Inside Apple's Wild Week

Whew! What a week it's been for Apple (AAPL 3.40%) investors, myself included. The Mac maker has been having some mean swings, and it seemed like shares moved over $20, or 3% to 4%, on a daily basis. Well, it did on two of the past five trading days.

Source: Nasdaq.

Apple lost $28 billion in market cap for the week. That's more than most mid-cap companies. Let's look at what was moving Apple during its past week of weakness.

The iPad Mini was officially launched last Friday. While there were the usual lines of buyers, there weren't as many people lined up to buy the device as Apple enjoys during its other high-profile launches like the iPhone or full-sized iPad. Having bigger lines certainly beats having smaller lines, but smaller lines sure beat no lines at all.

On Monday, Apple customarily touted some sales figures for the launch, boasting 3 million iPads sold over three days. However, that included the new fourth-generation iPad that launched on the same day, and it's opting to play its iPad Mini unit sales close to the chest. Investors may have been looking for more, but there are a few reasons it's reasonable these launch figures were lower. The iPad Mini is facing some initial supply constraints, and cellular-equipped models of the tablets don't go on sale until later this month, so this weekend was a Wi-Fi-only affair.

Over the weekend, teardowns also began, and on Monday, iSuppli estimated that the entry-level model costs Apple only $188 to manufacture. That's important, because it shows that Apple shouldn't be worried that the device will cannibalize sales of the full-sized model. That's been a fear lately, since some think that the iPad Mini is priced too far above Amazon.com's (AMZN +1.04%) Kindle Fire HD or Google's (GOOG +1.50%) Nexus 7 to be competitive.

Those devices sell at cost, though -- something Apple would never do -- and Apple has never competed solely on price, so it's not reasonable to think Apple would have matched the Kindle Fire HD or Nexus 7 on price. Instead, Apple has always focused on delivering value in the overall package of build quality, software differentiation, and content.

Market researcher IDC also released its third-quarter estimates on the tablet market, and they hinted that Apple was losing its grip on the tablet market. The company's share slipped to "just" 50.4%, with the Kindle Fire HD and Nexus 7 playing a role, as those devices were launched during the quarter. The rumor mill tipped off consumers that Apple was launching new iPads during the following quarter, which probably contributed to a downtick in iPad unit sales.

There was speculation that Apple may be interested in ditching Intel (MSFT 2.23%) for its Mac processors. Investors have heard this one before, and this renewed round of speculation brought nothing new to the table. Either way, any possible switch would take many years to pan out, so Intel has little to worry about in the near term.

Microsoft (MSFT 2.23%), meanwhile, is allegedly developing an Xbox Surface 7-inch tablet to leverage its strong position in console gaming. With Amazon, Google, and Apple all focusing on the small-sized tablet market, a competitive response from Microsoft is entirely expected, especially as it just recently launched its full-sized Surface tablet two weeks ago.

Overseas, Reuters reported on Wednesday that Foxconn Chairman Terry Gou said his company was having trouble manufacturing sufficient iPhone 5 quantities to meet demand, further reinforcing pessimism that Apple may be supply constrained.

On Thursday, Strategy Analytics said Samsung's Galaxy S3 overtook the iPhone 4S in the third quarter to earn the title of the world's best-selling smartphone. The iPhone 5 was launched at the very end of the quarter, so many iPhone buyers were waiting for the new model throughout most of the quarter.

Apple has reached incredibly low valuations and now sits at six-month lows. Perhaps this past week has seen the relative bottom to the pullback and shares can resume their upward march, as we're in the midst of an all-time record quarter as we speak. There's little doubt that the holiday quarter will see record revenues. It's time to buy.