The Struggle of Former Leaders: AAPL, NOK & BBRY

Los Angelas, CA -- (SBWIRE) -- 03/04/2013 -- Apple's (NASDAQ:AAPL) high growth phase seems to be over. And it was an unusual one, lasting through as much as eight years, which is rare to see. The stock was a leader in many stock market bull cycles, which is also not seen often. The situation we have right now is that it seems the market is anticipating further deterioration of future growth. Hence, the leadership of Apple in the future stock market cycles might be over.

The fact is that the growth decelerated significantly, which caused the stock price to drop heavily. Analyst estimates are going down, from $49.28 expected EPS 90 days ago to $44.59 for this year and from $57.95 to $50.51 for 2014. This is normal for stocks when their high growth phase comes to an end. Based on the current valuation and growth expectations, Apple is still very, very cheap, but history shows that what is cheap, might become cheaper.

The technical picture is still bearish. The stock is in a clear downtrend, and was rejected by the 50 day moving average several times on the way down, and once from the 200 day moving average. Apple is still below both key moving average lines. A decisive break to the upside on above average volume might end the downtrend.

Earlier in the history we saw similar ends of high growth phases, over and over. Some of Apple's competitors had quite aggressive breakdowns after their respective growth cycles ended and Apple was somewhat a cause for them, at least in case of Nokia (NOK) and BlackBerry (BBRY), which suffered declines in revenue and earnings after losing market share to Apple.

Nokia Corp (NYSE:NOK) is still very far from its all time highs, despite the latest surge of 100% since the July 2012 lows. Four years ago, the stock recovered somewhat after the severe bear market, but those gains soon evaporated, bringing the share price down from $15 to $3.59 at the moment of writing, and being below $2 in July 2012. The cause of the drop was growing competition and the end of the growth phase of earnings and sales the company had in time preceding the bear market.

BlackBerry (NASDAQ:BBRY) had a similar fate. The company saw its earnings and revenue decelerate, and then go negative over a short period of time, causing a severe breakdown, falling 90% in 18 months, from February 2011 to September 2012. It is now 100% up from September 2012 lows.

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