The stock has been battered by a host of concerns, most recently some decidedly mixed reviews for the iPad Mini. Previously knocked for a relatively high price, the device is also taking some heat for offering a screen resolution that is lower than both the larger iPad and - more significantly - rival tablets from Amazon and Google.
Sterne Agee analyst Shaw Wu this morning came riding to the stock's defense with a bullish take on the prospects for the Mini.
He thinks part of the issue is that Apple has become a sort of corporate piñata, with everyone lined up to take a whack.
"Like iPhone 5, iPad mini is unsurprisingly catching scrutiny but most so for its price point," he writes. "This controversy reminds us of what happened with iPod mini and iPod nano. Both predecessors were criticized as being overpriced but went on to do much better than expected. The key reason being high quality at a reasonable price and we see something similar here. While the focus has been on GOOG and AMZN, we believe PC vendors will ultimately get impacted more. They now have to deal with a $329 iPad."
He thinks the bar has been set higher for Apple than for its rivals. "For this reason, we are not surprised to see lukewarm reviews on pretty much every product refresh over the past few years," he writes. "There is always something to complain about when one is looking for something wrong. On the other hand, customer response has proven otherwise. We believe what a lot of critics miss is that AAPL's products are still by far the easiest and funnest to use with price points that most find reasonable. We believe this has been instrumental in helping driving greater than expected sales each time."
Wu contends critics who have complained that the price point is too higher are missing the larger picture. "We believe iPad mini is positioned to do better than expectations similar to what we have seen in the past with iPod mini and iPad nano, both products that were also ironically viewed as overpriced," he writes. "We view similarities where a mid-range high quality product is priced reasonably."
He also is less worried than others about cannibalization of sales of the larger iPad.
" We believe iPad mini's biggest competition is against PCs and Windows including the arguably overpriced $599 Microsoft Surface tablet with touch keyboard," he writes. "We continue to believe iPad mini is the competition's worst nightmare and will likely slow down adoption of competitor tablets. In particular, we believe this could end up being a very tough holiday season for Windows 8."
AAPL is up $5.53, or 0.9%, to $600.85.
