Apple investors look for the next big thing as stock continues downward slide How much faith do investors put in a company that has delivered ground-breaking products and stellar results year after year? Not much it turns out. Apple Inc."s share price slid below $400 (U.S.) on Wednesday, continuing its sharp descent from its record high of $702.10 last year. Investors appear to be demanding new hardware from Apple in return for their loyalty to the stock. With the exception of an updated laptop, Apple hasn't put anything new, sleek and shiny in investors" hands for eight months. "The lingering risk in the Apple story is that the company can no longer innovate as it did during the Steve Jobs era," says Charlie Wolf, an analyst with Needham & Co. in New York. After briefly reigning as the world's most valuable company, Apple has watched its valuation plummet 43 per cent from the high reached last September, the month when the latest iPhone model debuted. The stock is down 25 per cent so far this year, compared with a 12 per cent gain for the broader S&P 500. The few product announcements from Apple over the last year appear to be doing less and less for the company's shares. News of the fifth generation iPhone last September, pushed the stock higher. But last October's unveiling of a newly designed iMac desktop computer and the iPad mini appeared to have no effect on the sliding share price. And this month's news of a new MacBook Air laptop, combined with a well-reviewed new mobile operating system, failed to inject any energy into the stock. Complicating matters, sales of existing iPhones - Apple's biggest product category - may be slowing. Peter Misek, an analyst with Jefferies & Co., estimates that iPhone inventory levels have risen to twice their normal levels at wireless carriers and retailers. The analyst is forecasting that Apple will make only 85 million iPhones, rather than the 110 million he had first forecast, in the second half of this year, Bloomberg reports. Mr. Misek cut his target on the stock this week to $405 from $420. And Ittai Kidron, of Oppenheimer & Co., set a new price of $460, down from $480. Apple engineers have made big improvements in the operating system that runs the iPhone and the iPad, enhancing and improving features such as maps and iTunes, once again making the platform "the gold standard" of mobile computing, Mr. Wolf says. But tweaks to software will not be enough to maintain Apple's robust rate of growth. It suffered its first annual drop in profit in a decade last quarter and the Street expects a repeat for the current quarter. Mr. Wolf, meanwhile, is forecasting that profit for the full fiscal year will slip 7.9 per cent from a year earlier, on a 10.2 per cent increase in revenue. To be sure, Apple is still growing at a double-digit rate and now offers a dividend yield of more than 3 per cent. The shares trade at 10.8 times estimated earnings for this fiscal year. That is a significant discount to the 16.8 multiple that the stock has carried on average over the last five years. Amit Daryanani, of RBC Dominion Securities Inc., groups Apple together with several technology companies that he says have been "overly impacted" by the market correction over the last few weeks. He says the stock offers an attractive opportunity to investors at current prices and should be driven higher when the product dry spell ends in the second half of the year. For instance, Apple is likely to launch an upgrade to the iPhone 5 as well as a new low-end version of the smartphone in September. Additionally, the iPad lineup should get a refresher later in the year with both a new iPad mini and 9.7-inch iPad tablet, he noted.