Tumbling off the Apple Cart?

With the U.S. economy in “crisis” (Geoge Bush’s description, not mine), it comes as no surprise that everyone’s looking for victims.

The freshest specimen seems to be Apple, which has been riding high for the past four years on the aura of Steve Jobs, robust sales of iPods and Macs and the mainstream embrace of Apple as cool and hip.

While Apple is still as cool and hip as ever, some analysts seem to be getting a little nervous the Apple cart could be headed for a bumpy ride. RBC Capital’s Mike Abramsky has slashed his target price to $140 form $200, as well as his earnings estimate amid concerns about “a worsening consumer spending environment”. He cites research from ChangeWave suggesting there are fewer people looking to buy Macs over the next 90 days, even though he does expect higher iPhone sales.

While analysts establish their ratings based on fundamentals and financial expectations, I just don’t see consumers becoming any less enamored with Apple and its products. The iPhone, the iPod, MacBooks and even Mac desktops seem as popular and cool as every. I’ve heard no one suggest that they were going to buy a Mac or an iPod but have backed off because they’re worried about the economy.

In fact, I would argue Macs are probably a pretty good investment amid tough economic times because they work well and have excellent re-sale value. My sense is many people are going to make smarter choices about the products they purchase when every dollar counts, which means Apple could continue to ride high even if the economy stumbles.

More: For some thoughts about Apple shares, check out Henry Blodget’s recently post in Silicon Valley Insider.

Update: It turns out the ChangeWave reports looked at the spending expectations of corporate IT buyers as opposed to the general population. Given Macs don’t have a huge presence in the corporate market, you have to think Abramsky may have reacted too bearishly. Apple 2.0 has all the details.

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  • Vava

    I don’t know… Macs are like Starbucks lattes – a big part of their attractiveness is the price. Premium price equals premuim product, or so we are lead to believe. The problem is that Starbucks is projecting sliding sales because in tougher economic times people are less likely to pay $2.50 for a coffee, so why would they choose a $1500 entry level Mac when a PC version can be had for half the price? I understand my argument ignores the OS debates and all, but I’d be hard pressed to pay double for something that MAY work better.