Apple Earnings – a Taste of What’s to Come?

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Apple Store IFC Mall Hong Kong

Apple is set to announce annual earnings on Tuesday, 26th, and speculation is rampant about just how bad it’s going to be.

Shares in Apple (NASDAQ:AAPL) are down 25% from their historical highs last year due to concerns that demand for the iPhone is dropping and the failure of the company to really bring something mind-blowing to the table in quite a while.

But are investors over-reacting to negative news in the short-term, or is Apple never going to be the same company it once was under the command of Steve Jobs?

One factor of concern is that Iphones alone make up over 65% of Apple’s revenue. Concerns over dwindling emerging market economies (Brazil, Argentina), combined with global growth forecast cuts, a strengthening dollar, as well as some less than reassuring downward revisions by some of Apple’s key suppliers have combined to drive prices lower and create fear in investors.

So is a bite of Apple worth the risk?

We’ll get a glimpse into the near-term answer on Tuesday. In the long run, however, it could be said that Apple shares are looking remarkably cheap right now.

What do you think? Is Apple on the decline, or are temporary concerns causing an excellent company with great long-term prospects to be undervalued?

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