as good as iPhones or have bigger screens and so on while being substantially cheaper.
The low price factor is true for developing countries in general - in every corner of the world, where are cellphone vendors, you will see mostly Android models - not because consumers there love Google, but because its cheapest of smartphones. They would love buy Apple gear but it will be too expensive for them.
So investors looked whether Apple could sell more under current conditions and for future sales (not current which are record ones) they seem to find no way possible to grow as fast as before. The past evaluations of growth were already incorporated in stock price moving up to 700; the current evaluations are what driving the stock down. IMHO, they forgetting 3 very important things:
1. There are actually many unsaturated markets in developed counties which Apple may and probably will address. It includes first consumer and pro desktops (while the segment is stagnating, doesn't mean that share of Apple products there can't increase). So one have to hear what Cook meant that 2013 will be a year for Pro models. There are no still Retina desktops.There is ultrabook market pretty much owned by Apple, in which Retina MBA are still to come. Mac mini's could get more case space and become true headless Macs. There is an interesting opportunity of touch enabling OS X and therefore W8-like full OS X devices. There is a lot to do in both notebooks and desktops.
2. AppleTV; its a really mystery thing but given how tremendously Apple revolutionized both digital music and digital information markets, AppleTV may be a real coup. Indeed, hundreds of millions of iOS devices are ready terminals for streaming TV; the only remaining one is large screen in room in front of couch. AppleTV very well may end up being a center of digital home automation, one which controls heating, energy use, air conditioning, security and media, news and entertainment distribution in a whole home, across all rooms, across all (iOS) devices, all linked seamlessly with iTunes, all linked through AirPlay and AirPrint. Another huge opportunity is iOS integration in cars - which again is an extension of digital home, so your car will be linked through iCloud to what you watch and listen at home or at office, again seamlessly delivering you what you want, through Siri.
3. As was mentioned before, iOS line will be refreshed again: probably Retina across board, multiple sizes and screens and new iOS7/8 - under best industrial designer in the world now, it remains to be seen how drastically it will be revamped - and the sign of Forstall leaving Apple means that it has to be drastic. And when you will see fresh iOS on fresh iOS devices, consumer wallets will open again.
