Apple shares were clubbed again yesterday after the company lowered revenue guidance for the upcoming quarter. The stock lost 10% yesterday—the biggest single day drop in six years. The shares are down 38% from their high last year, translating into a $450 billion loss in market value.
Apple pointed the finger at China, but there is more to the story than the weakening of Asia’s biggest economy. A saturated smartphone market, missteps in select emerging markets, and a major mistake on pricing are all parts of Apple’s problem.
We have long harbored doubts about Apple’s ability to sustain strong margins in a fiercely competitive and historically deflationary industry.
Below is some of our research from last year on Apple.
- This is Why We Don’t Recommend Apple Stock – January 31, 2018
- Are Apple Bulls Paying Attention? – August 1, 2018
- Is Apple’s Services Business All That it’s Cracked Up to Be? – August 23, 2018
- Consumers Battle Apple’s Pricey iPhones by Keeping Phones Longer – November 1, 2018
- What Apple Doesn’t Want you to See – November 6, 2018
- Did Apple Raise Prices Too Much? – November 12, 2018
- Apple’s Biggest Failure Today – December 19, 2018
Jeremy Jones, CFA
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