I Love Apple. Sell It.

Why is Apple (AAPL -0.57%) going down?

• Chinese sales are disappointing.
• The China Mobile deal hasn't come through.
• They refreshed their product line too fast.
• They aren't innovating anymore.
• Apple Maps.
• iPad Mini is going to eat into iPad Mega's sales.
• Siri won't actually teach me the guitar.
• Google's Android is dominating.
• Galaxy III rocks! Even LeBron loves it.
• Their products are way too expensive.
• Wal-Mart's no-contract, $45-a-month deal will kill them in the U.S.
• Microsoft's Windows Surface is awe... er, never mind, nobody says that. 

We've heard all of these reasons, and many more, to explain why the stock price of Apple is going down. I'm sure that the people and institutions who are selling Apple's shares have done so for these reasons (and others).  Of course, there is no one single reason. What matters is that the perception has changed in the marketplace and the people who were once willing to buy shares are either no longer buying, or selling outright.

There are more sellers than buyers.

If you believe that stock market prices are a forecasting mechanism for the future of our economy or the fortunes of an individual company, you can only conclude that as soon as the market saw what the iPhone 5 had to offer in September, it looked to the future and said, "Not as bright." The shares are down 26% since the recent high of $705.07 , while the S&P 500 is higher.

What to do?

First of all, don't ignore what the market is clearly telling you. No matter how bullish you may be, please at least consider the possibility that the naysayers are right, at least for a while. Second, try and imagine what possible catalysts there might be that would change the minds of everyone who has sold recently and get them to buy shares again. Without more buyers than sellers, the stock isn't going up. 

The naysayers' argument is multifaceted. For one, bears argue that iPhone sales will fall short of expectations, largely because of softness in China. Carriers will slow their subsidies of phone sales here in the U.S., forcing Apple to either accept fewer unit sales or to lower their prices, which will hurt margins. The introduction of the iPad Mini and a brand new iPad 4 on the same day are creating significant customer confusion that will cause a dent to be put in iPad sales in favor of the lower-margin Mini.  Android devices continue to outsell iOS devices due to the significantly lower price tag. The world will come around to the "good enough" argument and stop paying huge premiums for the "insanely great."

It's hard to look at these potential stumbling blocks and call any of them unreasonable. If these things are true, Apple will need to do any number of things that could act as catalysts to get the stock back on track. I'm probably stating the obvious, but here goes:

Reduce prices: Lower the price of their phones and tablets to be ultra competitive, take the hit on margins, and allow people to get "insanely great" for about the same price as "good enough" which will then, obviously, no longer be good enough. I personally believe this is what Apple should be doing, either through across-the-board price cuts or at least offering a lesser version of their latest phone for a very competitive price.  I don't think they will do it in time to stop further decline in the share price, and even if they do, it will take some time to make it up in volume.

Dominate Asia: Everyone is assuming that demand is much lower than previously hoped for in China. If Apple reports that China is on fire, and combine that news with a China Mobile deal, the perception will change quickly. Everyone is expecting the China Mobile deal to come, but I imagine it will come with significantly lower margins than what is currently being modeled. 

Wow us with iPad:The potential exists in the education market and in other business settings (medical, supply chain management, etc.) for the iPad to take hold in a way that none of us could have thought possible. But with Federal funding for education in limbo and lower-priced Android tablets available for kids to use, the window is probably pushed out six to nine months or closing on them until they can offer schools a more affordable version. The tipping point here will be when the school systems can stop buying hardcover books and instead offer a simple tablet with all of the books on it electronically. This will happen, but not yet.

Apple TV: I personally can't wait for this, because I am hoping they will bring an incredible OLED display in a big-screen TV that comes with a content licensing deal that will allow me to purchase all of my shows a la carte, or in some form of package that I choose. In the game to "own all the rectangles," I think this is an important one that Samsung seems to be winning, but is actually stumbling on. Somebody needs to disrupt cable and television's stranglehold on media in real time. As much as you may love Netflix, it's the stock market equivalent of 20-minute delayed quotes.

And just one more thing: Steve Jobs is sadly gone. Last year, I rebuffed early criticisms that Apple could no longer innovate now that Jobs had passed, but it won't be too much longer before you have to start worrying. Apple's incredible run is built on the iMac, iPod, iPhone, and iPad, all Jobs' creations. The magic has always been 3 parts incredible design, 2 parts fulfilling the unspoken desire, and 1 part Ron Popeil "turn." Apple will always have the opportunity to blow us away with something we never expected. Will it be another "rectangle" like the purported iWatch recently rumored, the iTV, or maybe something completely different? A major surprise that opens up entirely new markets for Apple would certainly be a catalyst. This is true for all companies, but somehow seems slightly more possible for Apple. Still, I'm skeptical.

When I consider the naysayers' argument, look at what the market is trying to tell me with price, and then imagine the possible catalysts that could mitigate these things, I'm left with the empty feeling that we're only a few weeks away from Apple trading into the $400s -- and maybe significantly lower. I hope I'm wrong, but until we see some of these catalysts materialize and until the stock price begins to show some sustained enthusiasm, I'd be staying away from Apple shares. 

I love Apple, but I don't love the stock right now.