Apple’s Stock Continues to Fall Amidst Upcoming Product Rumors

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As anyone following financial news would be well aware of, Apple’s Market Cap has been falling lately. Back in September 2012 Apple’s stock was worth more than a stupendous $656 billion. But in a cataclysmic turn of events the company’s market value has now dropped $394.45 billion. This is the first time since January 2012 that Apple’s stock has ever dropped below $400 billion. People who bought Apple shares any time in the past one year are now losing money.

On the other hand, rumors of the future Apple devices are also growing. From gossip about major design and display changes to speculations about the likely release of a cheaper version of the otherwise high end iPhone, rumors have been flooding the tech circles for a while now. But why has Apple’s stock been gradually declining since September of last year? The answer to this question is convoluted to say the least.

On Monday, the 4th of March Apple’s stock fell by 2.42% or by $10.42 and closed at a value of $420.05 per share and as a result, Apple’s market value dropped down to an incredibly low $394.45 billion. The last time the company’s market value had plunged below $400 billion was in January 24, 2012 when its stock closed at $420.41 per share.

Apple

Image Credit: GsmArena.com

First of all, Apple’s overall earnings are on a decline. This trend is expected to continue at least for the first quarter of 2013. So naturally investors are shying away from buying stocks of a company whose earnings are on a downward spiral. So far Apple has consistently boasted a high profit margin but many cheaper alternatives to the iPhone now abound the smartphone market and pose a danger to Apple’s supremacy. To put it simply, times are changing, competition is increasing and Apple isn’t the sole high tech smartphone manufacturer anymore.

Secondly, there have been a number of rumors regarding the cutting back of iPhone 5 orders. Reportedly, the most recent iPhone hasn’t been selling as well as Apple and Wall Street expected. A third reason why Apple’s stock is falling is that it has nothing new to offer at present. The last revamp of its touch devices happened in the fall of 2012 and the next one isn’t expected until June. Even then only minor improvements are expected. Apple TV has been in the making for a surprisingly long time now and still shows no signs of getting released. Apple’s other revolutionary product, the iWatch, too doesn’t have a release date yet and in any case it’s expected to be a low end product. That would certainly not help Apple’s declining profit margins.

On the brighter side, Apple’s shares are now selling at an all time low. Despite the ups and downs, the company is otherwise financially stable and able to shell out dividends. And, of course, it also has cash reserves of $137 billion. A fortunate rumor or a new product launch could escalate Apple’s stock as fast as it has gone down.

This is a guest post brought to you by Samantha Kirk, a writer for AT&T U Verse. Samantha provides up to date content and information for AT&T.

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