Apple, the global smartphone supergiant has had to revise its projected income for the final quarter of 2018 and this hasn’t gone unnoticed by the global market. As the unit price for Apple phones is the highest globally, any shift in income is seen as a wider market issue.
Problems facing Apple
The global giant has been facing a number of problems in recent months, primarily caused by the US-China stalemate which has hampered one of its leading markets. These issues have resulted in a decline of Apple stock prices from just over one trillion in early October to 674.75 billion in the past week and a decline of almost 40% as reported in the Irish Examiner.
Sales estimates of between 89 and 93 billion had to be revised down to around 84 billion announced chief executive Tim Cook, this was the first time revenue outlook had been cut in almost two decades reported the Irish Independent.
Along with increasing unit prices to offset a decline in overall sales, Apple has also decided to begin quarterly assessments rather than monthly, something which also did not sit well with the market. Thus highlighting further difficulties within the company.
As the trade war continues between the US and China customers across the globe have been voicing their opinion on what seems to be the fall of the smartphone giant.
The Telegraph looked at the opinions of a number of smartphone users ‘Everything about Apple products is cynically designed to extract as much money as possible from anyone who buys one’
Readers noted that the company is missing what they called the Steve Jobs factor and upgrades which simply do not warrant their high prices. Competition from companies such as Huawei has also had a huge impact on sales.
US-China trade war
Due to Apple having such a high unit price those working in the retail and technology sector take heed of changes which may be occurring in the market and so to have Apple executives. This can be seen in a large number of companies in the US.
Other companies facing difficulties due to the Chinese market include companies such as General Motors, Caterpillar and Daimler noted the Irish Examiner. All US companies, but as we well know, slowing down in the US and China can have wider implications across the globe.
Each of these companies has blamed the slowing Chinese economy and the US-China trade war which began towards the end of 2018. The dispute emerged over tariffs to be placed on goods being traded between both countries.
The worst hit companies are those based on the technology and heavy industry sector. Economic advisors from the white house such as Kevin Hassett and investment firm Goldman Sach’s have warned that things will only get worse before they get better for a large number of companies. There seems to be minimal movement in any trade deal between the two economic powerhouses.
What this could mean in the long term for Apple though is losing more ground in the Chinese market which will have implications globally as they refocus marketing and technology campaigns to other areas. A return of the trillion dollar mark is very unlikely in the near future.
Will this have an impact on the UK and Irish markets at this point is too early to say. Customers are holding onto their devices for longer, as upgrade issues and poor battery quality has affected customer trust in the ability of the company to continually develop new reasons to purchase.
This week’s Apple stock prices were almost $200 billion lower than the same time last year. As a leading customer orientated business regular customers will be able to notice prices and shifts here faster than in the heavy industry sector. It’s something that people should not be concerned about just yet.
If anything it may lead to a reduction in sales and/or an impetus for Apple to start upgrading and rolling out new systems that could help its market share.
Apple may begin looking back towards the west as a secure customer base. The volatile Asian situation has got to be a hard learning curve for the powerful company.
If anything this week has shown that the bubble may have burst for Apple. At the moment these changes and broadcasts, while alarming are something which has been written on the walls as seen from reports in telegraph and examiner. Customers will eventually become tiresome of again and unchanging products and consumer items.
Will Apple make a return in the Chinese market is yet to see, but recent events would tend to not look likely.