Tuesday , May 30 2023

4 reasons why Apple stock is plunged – BBC News



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Apple's technology company was eye-apple Wall Street, the financial center of the United States.

It was the first American company to be quoted on the market for three trillion dollars, boasts offering products that have set trends and managed more money than the economies of some countries.

Besides having such loyal consumers who are willing to go overnight, be the first to buy Apple products.

But in recent weeks, the Californian company has lost value.

Your actions He hasn decreased by more than 20% since October, affecting the price of other companies and, in general, the stability of the market.

Their share price is less than $ 180, but recently they were at $ 230.

What happens?

Stock Exchange
Technology company shares fell by more than 20%.

1.- Investors are worried about iPhone sales

In September, the company introduced a new line of products, but it is unclear whether the moment's emotion turns into sales.

The number of products sold in the most recent quarter of 2018 has not changed much.

And the estimated profit growth of between 0 and 5% per annum during the festive period (when families usually buy the latest devices) has disappointed investors, generating a rapid sale of securities.

Recent announcements about the production cuts of some of the company's entrepreneurs have also contributed to anxiety, though these movements are difficult to interpret.

The situation has been exacerbated by the decision Apple stopped reporting how many iPads, iPads and other products were sold each quarter, believing that they might hide anything.

"Suspension of iPhone data was the straw that broke the back of the camel," says Daniel Ives, director of the research firm Wedbush Securities.

iPhone
Services: the future of growth?

2.- Apple's high prices may leave the company exposed if there are problems with the economy

In recent years, the company has countered the decline in smartphone sales with rising prices, which allowed it to record a record of its profits, despite the industry's contraction.

But it expects both the global economy and the US economy to slow down. In addition, recent consumer trends are not clear.

The cheapest device in the new line iPhone costs $ 750, and this puts the company at risk if the economy slows down. The forecast for the sale of the same company aggravated these concerns.

"The trend of the average selling price can not last forever," says Angelo Zino, an analyst at CFRA's investment research firm.

He adds, "I think the real concern for investors is how long this situation can be prolonged."

3.- Investors do not trust – always – in Apple's business affairs

The technology company has identified its services, including ApplePay, App Store and Apple Music. among others. as the next source of growth. Wait to generate $ 50 million in profit taking advantage of the large number of users it has.

But investors still have a lot of questions. For example, Apple has not revealed its intentions to venture into television and movies yet, and its goals of getting involved in the health industry are also unknown.

"Analysts will have to adapt to the characteristics of a small and regular pay-as-you-go business, instead of receiving large revenue generated by popular devices," says Carolina Milanesi, an analyst at Creative Strategies Market Research.

However, he also believes that, at present, concerns about Apple's situation are you are premature.

"If we know there will not be an increase in iPhone sales or even fall and there is nothing to compensate for this fall, of course, there are reasons to worry, but it is too early for that," Milanesi says.

"If one year," he continues, "we see that the service business does not break as we expect, then the pain may be legitimate."

Apple logo
For some, worrying about Apple's future is premature.

4.- Apple reflects concern about the trade tension between China and the US.

The technology sector has generally suffered negative effects in recent weeks as investors have abandoned a market that generated profits at the beginning of the year.

However, until Apple's latest update to its investors on November 1, market uncertainty did not affect its actions too much if both events are compared.

But now, market fears have hit Apple. And there are many: too optimistic assessments, rising interest rates, currency fluctuations and trade tensions between China and the US.

The Asian country, in particular, is a risk that worries some, because China's larger region, which includes Hong Kong and Taiwan, is source of 20% of profit of the company.

It also depends on production in the area, although for now its products are tax-free.

"It's definitely a period of tension," says Ives. He says, however, that he feels optimistic about Apple's long-term future.

"I do not think there's a big change in Apple's history over the next two, three or four years," he concludes.


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