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Apple's Declining Share Prices – A Time To Jump Out Or Hop In

|About:Apple Inc. (AAPL)

There are rumors that Apple (NASDAQ: AAPL) will finally push through its intention to venture into an uncharted territory. For a company that is highly focused on laptops and desktop computers as well as in mobile gadgets, expanding towards the HDTV industry makes even a big dog in mobile wireless gadgets like a small fish in a big pond.

A supply chain partner disclosed that Apple is going to enter the HDTV market either by the end of the year or by the early months of 2014. If this will push through then this move will set another milestone for AAPL.

This venture can probably spark light at the end of the tunnel for the share prices that requires a lift. However, there are still questions hovering the minds of many investors. Will the entry of Apple in a crowded market mainly dominated by its stiff competitor, Samsung, enough to pull the share prices up?

Many of us are aware of the intense battle between Apple and Samsung (NASDAQ: SSNLF) that has already gone beyond the market and into the court rooms. AAPL has been battling SSNLF in a field it dominates. But with the entry of AAPL in the HDTV market where SSNLF is a key player, it will become the underdog this time, and its survival remains to be seen. It all depends on what arsenal Apple has when it enters this highly competitive market.

According to a report, Apple is going to come up with high definition 3840x2160-pixel televisions with motion and voice control functions. In fact, it has allegedly partnered with an Asian supply chain firm to handle the manufacturing of the products. The production is expected to commence anytime soon.

But in spite of the entrance of AAPL to the HDTV market, the potential revenues are nothing compared to what AAPLE is earning from its existing products. Therefore, its HDTV future performance will have little impact to the company's financial profile and to its share prices.

AAPL Today in the Trading Floor

The main catalysts of AAPL's price fluctuations are still the iPhones, the iPad, the iPod, and the Macbooks sales. But if Apple is successful in getting a good chunk of the market, HDTV sales may soon become a part of its major income generating components in the future. For today, the main focus of investors is the performances of Apple's main products.

Updates regarding iPhone sales and iPad sales can result to mix reactions among the investors. AAPL has been in downbeat trend since the start of the fiscal year 2013 in spite of record sales and revenues. It started at $549.03 per share on January 2. At the end of the first quarter or on March 28, its share price closed at a dismal $442.66. It dropped by a disappointing 19.37%.

On January 24, Apple shares plummeted from $514.01 to $450.50 right after its press release on January 23 regarding its record-breaking sales. The drop in share prices is a horrendous 12.35% in a single day. On the following day, it slid further to $439.88 just because the record-breaking performances missed the Wall Street aggressive estimates.

At the beginning of the second quarter, Apple's losing streak continued and it even dived deeper to end at $427.72 on April 4. This is already an appalling -22.09% year-to-date growth, and still there is neither hint of rebound nor a slight sign of correction.

Investors are now at a loss; analysts are divided. Some wants to jump out of the sinking ship, while others take the occasion as a rare opportunity to jump in while the prices are at a bargain level. Which side will you be in?

One thing for sure, despite the shrinking share prices AAPL remains a stable company. As for now, it is like a Titanic with no iceberg in sight yet. So it is unsinkable. But who knows, an iceberg might just pop up out of nowhere and completely change the tides of time. But that is unlikely to happen on a well-diversified company with so many innovative products at the forefront of technology.

What happened to AAPL right now is the result of diminishing confidence of many investors on a company that is getting stronger than ever with increasing total revenues, increasing net income, and increasing after-tax Return On Equity year over year. Investors will soon realize that they are wrong and a correction will be made.

Those who remained faithful or long AAPL will soon be rewarded for their unyielding trust on the company when others don't. In contrast, those who lost faith will have their own share of pain due to losses from selling their shares at ridiculously low prices when they should have hold on to their stocks. Either way, these are just speculations, but one that is bound to happen and fully supported by sound financial portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Stocks: AAPL