Last week, Henry Blodget laid out a case for picking up Apple stock at a steep discount -- at least compared to where it was a few months ago. "If you really think that Apple's going to take over the world, this is the time to love the stock, not when it claws its way back toward $200 again." When he wrote it, Apple was a third off its highs and trading in the mid-$120's. Early this afternoon, the stock had dropped another 16% to $108 on a pair of analyst downgrades -- a more than 52-week low. Time to buy?

RBC analyst Mike Abramsky wrote this morning that purchase intentions for Macs -- Apple's most profitable products -- are "suddenly moderating" from last month and that 40% of consumers plan to spend less money on electronics in the next 90 days, "the weakest outlook ever seen."

Also this morning, Morgan Stanley's Kathryn Huberty wrote that the only area of the PC market ripe for growth is the sub-$1,000 market, where, to the uninformed observer, Apple sells no laptop. In the last quarterly earnings report, Apple reported that margins would be a little thinner during the next fiscal year. For the most part, this has been interpreted as a warning of product price cuts coming soon. Apple CFO Peter Oppenheimer hinted at it during the earnings call:

We’re delivering state-of-the-art products at price points that our competitors can’t match, which has resulted in market share gains in each of our products. We plan to continue this strategy and to deliver great value to our customers.

$1,000 is seen as a significant psychological barrier for price-conscious consumers -- and Apple has traditionally never breached that price level, except with the headless Mac Mini. If you know where to look, however, Apple does sell a sub-$1,000 notebook -- for certain customers. The entry-level MacBook -- normally $1099 -- combined with a $100 educational discount, sells for a convenient $999. Given the number of students buying Apple notebooks, that's a significant product offering that many seem to miss.

College student friends of mine are always surprised when I tell them they can get a Mac notebook for under $1,000 -- I don't see it as a huge leap that the next version of the MacBook will be priced at $999, with Apple taking a slight hit on margins, but gaining a huge number of price-conscious shoppers going into the holiday season. The company has already slashed prices on the full line of iPods, and the heavily subsidized iPhone -- depending on the state of consumer confidence in the shaky economy, Apple could see strong sales of aggressively priced products.

What's all this mean? If Apple comes out with aggressively priced products for the holiday season -- and I think it will -- product sales could be up, plus the accounting strategy of taking iPhone revenue over two years (meaning that Apple will have a steady and significant flow of earnings even if product sales drop) then the stock has a nice upside potential. It's also important to note that some analysts are seeing upside for Apple as well. Piper Jaffray's Gene Munster recently upped his estimates for the stock as well.

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