Just as expected, Apple [NASDAQ:AAPL] has just released the worst result since the company launched the iPhone in 2007.
Apple’s its headline net income fell to $50.6 billion and its quarterly net income fell to $10.5 billion, For a company that declared $58 billion and net a income of $13.6 billion same quarter last year, it might sound very marginal, but investors are not looking at the 12% percentage decrease within a year.
Investor are now very worried that growth might be bidding Apple goodbye. Tim Cook tried to calm their nerves. At the earnings call which took place at 10 p.m Nigerian time, he said “our team executed extremely well in the face of strong macroeconomic headwinds. We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
Apple’s problem are not complex but very difficult to solve. Difficult because the major challenge facing Apple’s revenue growth are uncontrollable variables. The crash of Chinese economy, economic crisis in emerging markets reeling from the crash in crude oil price slump and more importantly, a stronger USD is making things more tighter than ever for Apple.
Apple still managed to sell about 50 million iPhones. Its iPhone SE, a cheaper model will be released later in May. However, Apple is selling smaller numbers of iPhone. Because iPhone is its cash cow, the company can not gloss over the fears of investors.
The company is also facing massive competition in China, a major market that gave Apple a big leap. When the going was good, Apple had signed a partnership deal with China Mobile with 800 mobile customers. The company did make a kill with iPhone sales going up the highest for the past three years. The same China has become Apple’s Achilles heels. Xiaomi, a smartphone maker has been mirroring Apple’s iPhone look and feel. The company sells its ‘Mi’ phones for less than 20% of an iPhone.
In the last few hours Apple’s shares has lost over 40 billion is value, the company’s shares might fall below Alphabet’s its major contender for the most valuable company in the world.
Featured image: Mashable
Disclaimer
The content on this site, including news, quotes, data and other information, is sourced by PageOne from official and public sources and other third party content providers for your personal information only, and is not intended for trading purposes. Content on this site is not appropriate for the purposes of making a decision to carry out a transaction or trade. Nor does it provide any form of advice (investment, tax, legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments or products.
