Stanton Champion

As TechCrunch, BloggingStocks, and others have reported, Apple’s stock price fell hard both during and after Steve Jobs’ keynote (summary here). Reasons vary for the now $12 drop, but certainly part of this is related to the overall market drop today on the Citigroup news. However, BloggingStocks hit on three other distinctly Apple reasons:

• The iPhone quite frankly hasn’t done as well as expected. Selling 4 million units so far isn’t bad, but they promised 10 million unit sales in 2008. Given that there were no updates to the core product itself (3G support), the expectation for a boost in sales this year beyond that figure will be hard to come by. Expect Apple to make their target but not kill it. End result: the stock is probably overvalued because it’s priced with higher expectations.
• The price drop for the Apple TV lowers its margins. I’m not so concerned about this, mostly because it’s a dirt cheap system to begin with, its specs aren’t dramatically changing, and it’s demand curve will likely change in the coming year because of the new movie rental deal.
• Nobody is really sure about the Macbook Air. It’s a cool product, but at $1,799 it almost seems overpriced. At $3,000 when equipped with a 64GB solid state drive, it definitely seems overpriced. My take is that it’s a gorgeous product as usual, but there’s nothing here to dramatically shift the market for lightweight portables. The people who bought thin notebooks before will find this interesting, but the average buyer will find more value in a regular Macbook at a far lower price point. Expect this product to do well, but not stellar.

End result: the stock just doesn’t have that much to go on. The biggest news from a revenue point of view is the iTunes rentals, but Apple makes very little off of traditional iTunes sales. If this boosts Apple TV sales, that might be nice, but it’s still an unproven product with a poor track record. Rentals might sell more iPods or notebooks, but all that is probably already baked into the price.

On the other hand, someone who thinks the Apple TV will be the next iPod could make a very nice purchase on AAPL today.

What do you think of the Macbook Air?