Apple's Big Selloff Misses the Point -- Here's Who Really Loses

Each week, I report the results of the Big Idea Portfolio, a collection of five tech stocks that I believe will crush the market over a three-year period. I've done it before; my last tussle with Mr. Market ended with my beating the index's average return by 13.35%.

Real money was on the line then as it is now, which means any one of the five stocks you see below could cause me a lot of public embarrassment. This time, Apple's (AAPL -0.70%) 9% weekly drop cost me the most.

Why the selloff? One theory says investors are fleeing Apple to capture special dividends elsewhere.

Several companies have either accelerated existing distributions or announced one-time payments ahead of the pending "fiscal cliff" that could see dividend tax rates more than double. Apple hasn't announced plans for a special dividend, and with a long history of defying critics and conventional wisdom, it seems unlikely to do so.

Others may be selling over fear of the long-term impact of the T-Mobile deal, which doesn't include a subsidy. Users will instead pay the retail cost for Apple's iPhone -- either upfront or over time -- and sign up for a no-contract monthly plan when the device comes to T-Mobile's network next year. Forcing customers to pay up like this could stifle demand and crimp profits, bears fear.

Thing is, they might have it backwards. So long as T-Mobile offers a credit card-like option to pay your hardware bill over time, demand should remain exactly as it has. Or it could increase. Eliminating network contracts in favor of giving users unfettered choice over their hardware and service should naturally favor the most highly rated handsets. Apple's iPhone consistently scores well in this area.

So who loses? Competing carriers. Users freed from multiyear contract commitments are more likely to make decisions based on cost and network performance, putting even more pressure on the likes of AT&T (T 0.65%) and Verizon (VZ 0.09%) to upgrade their data infrastructures.

What's the Big Idea this week?
Predictably, Apple's backslide ended my two-week winning streak against Mr. Market. As a group, my five stocks forfeited 274 basis points. Most tech stocks suffered a similar fate this week.

Three of the four major indices ended lower, led by the Nasdaq's 0.69% decline. Blue chips kept steady as the Dow edged up 0.37% while the small-cap Russell 2000 fell 0.02% and the S&P 500 declined 0.16%, according to data supplied by The Wall Street Journal. Here's a closer look at where I stood through Friday's close:

Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.

Notable newsmakers
Of the other stocks in my portfolio, Google continued its assault on Amazon.com (AMZN -1.29%) by acquiring BufferBox, a Canadian network of parcel delivery hubs. Reminiscent of Amazon's Locker, BufferBox gives users a convenient and secure offsite delivery box for packages -- particularly handy if you tend to order goods online. Can we expect the search king to keep muscling in on the e-commerce business? It sure seems so.

In online entertainment, Pandora Media (P) fell 15% at one point after reporting disappointing guidance. Color me unsurprised. As interesting as this music-discovery service surely is, Pandora doesn't broadcast original content in the same way that Sirius XM Radio (SIRI -1.93%) does. A real problem, I think, when so much wonderfully unique programming is being delivered via podcast.

Finally, at the LeWeb conference in Paris, Facebook (META 2.01%) announced plans to decouple its Messenger program from accounts so that any user with a phone number can download and use it.

For now, access is limited to users in a select number of countries, including Australia, India, and South Africa. Over time, the social network is hoping that users who try the service -- which it considers to be an improvement over text messaging -- will take the additional step of signing up for Facebook.