Will Apple Hold $400?

Jacob Harper  |

Apple (AAPL) led the tech sell-off and experienced higher than normal trading, closing out the day at a loss of 2.65 percent to finish up at $402.54. Apple dipped below $400 a share briefly during the trading day, a first for the company since April.

Estimations on Apple as we enter the third quarter are gloomy. Jeffries and Co. analyst Peter Misek lowered his expectations of third quarter iPhone sales from 30 million units to 27 million. In addition to slowing iPhone sales Apple faces surges from cheaper smartphone makers Samsung and Blackberry (BBRY).

Apple hit a high of $705 a share back in late September, when the iPhone 5 came out. There’s a growing perception that despite posting record profits and market share, Apple doesn’t have another game-changer ready to go. The year's first quarter saw Apple post their first quarterly profit decline in over a decade. As the smartphone market continues to saturate and Apple faces stiffer competition, the tech giant continues to look to diversify, as Apple CEO Tim Cook hinted in April of exciting new product categories.

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But when those products will debut, or what they even will be, remains to be seen. Apple is famously secretive about the nature, and even the name of their new releases.

Rival Google (GOOG) has an opposing take on debuting products, and has been publicly beta testing the much-hyped Google Glass. And there continue to be whispers of a driverless car technology, which Google does little to quell. Google dropped 1.26 percent today to close at $869.79, although they remain up 22.96 percent on the year.

The only product Apple has in the pipeline is some kind of wristwatch or band with smartphone capabilities. Cook hinted that such wearable smartphone tech “could be profoundly interesting.” But past that generality, there’s little news on the details of the wearable tech product. No set release date, no reports on what the thing will actually do. Even the supposed name of the new gadget – iWatch – is unconfirmed.

Whether the new product can save Apple from continuing its nosedive to go below $400 is unclear. But what is clear is that Apple is facing one of the most difficult periods in their history without a clear game-changing product in their arsenal.

(Disclosures: the author is long AAPL.)

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