After a monster drop, Apple's stock has been locked in a $400-$450 range since the end of January.
And it's probably going to stay locked in this range until Apple reveals some new hardware, says Oppenheimer analyst Ittai Kidron.
There's two reasons Apple needs new hardware: To prove it can still create killer new product categories post-Steve Jobs and because that's how it makes its money.
Apple can try to portray itself as a services, software, and hardware company all it wants. To investors, it's just a hardware company, since that's how it makes its money.
Right now, its hardware business is slowing down. The iPhone, its primary driver of sales, has peaked and is now settling into single digit growth. The iPad is growing, but it doesn't make enough money to offset the iPhone's slow down.
Therefore, Apple needs to create, and dominate a new category of products.
All the gossip lately has been on an "iWatch," which would be a internet-connected device for the wrist that would work with an iPhone.
Lots of tech companies have tried and failed to create smartwatches. If Apple could actually create the defining smartwatch, it would prove that Apple has the executives in place to continue the company's legacy of innovation.
Kidron is skeptical that an iWatch would really move the needle. He's looking for an Apple TV.
We think a successful iWatch would be enough to show that Apple still has what it takes to lead the tech industry.
But, Kidron's skepticism is a good reminder that whenever Apple releases its next big product it will be met with resistance initially.
For what it's worth, Apple said it has new products in the works, but we probably won't see them until the end of this year and throughout next year.
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