Probable iPad mini unveiling helps end Apple stock skid

After falling for weeks, Apple Inc.’s stock got a much-needed boost Tuesday on news that the company will announce a new product, probably the iPad mini, next week. That seemed to placate Wall Street — at least for now.

But lingering worries about supply problems and labor unrest at factories in China were not completely erased. Apple shares still have a long way to go before they can fully make up for the 10% drop since the launch of the iPhone 5 on Sept. 21.

Although the company didn’t say what it would announce in San Jose on Tuesday, it’s widely expected to be the iPad mini, a smaller version of its popular iPad tablet computer.

Rumors have swirled for months that Apple was designing a competitor to Amazon.com Inc.’s Kindle Fire and the Google Nexus 7, smaller and cheaper devices that appeal to on-the-go consumers who don’t want to shell out for the pricey iPad.

Despite resistance from late Apple co-founder Steve Jobs, who reportedly said consumers would have to “sand down their fingers� to properly use a smaller tablet, Apple now appears poised to enter the market.

It’s good timing for the tech giant. In the weeks since the launch of the iPhone 5, the company’s stock entered so-called correction territory, slipping to $628.10 on Thursday from an all-time intraday high of $705.07 on Sept. 21. Apple’s market value has fallen about $52 billion to $609 billion.

On Tuesday, the company’s shares rose $15.03, or 2.4%, to close at $649.79.

Analysts have blamed the recent plunge on supply constraint concerns, especially for Apple’s in-cell touch-screen technology, as well as reports of labor unrest and employee disputes at Foxconn Technology Group factories in China that produce Apple products. Overwhelming demand for the iPhone 5, coupled with strict manufacturing standards for factory workers, has also hurt supply levels in retail stores.

Some investors are also miffed by reports of buyers finding scuff marks on their iPhone 5s and by Apple’s widely panned Maps app, which replaced Google Inc.’s popular version on devices running iOS 6, including the iPhone 5.

“With the stock at $700, it wasn’t priced for anything other than perfect execution, and some of these items work against that,� said Alex Gauna, managing director of technology research at JMP Securities. “Some of the concerns are valid.�

The sharp drop in the share price is not that unusual: Apple’s stock typically sees a decline after big product releases, said Peter Misek, a Jefferies & Co. analyst.

“Sixty days after the launches for both the iPhone 4 and the iPhone 4S, Apple’s stock price fell 8%,� he said in a note to investors. “But 90 days after the launch of the iPhone 4 and 4S, Apple’s stock price recovered 17% and 9%, respectively.

“Also, the press coverage regarding the bumpy transition to the Apple Maps app and the scratches on the case similarly follows the iPhone 4 antenna-gate and the iPhone 4S battery and Siri issues. Despite these concerns, the 4 and 4S were huge successes, and we expect the same for the 5.�

Barclays analyst Ben A. Reitzes said Apple’s shares are “most correlated to iPhone data points� and said although investors appear to be worried about iPad mini production and overall demand for the iPhone 5 right now, he remained confident that the expansion of the iPad and the rollout of the iPhone in more international markets would “help ease concerns.�

The launch of the iPad mini isn’t expected to be as big a spectacle as the latest iPhone, which is Apple’s flagship device. But any major addition to the Apple family of products is always a carefully watched affair.

Apple will hold its invitation-only event at 10 a.m. Tuesday at the California Theatre in San Jose, a departure from its pattern of throwing splashy product announcements in San Francisco or at its headquarters in Cupertino, Calif.

“We’ve got a little more to show you,� said the emailed invitation, featuring the top half of an Apple logo set against a colorful paint-splattered background.

The device is probably a 7.85-inch tablet that will start at $249, according to reports. The iPad mini is also expected to feature an aluminum back cover, two speakers and Apple’s new Lightning dock connector. If Apple sticks to its usual timeline, it would begin accepting pre-orders right away, with the product hitting store shelves in early November.

In addition to the iPad mini, Apple is also expected to unveil a 13-inch retina MacBook Pro, a new version of its tiny Mac mini computer and an updated iMac.

Device makers are gearing up for the upcoming holiday season with new or updated devices. On Tuesday, Microsoft Corp. announced the pricing for its 10.6-inch Surface tablet. The device, which launches Oct. 26, will cost $499 for a 32-gigabyte model.

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