Is Hardware Apple’s Weak Link?

With its stock seemingly stuck around the $450 mark, Apple (NASDAQ:AAPL) has received a price target reduction from analysts at Needham & Co. While the research firm reiterated its Buy rating on the iPhone maker’s stock in a note to clients on Monday, it cut its target from $750 to $710. Most of the decline came from falling Mac sales, the firm said.

According to Needham analyst Charlie Wolf, Apple’s performance in the second half of last year included “cross currents that both increased and decreased the value of the components” in the firm’s valuation model for the company. While the value from its growing cash holdings as well as iTunes, software, and services went up, the value from the iPad, the iPhone, and Mac computers declined.

The increase in Apple’s cash holdings — to $137 billion at the end of December — added $18.70 to make up 15.1 percent of the company’s valuation. Software and services, which included iTunes and the App Store, contributed $83.48, or 11.7 percent.

On the other end of the scale, the value of the iPad fell $11.83, or 10.8 percent, to $98.11 largely because of the launch of the iPad mini. The value of the iPhone fell $14.56, or 4.5 percent, to $308.64 because of the firm’s assumption that the device’s worldwide share would stabilize at 20 percent…