What’s eating Apple?

Apple’s new store in Silicon Valley may have cathedral ceilings and marble walls, but part of the business is rotting. On Nov. 7, the company’s stock price slid almost four per cent—now down more than 20 per cent from its peak of more than $700 a share in September. Yet some investors are sticking up for Apple, calling the stock a buy despite the troubles facing the world’s most valuable tech company.

At the end of October, Apple launched the iPad Mini to lacklustre reviews, and shortly after forced out its long-time chief of mobile software, Scott Forstall, after he refused to sign a public apology acknowledging troubles with the firm’s new maps service. While supply problems have plagued the newly released iPhone 5, rival Samsung’s Galaxy S III just nabbed the No. 1 spot in the smartphone market, widely considered Apple’s stronghold.

According to Bloomberg News, many analysts are sticking to their stock price targets (an average of $760), hoping Apple’s woes can be solved in the short-term. “There are real problems at Apple and then there are fake problems that aren’t long-term,” says Farhad Manjoo, a tech columnist for Slate who has covered Apple for the better part of a decade. Manjoo puts supply problems with the iPhone 5 in the latter category and says once the company figures out how to meet consumer demand, its bestselling product will boost share prices. Apple says it just launched three new products, which means manufacturing costs cut into short-term profits, and investment bank Oppenheimer & Co. chalked up share declines to an overpriced iPad Mini and recent management changes.

While Manjoo thinks Apple will “almost certainly” top its holiday earnings from last year, which set a company record of $13 billion, he says the long-term, Steve Job-less vision for the company is worthy of investor scrutiny. “What’s the next big $100-billion product going to be?” he asks. “This company has gone forward on wowing people and we don’t know if it can do that again.”