Apple stock price crash: A reader’s take on its reasons

November 19, 2012 | Filed under: Business | Posted by:

Apple stock price is going down and after losing around thirty percent in the last two months, Apple seems on a shaky ground right now. Here a reader has his take on why Apple’s stock price is going down.

Many people have said that the map app issue was minor, but it wasn’t. It was a major issue. Not the actual map app itself, but the very fact that Apple would even think of releasing a product that was so bad suddenly made people look at them again rather than just simply by the next iversion.

There is also the endless litigation they are doing against Samsung and others, which a lot of people see as them being the bully and also weak because they are trying to kill off competitors through the courts rather than in the market place. The fact that the iphone 5 was mediocre to say the least, further confirms this in people’s minds.

It is the same with the iPad mini. Apple made a huge thing about this NOT being a 7 inch tablet, so they could ramp up its price, but their customers or potential ones saw straight through that and as has been reported elsewhere, ipad mini sales are much lower than expected and the fact that it does not have a retina display, it is perceived as Apple just trying to cash in on the smaller tablet sector and arrogantly thinking they would clean up.

It is very clear that they have lost the plot now and simply don’t have a fall-back position. They will still sell many millions of products, but over time, their sales volumes will become lower and lower as potential customers stop seeing the need to pay premium prices for outdated technology and the only way Apple will be able to address this is to lower prices, which means margins and when that happens, their share prices will fall even more.

Apple definitely changed the face of the mobile market place and also open up the tablet sector and for that they should be applauded, however, they are no longer seen as a premium product supplier in the true sense, just an expensive one and as there are also numerous financial drawbacks in signing up to the Apple iOS experience, people are now starting to walk away from them, which is why you are seeing a fall in their market share.

Apple fans will tell you that Android are targeting the low end of the market which is why their market share is so much higher, but what they fail to see ( or admit ) is that this proves there is a market out there and once people see they dont have to pay huge amounts of money for modern technology, they will be even less inclined to purchase an Apple product.

Apple fans are also always mentioning Apple’s $121 billion in cash, however, what they fail to relaise is that this money is mainly off shore to the US and as soon as they try and bring it in, they will be hit with a 35% tax bill, not to mention tax demands from the countries where they are holding that money, so the $121 billion suddenly becomes a lot less.

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Posted by on November 19, 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
  • Jayce

    This is no surprise. Steve Jobs saw this coming and prepared a good fight for Apple, but he didn’t consider Tim to take it this direction. Sometime down the road Apple will become only a licensor to its patents and hopefully not become like Kodak, and Iphones will be remembered like the Atari.

  • Pete Morrison

    I totally agree with this assessment. There has been a huge amount of hype with Apple, mainly from the media who for whatever reason, seem to think Apple can walk on water, the the reality is that it can’t. At $705 a share, it was seriously over priced and over valued. They grew when there were no alternatives to their products, but now there are. Lots of them and the competition’s products are better. The iphone 5 could have been another market killer, but it is simply not good enough for that. There are low range Android phones that are as good as the iphone 5, but cost significantly lower and as the author says, people now see that they don’t have to pay inflated prices for smart phone technology today and the fact that Android now currently has 75% of the market share, it shows that the marketplace does not see Apple as a desirable platform anymore. I also think they will have to lower prices to continue to attract high numbers of customers and for those Apple lovers who think China will save the day, think again. The one thing the Chinese hate more than anything else is paying subsidies and according to a few articles I have read, the deal with the Chinese mobile providers is far from a done deal and even if it does happen, it is going to be in 2013, so expect to see a fall in sales and revenue over the next few quarters.