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.
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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.