Apple may be trading near US$530 today, but will drop to $270 within 12 months, according to ACI Research analyst Edward Zabitsky. He sees competition from Microsoft and Samsung, along with consumers losing interest in the closed iOS ecosystem, as driving factors in Apple's shrinking stock value.
Mr. Zabitsky sees cross platform support for Office, Skype and Skydrive as strong tools in Microsoft's arsenal that help push Apple's stock value down and giving the Redmond-based company more control over smartphones, tablets and PCs at the enterprise level, according to Businessweek. Samsung's Galaxy smartphone and tablet lineup will dethrone the iPhone and iPad, he speculates, chipping away more of Apple's value.
Leadership turmoil will be yet another thorn in Apple's side, Mr. Zabitsky thinks, pointing to Scott Forstall's departure from the company. He also see's trouble for the company without Steve Jobs at the helm, and went so far as to say that the Maps-related headaches Apple is dealing with wouldn't have happened if Mr. Jobs were still alive.
Apple needs to "develop a more unified approach between its Mac and iOS groups. More than a great innovator, Steve Jobs was a unifying force who was able to challenge people to bring their best game," he said.
Mr. Zabitsky seems to stand alone with his pessimistic outlook for Apple's stock, and hasn't offered any data to back up his concerns. Apple controls a substantial portion of the mobile device market with the iPhone and iPad, and accounts for the majority of online mobile traffic, showing that consumers use its products.
Analysts that recently lowered their 12 month target for Apple's stock, such as Michael Walkley from Canaccord Genuity, still see Apple as a strong and growing company. "While our November channel checks indicated very strong sales of the iPhone 5, we are slightly lowering our fiscal 2013 and fiscal 2014 iPhone and iPad due to softer sales expectations in international markets, primarily in Europe," he said.
Other analysts, like Shaw Wu from Sterne Agee and Topeka Capital's Brian White, see Apple growing through the next year and they aren't concerned about cutbacks in iPhone 5 parts orders -- something Mr. Zabitsky could've cited as a reason for his substantially lower target price.
Apple is still growing its iPhone 5 market, too, most recently with over 2 million units sold during its first weekend in China. Shaw Wu from Wells Fargo took that as a positive sign stating, "Apple's announcement this morning (12/17) should help to allay concerns and provide us with additional comfort that the company will either meet or beat our 46 million iPhone estimate for the December quarter."
Mr. Zabitsky relies on complaints about Apple's Maps app as proof that Apple's control over consumers is weakening. Apple had to deal with criticism after dropping Google's Maps for its own service with the release of iOS 6 thanks to incorrect driving directions, mission locations, and no street view option. Apple has been addressing those issues and CEO Tim Cook even said the company is "throwing its weight" into fixing Maps-related problems.
Despite Maps complaints, iPhones are still selling as fast as Apple can make them, and consumer interest doesn't seem to be letting up.
There's always the possibility that unforeseen circumstances could drive Apple's stock down to $270 some time in the next year, but for now Mr. Zabitsky seems to be all alone with his prediction.
Apple is currently trading at $528.54, down 5.36 (1.00%).