Apple Inc. (AAPL) Bulls Are Being Slaughtered: It’s Time to Buy

A new wave of innovation
Bulls and bears alike agree that if Apple is to remain an iconic brand, and the aspirational brand that defines personal electronics, it must continue to innovate. The dissension erupts when the question of if the company can get back onto this track comes up. In the recent shareholders’ meeting, CEO Tim Cook said that the company was “looking at new categories.” The fans cheer and assume this means a new release is imminent, while the critics guffaw and remark that the company had better be doing more than looking.

The top areas of product development expected out of Cupertino are an Apple TV and an iWatch. Bloomberg recently reported that Citigroup Inc. (NYSE:C) analyst Oliver Chen believes that the iWatch has greater profit potential immediately than a television: “This can be a $6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod — something consumers didn’t even know they needed.” Based on Chen’s margin estimates for the overall industry, while a TV would generate roughly $1.8 billion in profits, a watch could immediately create an additional $3.6 billion in profits.

The problem with the iWatch is that while reports suggest that Apple has a design team in place working on it, the investors are ready for a new product now. Of course, the number of “leaks” that have sprung surrounding the new device suggest that it is further along than you might think. Apple has a history of letting information “accidentally” escape in order to start building hype just prior to a launch. If the company really has that far to go, there would seem to be a reasonable chance any company may get there first.

The article Apple Bulls Are Being Slaughtered: It’s Time to Buy originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.