The first hint for such a conclusion is sent by the chart:
Apple chart
The chart is forming a head and shoulders top at a time, where the public massively realizes the success of Apple. Despite the fact, that the company is launching new "revolutionary" products, this message is no longer convincing for the markets.
What happens to Apple? There are a lot of signs that the life cycle of Apples current "fashion trends" is come to a maturing stage. The most obviously sign is that Apple is now selling its 3rd Generation iPhone "to everyone". That means, that Apples sales are such high, that only a mass sale can support its current valuation.
In the past, Apple declined such a strategy. They know that their products demand some exclusivity as the early adopters of Apple products want to be different. Additionally, Apple may loose some of its technical advantages and quality problems emerge. As Apple was the great winner in the mobile market of the last years, every competitor is now trying to copy or improve functionalities that Apple invented. And the competitors improve while Apple is facing some quality problems with its newest iPhone.
What does that mean for investors? Despite the fact that Apple may improve its sales by its new products and its "sell to the masses" strategy, a stock of a company reaching its maturing stage may start to disappoint. The valuations will normalize as downside risks emerge. In cunjunction with the current chart pattern, investors should consider to adopt a contrarian strategy.
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