Why Apple May be Strongly Bearish

Although Apple (AAPL) is launching extremely interesting products, most of them useful for every individual, the stock seems to be on the verge of violating the upward movement. AAPL is almost ready to hit the 52 week low mark. No, I ain’t a pessimist. The products, especially iPad, are very useful but they can defy the law of market. In the next few months, we will definitely see a plunge in the stock price. And there are many reasons that compel me to say this.

The market in which apple is operating is crammed with competitors and it’s tougher than ever to derive maximum revenue. iTunes is a convenient way to purchase MP3. However, the same business model has been adopted by many companies, which is quijte similar to the Apple ones. Moreover, the content, music that is, isn’t Apple’s production. You will get the same content all over the web.

Though iPhone is an incredibly adorable phone, competitors of Apple have come up with similar models with improved functions and applications. You can get the same look and feel in models introduced by Nokia (NOK), HTC, Samsung (SSNLF.PK), etc. Google too have introduced the new NexusOne mobile phone, which has an open source operating system Android. With increasing competition, similar or better features, Apple’s iPhone is losing value rapidly.

So, the only thing that’s driving Apple is their desktops. They are known for their superior quality, convenience, high performance, better usability especially while using media tools like movie making, photo re-editing, music editing, etc. Though there are many other players in this market, no other company is able to reach this level of superiority. So, we can say that Apple is still a leader in desktop market.

However, there are certain things that will snatch this privilege as well from Apple. Firstly, it competitors have managed to steal the applications, performance abilities, look, feel, etc., from Apple in other sectors, they will definitely introduce desktops similar to those of Apple. Secondly, the recent market shows a considerable fall in revenue of PC makers. And this is a great concern for all those who have invested huge sum in such stocks.

Here is another observation that supports my view quite efficiently. Technically, the AAPL stock experienced considerable growth from March 2009 to January 2009 (good news for investors). However, there wasn’t any proportional increase in sales volume of Apple’s products, which is definitely a great concern for investors. This is an indication that very soon the market laws will compel the prices to plunge.

Recently there was a raise in sales volume because Apple was all over the media due to the introduction of its new iPad. However, this happens every time Apple introduces a product.

Bottom line for investors:
If you learn about the introduction of any new product quite similar to iPad or its desktops, sell the stocks.