Is Apple fading or rebounding? Pick your analyst

Apple's recent stock slide has elicited different opinions from two analysts on the near-term prospects for the company.

In an investors note released yesterday, Citi analyst Glen Yeung lowered his rating on Apple stock to Neutral from Buy. Citi initiated coverage of Apple last month, issuing a Buy rating based on an expected recovery from the stock's then "near-term trough."

But with the share price now below $500, Yeung now sees the "likelihood of any near-term rally as diminished." Though he expects the stock to eventually rebound, he thinks it will hover around its current range for the foreseeable future.

To back up the downgraded rating, the analyst cited a cutback in supply chain orders by Apple. Such a cutback does show that supply has caught up with demand. But since Apple would be unlikely to cut orders if demand were great, Yeung sees this as a sign that demand is simply "good not great."

Based on supply chain checks, the analyst also finds that competition from Samsung is rising, weakening some of the appeal of the iPhone 5.

Finally, Yeung sees healthy demand for the iPad Mini, but at the expense of the iPad 4. Again based on supply chain checks, he expects iPad Mini production to rise to 12-14 million units in the March quarter. At the same time, production of the 4th-gen iPad is likely to drop to 5-7 million units. And Apple is facing competition from other tablet vendors.

"More broadly, we view tablet inn... [Read more]