Apple is currently the undisputed champion of both the smartphone and tablet arena. However, when investors buy Apple’s stock, they keep a keen eye on the potential growth. In those terms, Apple’s sales have substantially declined over recent months. Not surprisingly, this has dipped down Apple’s stock to a six-months-low of $430.
For some, it may be quite surprising since Apple is still selling iPads and iPhones by millions each quarter. However, what is critically important to investors is that how well a company can sustain its growth and then increase it over time. Whereas iPhone sales continue to be excellent, they seem to have slid down.
In fact, a number of reports have recently emerged which claim that Apple has cut down on iPhone orders, with the iPhone manufacturers such as Foxconn registering low productivity as a result. Even if the news are not fully substantiated and confirmed, they tend to bear down on the investors who get the impression that Apple is losing ground in terms of profit margins.
This fear is compounded by the fact that Apple’s mainstream iPad sales seem to have declined sharply whereas iPad mini sales are on the rise. iPad mini costs less, which means that Apple earns lesser profit by selling an iPad mini compared to a standard iPad.
As a result of these factors, such investors who banked on Apple’s ability to grow continuously at a good rate, are disappointed. So they have started dumping the stock. This is what has majorly led the decline in the value of Apple’s stock which is currently hovering around $430, down from the amazingly high of nearly $700 back in September last year.
However, let’s not deem Apple a spent chip yet. The company still has a leading position with its iPhone and iPad offerings and can muster enough momentum with its expected releases this year to appease and win back its growth investors.
Courtesy: Business Insider