Is Carl Icahn Right About Apple?

It's been a brutal week for Apple (NASDAQ: AAPL  ) investors, unless your name is Carl Icahn.

The iEverything maker's stock tanked in the wake of what's widely been labeled one of the most disappointing Apple launches in some time. True, the iPhone 5s is undoubtedly a best-in-class product, but the two main growth drivers -- a low-cost iPhone and a China Mobile (NYSE: CHL  ) deal -- were both nowhere to be found.

However, Icahn (or should it be iCahn for his love of Apple?) has made a fortune by bucking the consensus and then proving it wrong. Not only has he been bullish on Apple for some time, but according to reports, he also used this week's sell-off to significantly increase his stake in the tech giant. So is he right? Should investors consider adding Apple, even after it let them down? In this video, tech and telecom analyst Andrew Tonner sifts through the rubble to see whether there's still an attractive opportunity in Apple.

It's true that the iPhone 5c was a let-down. However, that doesn't mean Apple's stock still can't soar. For it to happen though, a few critical things need to fall into place. In The Motley Fool's special free report, "5 Secrets to Apple's Future," we outline the key factors every Apple investor needs to watch. Just click here now for your free report.

 


Read/Post Comments (8) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On September 15, 2013, at 3:17 PM, techanalyst1 wrote:

    What has changed since it was under $400 twice? They got NT Docomo.

    They came out with a refresh phone in the 5S, not enough to entice most to just buy it.

    They came out with a "cheaper" phone which is not so cheap.

    They failed to come out with a larger screen phone.

    They probably won't come out with a larger screen phone for a year and so Samsung and the other smart phone makers can gain share.

    Sure it could soar. Ichan has a large $ amt of stock but it's barely a blip in the entire float of the company.

    I guess we could wait for his dinner with Tim Cook to see if somehow he convinces him to borrow more money to buy stock so Carl can profit but why should Tim comply? If he does nothing he can use what money they do have from the debt they offered to buy it back cheaper.

  • Report this Comment On September 15, 2013, at 3:44 PM, 512ke wrote:

    How can a low cost iphone be a growth driver when said product does not exist?

    How can the iPhone 5C be a disappointment when it has not even gone on sale yet?

    You don't know if the new phones are selling well or not. That is exactly like a doctor declaring a patient dead without checking his pulse.

    It doesn't matter if everyone around the doctor is screaming "he's dead!" Without sales figures you cannot be declaring that a product is a failure or a success.

    My new tee shirt says "I'm with Carl" and it has a big Apple logo with a money sign going through it.

  • Report this Comment On September 15, 2013, at 4:52 PM, angelakolios wrote:

    Carl Icahn is the reason many people have lost their jobs. He buys companies and then sells them piece by piece.

    Carl Icahn is not a nice man to the working people of America.

  • Report this Comment On September 15, 2013, at 5:07 PM, Mike30606 wrote:

    Much has been made over the lack of a "cheap" iPhone for the China Mobile system specifically. I think if there were such a product Apple would have to offer it to all of their loyal carriers too, which would likely be the end of their highly profitable iPhones. I for one am glad that a "cheap" iPhone was not produced. For Apple it is quality (read profitable) not quantity (read unprofitable) that makes it such a great investment. In all of my investing days I have never seen such a great investing opportunity.

    As for China Mobile, I think that agreement had not been in place prior to now due to their system. I think the 2 new iPhones were granted access to China Mobile, because they will actually work well on their system.

    As for the dip in Apple stock after the iPhone release, I was a buyer! May Mr. Carl Ichan and Apple continue to buy with me.

  • Report this Comment On September 15, 2013, at 5:46 PM, Mentallect wrote:

    I had an Apple computer 10 years ago, and other Apple products before the first iPhone hit the shelf. Apple has lost its touch. Why would anyone buy an overpriced iPhone 5C when its just a plastic toy iPhone 5? Why not just buy the iPhone 5 instead?

    Market share matters. This is business school 101. Apple is hemorrhaging opportunities in Asia and India. Incomes there cannot support a $500+ phones.

    The iPhone 5S is too small. The Apple buzz is gone. Samsung has outflanked them. The HTC One is better than the 5S (too bad HTC does poor marketing). Market saturation has occurred, and unless Apple released a 4.7 inch iPhone 6 and a phablet, they will just be another once great company that lost its way.

  • Report this Comment On September 15, 2013, at 6:06 PM, Mvitkovi wrote:

    1st Motley Fool Post -

    Market share matters. No doubt. However, that doesn't mean a company (Porsche is an often cited example in my B School) should continually sacrifice high margins to obtain higher market share. At some point, this either a) dilutes the brand, or b) the company's products become commodities.

    Apple has chosen to take the risk that preserving the brand, while trying to maintain the margins, is the best decision at this time. In a year, these new 5S and 5C products might be slashed $200 a pop, and Apple might begin to reverse course towards market share.

    Personally, I'm an AAPL bull on the technical, I think even with a significant error margin, the cash-on-hand alone can justify $125+ a share. The P/E cheapest in 10 years...

  • Report this Comment On September 15, 2013, at 8:06 PM, Justice007 wrote:

    " True, the iPhone 5s is undoubtedly a best-in-class product"

    When was this decided? Or do we only need an Apple mouth piece to declare this to be so, and thus it is so? Sent from my iPhone 4.

  • Report this Comment On September 15, 2013, at 8:24 PM, Justice007 wrote:

    By the way, it is not that I don't expect it to be "a" best in class device, but my God the thing is not even out yet. How do you know how good it is? What if it comes out for example with the finger print reader giving all kinds of trouble? Apple itself has already declared that there are condition under which the finger print reader won't work. What if that is more the case than not? After all, the finger print reader is being pumped up as one of the major upgrades to this phone.

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