The share drop came in the wake of Apple’s December results were announced. The company sold 47.8m iPhones in the three months to December, a year-on-year increase of 78 percent; revenues were up 18 percent to $54.4bn. However, the results fell significantly short of analysts’ expectations.
Investors have expressed disappointment, in spite of reported net profits of $13.1bn and earnings per share exceeding Wall Street expectations and yielding $13.81 per share. Observers have suggested that Apple is losing its appeal with young consumers or even its ‘cool’ factor.
“For Apple, of possibly more concern is the general perception that its overall brand is suffering,” says David Glance, director of the Centre for Software Practice at the University of Western Australia. “Samsung in particular has done a brilliant job of portraying Apple phones as the type of phone your parents would own. This has seemingly already turned the teen market against Apple, who no longer see the iPhone as being “cool”
Tim Cook, Apple’s chief executive has said Apple is in a prolific period of innovation. “We are very confident in our product pipeline.
“We obviously could have sold more than this because we couldn’t build enough iPad minis to come into demand balance.”
Analysts had expected revenues of $55bn, but supply constraints affected all of Apple’s flagship products during the festive season. Cook has said he expects revenues for the current quarter to go up 10 percent from this time last year, to between $41bn and $43bn, once again falling short of analysts’ forecasts.
In the wake of the announcement, shares in the computer giant took a 10 percent tumble in after-hours trading, wiping out around $50bn in market value. Shares peaked in September at $702, but reached lows of $461.31 Wednesday night.
