Apple feels the pressure from slowing economy

As markets slide and consumer confidence plunges, several analysts are revisiting Apple's stock. Of primary concern is the potential slowdown in the firm's flagship workhorse Macbook line.

While June quarter Mac sales showed strong growth, with notebooks up nine percent for the quarter to approximately 1.4M units, its high price is proving to be a greater hurdle for consumers in a slowing market.

"Our tracking of online sales is now indicating a dramatic shift from Macbooks to the lower-price-point netbook," said analyst Vijay Rakesh of Think Equity.

Since Acer, Asustek, MSI, and Dell introduced the sub-PC/netbook models in June-July 2008, a number of consumers have switched over to the cheaper alternative.

While Mac notebooks dominated the notebook category as a top-5 notebook seller through June, the last three weeks in August-September are showing virtually no Mac notebook as a top-5 notebook seller on Amazon heading into back to school, Rakesh notes.

Earlier this week Samuel Wilson of JMP Securities expressed similar sentiments after surveying a number of Apple retail stores, finding employees were even 40 percent more likely to recommend the less expensive MacBook, which starts at $1,099 over the MacBook Pro, which starts at $1,999.

Concerns, including slumping demand for laptops and a strengthening dollar, helped drive down Apple's shares more than 29 percent, to 126.84, on Sept. 23 from 179.32 on Aug. 14.

Although Rakesh has lowered his price target to Apple from $200 to $170 in light of the perceived slowing sales. some analysts are remaining upbeat.

"The disturbance in the macroeconomic environment is within lower-income demographics," Shaw Wu of American Technology Research said on Sept. 22. "We believe AAPL's business will remain strong in the near- to medium term. Enough high-end consumers are still buying tech."

"In two of its three big franchises, Mac and iPhone, penetration is very low and starting in the higher-income demographics," Wu said.

Shares of Apple rose $2.49, or 1.97 percent to $129.34 in afternoon trading on the Nasdaq.