Apple shares fall below $400

How the mighty have fallen. The iPhone-to-iPad-to-iPod maker saw its shares sink below the $400 barrier yesterday following worries Apple could miss revenue targets.

Both iPhone and iPad sales have been revised down by Wall Street watchers. It's a far cry from Apple's share price of $705 from last September. What's gone wrong?%VIRTUAL-SkimlinksPromo%

How seriously bruised?

A variety of factors have sullied Apple's gloss; the death of Steve Jobs, a lack of new, innovative products, a disastrous in-house launch of its Maps app, ethical question marks over its Asian supply chain, underwhelming existing product updates and ramped-up competition.

Although the likes of Samsung have increased the pressure on Apple, competition share prices haven't risen sharply as Apple's shares - down 42% from the end of 2012 - have peeled away. BlackBerry has recovered somewhat thanks in part to its Z10 offering. But Research in Motion shares have sunk from almost $18 in January to under $14.

Longer-term, Samsung still looks strong if it can improve its tablet strategy (it already dominates the Android smartphone market though Apple remains the overall leader). And an (even) stronger Samsung - plus Nokia, Sony, et al - could chip away at Apple's margins by forcing it to update its product line faster.

Bite back?

Apple needs to respond. Its last major launch was back in October 2012 with the iPad Mini. Analyst Peter Misek at Jefferies & Co told CBC News he believes Apple is still not close to launching a refreshed version of the iPad Mini, or the next iPad.

Samsung's New Galaxy S4 and the HTC One are due soon. Computerweekly reports that iPhone and iPad sales have been revised down by 1 million each by Sanford Bernstein.

If Apple doesn't decide to return some cash back to investors, the once most valuable company in the world - that title is now ceded to Exxon, again - could see more share price pressure. Long-term value investors though may be tempted to pile in again. The product cycle launch is likely to crank up later in the year. The adjective 'cyclical' comes to mind...
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