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Whatever the stock market is doing to Apple Inc. these days, it doesn't seem to be passing judgement on the stock's valuation.

Even at Apple's record highs in September, the shares traded at just 16-times trailing 12 month earnings, which is reasonable for a company that continues to grow its earnings at an impressive clip and whose product launches remain a popular spectator sport.

However, with the shares down 24 per cent over the past couple of months – including Wednesday's head-scratching 6.4 per cent decline – the market appears to be shifting its view. Apple's iPads and iPhones were seen as having a healthy lead over the competition and there was a built-in assumption that the company would conntinue to develop ground-breaking gadgets to maintain that lead.

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Now, that assumption is being challenged. It launched its iPhone 5 in mid-September, just days before the share price touched a record high of $705. Coincidence? Reviews were great, and by all accounts the smartphones are flying off store shevels – but many observers pointed out that the improvements in the device over the previous version were slight.

As well, the mapping application in the new smartphone – developed in-house to replace Google Maps – was panned because of widespread errors. The executive in charge was dismissed, adding to the overall impression that Apple was a company not unlike many others: Prone to mistakes and technological stagnation.

Even Thursday's hint from Apple's chief executive Tim Cook that the company is moving ahead with the development of its own television failed to get anyone excited.

"When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years," Mr. Cook said in an interview with NBC. "It's an area of intense interest. I can't say more than that."

As CNET commented, "Many have long believed that the television would mark the next business that Apple could enter and revolutionize, just as it has done in the smartphone and tablet arenas."

The market's reaction? Apple shares were up 1.5 per cent in mid-morning trading on Thursday (and up from an earlier dip), but the gain looks more like a shrug than a cheer.

Meanwhile, it's impossible to talk about Apple's misfortunes without pointing to renewed interest in its competitors in the smartphone market. Research In Motion Ltd. has risen about 90 per cent over the past two months, moving in a radically different direction to Apple, as investors react to buzz about its upcoming BlackBerry 10 platform. (As an aside, Apple shed $35-billion in market value on Wednesday alone, which is enough to buy RIM five-times over.)

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Even Nokia, arguably struggling more than RIM, has seen its share price rise about 50 per cent over the past two months in New York.

For sure, the recent selloff has left Apple shares looking awfully cheap, with the price-to-earnings ratio now down to about 12. But as any long-suffering RIM investor will tell you, tech stocks are prone to sentiment shifts that can render some valuations almost meaningless.

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