Despite successes seen in 2015, the start of 2016 has given Apple reasons to worry. For the first time since October 2014, Apple’s stock value dropped to below $100.
Apple Inc (AAPL.O) is expected to report iPhone sales over the Christmas period to increased slightly more than 1%, it’s slowest growth to date and much less than the double figures expected from investors.
Despite the sales of smartphones making up 63% of Apple’s entire revenue, iPhone sales are expected to drop in the March quarter for the first time since the iPhone launched in 2007.
Reasons for this possible decline are explored by Apple investor Daniel Ives, from FBR Capital Markets;
“Apple has become a victim of their own success as the blockbuster iPhone 6 product cycle was hard to replicate as many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7,”
To counter this slowing in sales, Apple has recognized the importance of its presence in China. Apple now makes more money in China than it does throughout Europe, and it is well on course to overtake the United States.
Almost all of Apple’s gains last year were from Chinese expansion. However, instability in the Chinese economy has rocked the global markets and if China continues to under perform, it may be hard for Apple to continue long-term growth.
Market forecasts are for Apple to have sold 76m iPhones in the quarter, just a slight increase of the 74.5m sold in the same period a year ago. Some analysts are even predicting a decline.
Sales are expected to pick up in the second half of the year, with the release of the iPhone 7.
Apple shares closed down 1.98 percent at $99.41 on Monday. They have fallen nearly 10 percent since the start of October, steeper than a 2.2 percent decline in the S&P 500 index.SPX.
26/01/2016
