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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Lord Empey: Northern Ireland likely to be without government for a year

The former UUP leader says Gerry Adams is now in "complete control" of Sinn Fein and no longer wants to be "trapped" by the Good Friday Agreement

The death of Martin McGuinness has made a devolution settlement in Northern Ireland even more unlikely and has left Gerry Adams in "complete control" of Sinn Fein, the former Ulster Unionist leader Reg Empey has said.

In a wide-ranging interview with the New Statesman on the day of McGuinness’ death, the UUP peer claimed his absence would leave a vacuum that would allow Adams, the Sinn Fein president, to consolidate his hold over the party and dictate the trajectory of the crucial negotiations to come. Sinn Fein have since pulled out of power-sharing talks, leaving Northern Ireland facing the prospect of direct rule from Westminster or a third election in the space of a year. 

Empey, who led the UUP between and 2005 and 2010 and was briefly acting first minister in 2001, went on to suggest that, “as things stand”, Northern Ireland is unlikely to see a return to fully devolved government before the inquiry into the Renewable Heat Incentive scheme is complete -  a process which could take up to a year to complete.

“Adams is now in complete control of Sinn Fein,” he said, adding that it remained unclear whether McGuinness’ successor Michelle O’Neill would be “allowed to plough an independent furrow”. “He has no equal within the organisation. He is in total command of Sinn Fein, and that is the way it is. I think he’s even more powerful today than he was before Martin died – by virtue of there just being nobody there.”

Asked what impact the passing of McGuinness, the former deputy first minister and leader of Sinn Fein in the north, would have on the chances of a devolution settlement, Empey, a member of the UUP’s Good Friday Agreement negotiating delegation, said: “I don’t think it’ll be positive – because, for all his faults, Martin was committed to making the institutions work. I don’t think Gerry Adams is as committed.

Empey added that he believed Adams did not want to work within the constitutional framework of the Good Friday Agreement. In a rebuke to nationalist claims that neither Northern Ireland secretary James Brokenshire nor Theresa May can act as honest or neutral brokers in power-sharing negotiations given their reliance on the DUP’s eight MPs, he said: “They’re not neutral. And they’re not supposed to be neutral.

“I don’t expect a prime minister or a secretary of state to be neutral. Brokenshire isn’t sitting wearing a hat with ostrich feathers – he’s not a governor, he’s a party politician who believes in the union. The language Sinn Fein uses makes it sound like they’re running a UN mandate... Gerry can go and shout at the British government all he likes. He doesn’t want to be trapped in the constitutional framework of the Belfast Agreement. He wants to move the debate outside those parameters, and he sees Brexit as a chance to mobilise opinion in the republic, and to be seen standing up for Irish interests.”

Empey went on to suggest that Adams, who he suggested exerted a “disruptive” influence on power-sharing talks, “might very well say” Sinn Fein were “’[taking a hard line] for Martin’s memory’” and added that he had been “hypocritical” in his approach.

“He’ll use all of that,” he said. “Republicans have always used people’s deaths to move the cause forward. The hunger strikers are the obvious example. They were effectively sacrificed to build up the base and energise people. But he still has to come to terms with the rest of us.”

Empey’s frank assessment of Sinn Fein’s likely approach to negotiations will cast yet more doubt on the prospect that devolved government might be salvaged before Monday’s deadline. Though he admitted Adams had demanded nothing unionists “should die in a ditch for”, he suggested neither party was likely to cede ground. “If Sinn Fein were to back down they would get hammered,” he said. “If Foster backs down the DUP would get hammered. So I think we’ve got ourselves a catch 22: they’ve both painted themselves into their respective corners.”

In addition, Empey accused DUP leader Arlene Foster of squandering the “dream scenario” unionist parties won at last year’s assembly election with a “disastrous” campaign, but added he did not believe she would resign despite repeated Sinn Fein demands for her to do so.

 “It’s very difficult to see how she’s turned that from being at the top of Mount Everest to being under five miles of water – because that’s where she is,” he said. “She no longer controls the institutions. Martin McGuinness effectively wrote her resignation letter for her. And it’s very difficult to see a way forward. The idea that she could stand down as first minister candidate and stay on as party leader is one option. But she could’ve done that for a few weeks before Christmas and we wouldn’t be here! She’s basically taken unionism from the top to the bottom – in less than a year”.

Though Foster has expressed regret over the tone of the DUP’s much-criticised election campaign and has been widely praised for her decision to attend Martin McGuinness’ funeral yesterday, she remains unlikely to step down, despite coded invitations for her to do so from several members of her own party.

The historically poor result for unionism she oversaw has led to calls from leading loyalists for the DUP and UUP – who lost 10 and eight seats respectively – to pursue a merger or electoral alliance, which Empey dismissed outright.

“The idea that you can weld all unionists together into a solid mass under a single leadership – I would struggle to see how that would actually work in practice. Can you cooperate at a certain level? I don’t doubt that that’s possible, especially with seats here. Trying to amalgamate everybody? I remain to be convinced that that should be the case.”

Accusing the DUP of having “led unionism into a valley”, and of “lashing out”, he added: “They’ll never absorb all of our votes. They can try as hard as they like, but they’d end up with fewer than they have now.”

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.