Apple's stock drops. Why?

Apple has not had a good morning.

Apple has not had a good morning. Its stock has dropped 40 per cent and is now trading at a valuation which is lower than Dell.

Why is this? Well, several reasons are knocking around. Firstly, there's that Tim Cook just isn't Steve Jobs - he is not a "product visionary".  Perhaps this is why Apple's internal management is also in flux. And another problem is the products themselves. The iPhone is on its way down, and the word is there's not much that's new in the pipeline.

Here's the BBC:

While the sales of its popular iPhone and iPad have grown - they have fallen short of market expectations - and its market share has been declining.

At the same time, its biggest rival Samsung has been steadily increasing its market share, both in the smartphone and tablet PC sectors.

According to research by Gartner, in the final quarter of 2012 Samsung sold 64.5 million smartphones to Apple's 43.5 million.

However, Business Insider makes a convincing case for the defence:

  • The stock is cheap.

  • We are nearing the end of the new-product blackout that began last fall. (In relatively short order, excitement should begin to build about the iPhone 5S, the new iPad Mini, and other product refreshes, even if Apple doesn't have anything truly new up its sleeves.)

  • While Apple's management team without Steve Jobs in charge is unproven, it's not stupid. Almost all of the folks who produced and sold Apple's great products over the past five years are still on the team.

  • Apple appears to be working on a cheaper iPhone, which suggests it is finally willing to trade profit margin for growth. This is critical for the company's long-term survival, and it's something Apple should have done a couple of years ago, when it was still the industry leader. But better late than never.
  • A disastrous first quarter and second-quarter outlook should radically reduce Wall Street's expectations for Apple — thus setting the bar lower. This will make it easier for Apple to positively surprise investors in the future.
  • It is still possible that Apple is working on a revolutionary new product like a TV or smartwatch that will suddenly get people jazzed about the company again. Yes, as time goes by, this possibility seems more remote. But it's not zero. Most importantly, Apple is still well-positioned strategically, and it still makes excellent products. We are not talking about a company like Dell or HP, which are in businesses that are dying (PCs). And we're not talking about a company whose products have gone to crap. We're just talking about a company that has lost its product edge and clung too long to its super-premium pricing strategy instead of using its phenomenal profit margin and financial resources to remain both the quality leader AND the price leader. The global smartphone and tablet industries are going to continue grow rapidly over the next several years. Assuming Apple makes smart decisions on the pricing side, Apple should grow with them.
Photograph: Getty Images
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Calum Kerr on Governing the Digital Economy

With the publication of the UK Digital Strategy we’ve seen another instalment in the UK Government’s ongoing effort to emphasise its digital credentials.

As the SNP’s Digital Spokesperson, there are moves here that are clearly welcome, especially in the area of skills and a recognition of the need for large scale investment in fibre infrastructure.

But for a government that wants Britain to become the “leading country for people to use digital” it should be doing far more to lead on the field that underpins so much of a prosperous digital economy: personal data.

If you want a picture of how government should not approach personal data, just look at the Concentrix scandal.

Last year my constituency office, like countless others across the country, was inundated by cases from distressed Tax Credit claimants, who found their payments had been stopped for spurious reasons.

This scandal had its roots in the UK’s current patchwork approach to personal data. As a private contractor, Concentrix had bought data on a commercial basis and then used it to try and find undeclared partners living with claimants.

In one particularly absurd case, a woman who lived in housing provided by the Joseph Rowntree Foundation had to resort to using a foodbank during the appeals process in order to prove that she did not live with Joseph Rowntree: the Quaker philanthropist who died in 1925.

In total some 45,000 claimants were affected and 86 per cent of the resulting appeals saw the initial decision overturned.

This shows just how badly things can go wrong if the right regulatory regimes are not in place.

In part this problem is a structural one. Just as the corporate world has elevated IT to board level and is beginning to re-configure the interface between digital skills and the wider workforce, government needs to emulate practices that put technology and innovation right at the heart of the operation.

To fully leverage the benefits of tech in government and to get a world-class data regime in place, we need to establish a set of foundational values about data rights and citizenship.

Sitting on the committee of the Digital Economy Bill, I couldn’t help but notice how the elements relating to data sharing, including with private companies, were rushed through.

The lack of informed consent within the Bill will almost certainly have to be looked at again as the Government moves towards implementing the EU’s General Data Protection Regulation.

This is an example of why we need democratic oversight and an open conversation, starting from first principles, about how a citizen’s data can be accessed.

Personally, I’d like Scotland and the UK to follow the example of the Republic of Estonia, by placing transparency and the rights of the citizen at the heart of the matter, so that anyone can access the data the government holds on them with ease.

This contrasts with the mentality exposed by the Concentrix scandal: all too often people who come into contact with the state are treated as service users or customers, rather than as citizens.

This paternalistic approach needs to change.  As we begin to move towards the transformative implementation of the internet of things and 5G, trust will be paramount.

Once we have that foundation, we can start to grapple with some of the most pressing and fascinating questions that the information age presents.

We’ll need that trust if we want smart cities that make urban living sustainable using big data, if the potential of AI is to be truly tapped into and if the benefits of digital healthcare are really going to be maximised.

Clearly getting accepted ethical codes of practice in place is of immense significance, but there’s a whole lot more that government could be doing to be proactive in this space.

Last month Denmark appointed the world’s first Digital Ambassador and I think there is a compelling case for an independent Department of Technology working across all government departments.

This kind of levelling-up really needs to be seen as a necessity, because one thing that we can all agree on is that that we’ve only just scratched the surface when it comes to developing the link between government and the data driven digital economy. 

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an  introduction from James Johns of HPE, Labour MP, Angela Eagle’s view and Conservative MP, Matt Warman’s view

Calum Kerr is SNP Westminster Spokesperson for Digital