Apple stocks are beginning to be reconsidered in the stock market. Sales are projected to decelerate and there is no sign of a new device waiting to be revealed. Investors are awaiting the downward shift of Apple. Signs of investor weariness are shown in their renaming Apple stock from growth stock to value stock. This label is used for companies that are predictable or reliable. It is not possible for Apple to maintain the growth it has boasted of. This new label could be a disadvantage for Apple. Angelino Zino (senior analyst) states "investors don't like to see the words tech and value combined because when growth slows at a tech company, it usually means that something essentially is not working." Investors are turning to companies such as Amazon, Facebook, and Netflix for growth. The contrast is seen in projected growth: the companies listed above were expected to show 23-40% annual revenue gains for the last 3 months of 2015, when Apple was only expected to show 3%. (Bloomberg data)
Reasons for the slowdown in growth include factors such as China's slowing economy. Hopefully Apple will find a new direction to take the company to ensure sustained growth in the coming years.
New York Times, Katie Benner, 1/25/16
Tech companies have periods where growth slows, but with a rumored new iPhone without a headphone jack will surely rally the stock. Also with numerous other products on the way such as a 2nd generation iWatch will also improve Apple stock. The slow growth in China is worrying because most of Apple's manufacturing comes from China so with new products in production, Apple will surely hope for a rally in the Chinese market to help aid in their successful launches of new products.
ReplyDeleteApple tried to introduce the Ipad Pro with the combination of the Apple Pencil and Smart Keyboard, just like Microsoft. Although, according to Jan Dawson (chief analyst and founder of tech research firm JACKDAW) he doubts the product sales will ever reach the past levels, due to longer upgrade cycles. But since Apple has become serious about its enterprise, you ever know what new turn this company could take.
ReplyDeleteCurrently, it would appear that a lot of tech companies are falling under the same questions many consumers ask themselves and that is what else do I want or need my smartphone to do. It would seem that overall in these products' life cycles they have hit the plateau where just about all of them are the same and no company truly knows what that "next best thing" truly is. Apple being the leader of many of these innovations continues to make minimal changes to their products like as is stated above the new iPhone without a headphone jack. While this is something that has not been done before, I would not deem this revolutionary. I think most of these tech companies are trying drastically to find what consumers want in their future products and the ways in which to deliver on those. Therefore, I see this phase as more transitional for Apple and others and not something to be worried about for future products and business.
ReplyDeleteApple has somewhat dug themselves into a hole. Like you mentioned, none of their recent products have been very innovative. The strategy of rehashing a new iPhone every year is starting to slow, as consumers are growing tired of it. However, Apple is known for their innovation, and I predict that they will continue this trend. Therefore, I would not worry about Apple's long-term prospects.
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