In April last year, Piper Jaffray's Gene Munster and Topeka Capital Markets' Brian White had envisioned Apple Inc hitting a thousand per share mark just within a year, which would reportedly put the tech giant's valuation close to a trillion dollars. However, tech news aggregator Apple Insider pointed out that despite its record share price this year, the valuation of Apple remained at par at the same period last year the analysts had made their predictions.
In August, White said the rise of Apple was different than other tech companies that had peaked, including Cisco, Intel and rival Microsoft. White highlighted the fact that Apple's smartphone and PC shares were at only 64.4% and 4.7% respectively, it left the company more room to grow. Microsoft has a 90% market share at its prime, while Intel had 89% and Cisco had 70% at both their market peaks. Moreover, White said that in contrast to companies who had reached the half-a-trillion valuations, Apple's price-to-earning ratios was just 10.7 times its projected 2013 earnings as opposed to companies like Microsoft, Intel and Cisco with more than 60 times.
Nonetheless, Apple's potential did not necessarily translate into a continuous successful bid to be the top player in the smartphone market. A month after the predictions by analysts, Apple saw its shares crashed more than 20%, losing USD142 per share by the year end. Pundits attributed to Apple's weak share performance to competition from Android-operated phones led by Samsung.
Apple Insider, said however, that this was not the first time the company's shares buckled from competition. In 2008, the late Steve Jobs told employees, "Hang in there... Our stock is being buffeted around by factors a lot larger than ourselves. I continue to believe that our fundamentals - our remarkable people, our clear and focused strategy, our new product pipeline, our 200+ retail stores, our $18 billion of cash in the bank with no debt, etc., will serve us well in the coming months and years."
The write up concluded, "Overall, this seems to indicate that the confidence analysts placed in Apple's fundamentals at the beginning of 2012 was correct, and its impact on the company's actual share price was simply delayed by a misinformed, year-long ripple of irrational trading behavior, as was clearly the case in 2008."
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