Do you happen to know a lot of people who would hate to have an iPhone or iPad? Without any doubt, Apple’s products enjoy immense popularity around the globe. People are ready to spend days and nigh standing in long lines in order to be among the first guys who have bought a new product on the release day.
Even despite the fact that more people get interested in Apple’s products, the company’s stock has recently depreciated by over 20% over the last couple of months. What is happening?
APPL Goes Down
On September 19th, APPL reached the all-time high - $704 per share, HY Markets reports. Major financial institutions, banks and rating agencies started making optimistic forecasts for the prospects of Apple’s stock. The most optimistic one suggested an increase up to $1000 per share.
The major reason was the report, which revealed an unprecedented increase in the amount of preorders of iPhone 5. This device was officially presented on September 12th 2012. After that, customers made over 2 million preorders within 24 hours.
However, by now APPL has depreciated by over 20%. No wonder, if to take into account a long series of negative event, which followed the presentation of the new long-awaited device.
On October 23rd, Apple introduced another product - iPad mini - and simultaneously announced a new iPad. The thing is that iPad mini costs from $329 while similar Android-powered tablets costs around $200. No comments. On that day, Apple’s stock was down by 2.9%.
Three days later Apple published a quarterly report - the company’s income boosted by 24% or $8.2bn (y/y) in Q3 2012. Apple’s proceeds reached $36bn, which was a 27% increase (y/y).
Why did Apple’ stock depreciate on such positive readings?
It turns out that Apple managed to sell only 14 million iPads during the reporting period, though the company had planned to sell 15 million. At the same time, the sales of iPods declined by 19% down to 5.3 million devices. However, the demand for iPhones boosted by 58%. The company sold 26.9 million devices during the reporting period.
Apple’s income forecast for Q4 2012 has declined from $55,1bn or $15,49 per share down to $52bn or $11,75 per share. APPL lost another 4% of its value on the day the forecast was published.
Any Solutions To These Problems?
Obviously, all these problems hit Apple at the end of the financial year, which ended on October 31st 2012. HYMarkets reminds that APPL used to be among the frontrunners most of the time. Fund managers hoped to repeat last year’s success but the year ended amid negative news, thereby diminishing investors’ interest in Apple’s stock.
However, the key factor was the news about the resignation of several top managers, including Scott Forstall, Senior Vice President of iOS Software at Apple Inc, and John J. Browett, Senior Vice President of Retail at Apple Inc. Journalists named it the biggest changes in personnel of the decade.
Most experts, including HYMarkets, assume that this change will inevitably have a negative impact on the company.
Another negative factor is the fact that Apple has recently lost several patent battles.
Still, this is not the end of the world for Apple. HYMarkets offers to look wider at the situation.
Technically, after 4 years of continued growth, a deep retracement looks natural. Therefore, the current weakness may become a perfect opportunity to buy APPL relatively cheap.
Still, there is a chance of going down to $500 per share. Therefore, it is necessary to monitor Apple-related news. Probably, this is the area where the price will find the bottom. Therefore, it is suitable for purchases.
With HY Markets , anyone can trade Apple’s stock. HY Markets is a reliable broker licensed by the FSA. It has offices around the globe and has been in the industry for over 30 years.
