This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The iPhone Won't Make or Break Apple

Stocks in this article: AAPL CHL

NEW YORK ( TheStreet) -- Apple (AAPL) shares are beginning to rebound, up almost 2% (as of this writing) after another recent decline that placed the stock on the brink of another 52-week low.

Apple is still the cheapest stock on the market. While the company will likely hold that title for the rest of the year, I do worry the Street is still putting too much of the company's success -- or for that matter its valuation -- on the possibility of a new iPhone.

This is despite Apple CEO Tim Cook, recently proclaiming Apple is a "software company."

Case in point: The stock surged almost 3% last week immediately after Brian Blair, analyst at Wedge Partners, said Apple willl release its new phone, presumably called the "iPhone 5S" to China Mobile (CHL) this July. In a note to investors, Blair wrote:

"We believe that Apple will launch the iPhone 5S at China Mobile this July, as it launches the next iteration of the iPhone globally. We believe this handset will be a TD-SCDMA model of the iPhone 5S and will likely begin production next month.

"The announcement of China Mobile will be meaningful for Apple iPhone units, as Apple has yet to direct-sell its iPhone to the carrier and its 710 million subscribers. In addition to China, India is another market that we believe Apple is working to tackle this year, and we understand the company is deploying significantly more people in the nation this year in an effort to grow iPhone/ iPad sales."

That's all well and good. But how much will and should it matter?

I'm not suggesting the iPhone, which is Apple's highest-margin product, is not important. But analysts have been making all sorts of predictions for the past two years. This is despite the company remaining secretive on these matters. Besides, investors might fall into the trap of raising expectations only to get disappointed.

We saw this with the iPhone 5, which was only incrementally better than the iPhone 4S. It's worth asking how much of a difference a new phone can make to the state of Apple today, especially since the quality gap Apple once enjoyed over its rivals -- particularly Samsung, has been shrinking.

Also, given the lack of excitement on the Street in BlackBerry's (BBRY) new phone, Apple has to blow the market's mind just for its device to be considered good.

This is not another indictment on Apple. But the point is, the company is more valuable than what a new phone might reveal. Instead of looking at all of the possible markets that Apple will enter in the coming years, the Street continues to appraise Apple on how fast the gap is closing with its competition. Investors shouldn't fall for it.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,648.61 +291.74 1.68%
S&P 500 2,046.96 +34.07 1.69%
NASDAQ 4,722.2550 +77.9430 1.68%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs