January 25, 2013 | Paul Merak | Comments 0

Apple share down 34 percent since September 2012

In less than 4 months Apple’s stock dipped down by 34 percent to $455.89 a share. Just yesterday Apple’s shares dipped by 11 percent.

J. P. Morgan Securities’ analyst Mark Moskowitz offered,

“There’s nothing that can help the stock from sliding now,”

Has Apple reached its proverbial boiling point? Is it too large a company to be unable to create new markets and keep growing the way it used to? Maybe. It’s not that Apple is doing badly mind you. In 2012 Apple netted $13.1 billion, same as in 2011. In fact, it sold more than in 2011. The gross sales reported for 2012 were $54.5 billion selling about 28 percent more iPhones and 48 percent more iPads than in 2011.

Apple produced remarkable new products last year including new iPad mini, new iMac, and iPhone 5. In fact the entire lineup of products have been overhauled and upgraded.

Here is where the problem lies with Apple. Apple grows fast but perhaps not fast enough. We have learned to expect nothing but the best from Apple and most of us are willing to pay the premium for well build cutting edge machines. The problem is that vast majority of people will never go for the premium top-of-the-line products.

Over half of Apple’s income comes from selling iPhones. Over 52 percent of smartphones in United States are iPhones, but in the rest of the world this isn’t so. In fact three out of four smartphones have android OS. In the emerging markets most of smartphones sold are of less than $200 value. The future belongs to OEMs that are willing to produce high specced smartphones and tablets in wide variety in form factors and price points. There are quite a few companies that have shown a drastic growth doing just that.

Samsung has grown faster and adopted more quickly. Xiaomi Technology in China grew in just 3 years to seriously compete against Windows Phone and Blackberry. In near future I think we’re going to see more diversification in tablet and smartphone market as more agressive and adoptive makers take charge.

Apple is now working on iTV sets which will no doubt dazzle us. New budget iPhones are in the pipeline as well. It is doubtful though that cheaper iPhones and TVs will deliver the kind of profits to help Apple’s share rise to September 2012 level.

Tim Cook, Apple’s CEO isn’t too concerned about this claiming that Apple’s new products pipeline is “chock-full”.

Source: NYTimes

Apple share down 34 percent since September 2012

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