Is Humbled Apple Ripe to Buy?

While many were expecting Apple (NASDAQ:AAPL) shares to surge past $700 after the iPhone 5 was released toward the end of the last quarter, they’ve actually done the opposite, weighed down by supply shortages and public relations nightmares. The company’s market capitalization below the $600 billion level this past trading week

Friday’s close — $629.71 — was down 10.6 percent from an intraday high of $705.07 reached on September 21, the day Apple released the iPhone 5. That 10.6 percent decline equates to over  $65 billion in market cap.

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Apple’s new map app, which in iOS 6 replaced the Google (NASDAQ:GOOG) Maps based application that had for years come standard on all iOS devices, was the beginning of the stock’s tumultuous turn downward. Widespread complaints about the app culminated in Apple CEO Tim Cook publicly apologizing for the platform’s being released before it was ready, and suggesting that iDevice users turn to rivals platforms for their mapping needs, including Google’s online application.

Then there have been supply issues — despite higher initial production levels than with the iPhone 4S, many customers pre-ordering the iPhone 5 were faced with wait times of 2-4 weeks. Furthermore, some of those devices were arriving with scratches on what buyers expect to be pristine casings. News broke last week that the scratches were the result of hurried production at Foxconn facilities in China, where employee rights are still reportedly being violated in an attempt to meet Apple’s supply demands.

All this has clouded what the company has done right — namely, releasing a wildly popular iPhone update, which despite lower-than-expected first weekend sales, still broke sales records. Demand for the iPhone 5 remains robust, and many analysts still believe it’s only a matter of time before the stock catches a bid and rebounds. Potential catalysts for that rebound include the upcoming September quarter earnings, and the widely-expected iPad Mini launch, which is being projected for next week.

Apple shares are still up over 70 percent since last October, when they also temporarily dipped after the iPhone 4S debuted. Investors jumping ship with that hiccup missed out on astronomical returns over the last year, and those bailing ahead of this holiday shopping season are sure to do the same. Instead, the stock’s poor performance in recent weeks should perhaps be viewed as an opportunity to buy shares at a discount.

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