Apple Is No Longer Worth One Trillion Dollars

Apple’s shares were down 6.6% on Friday after the tech giant came up with less-than-expected sales for the holiday quarter. The drop in Apple shares reduced its market value to a figure below $1 trillion (£770bn), erasing a whopping sum – $67 billion off the total value of the company. Prior to the shares drop on Friday, Apple had on Thursday stated that it will no longer be revealing the statistics of iPhones, iPad and the Mac computer sold to the general public. Information the company had gladly provided for the past 20 years.

Earlier, in August, The Cupertino, California-based Apple co-founded by late Steve Jobs in 1976 became the first company to be valued at $1trillion. Apple placed both Amazon and Microsoft at a distance to top the list as the most valuable American company, after announcing its lucrative fiscal third-quarter earnings.

The company believes the basic reason for its share drop is the weakness in the emerging markets, citing the weak foreign exchange costs to have played a major role in the disappointing sales forecast. However, Apple shares bounced around after hours to emerge its market cap just above the $1 trillion threshold at $207.48 per share.

If Apple’s shares had continued bearish, Microsoft Corp and Amazon would have been back in strong contention as to which of the three firms is the most valuable American company.

Apple worth one trillion dollars

Tim Cook kicks off Apple’s October 2018 event.

Keeping sales statistics secret could be a sign of poor future growth – Analysts

Analysts are still criticizing heavily the decision by the Company to hence withhold unit sales data for its products. The information they had used in the calculation of the average selling price of Apple’s devices and as such determine the financial health of the Company. They, however, interpreted that decision by Apple as a clear sign to show that the expected growth in sales of iPhones by the Tech Company has reached its peaked. This prediction by analysts seems to overshadow the third quarter report of the Company. Analysts have also interpreted the peak of sales as being directly responsible for the drop in shares.

Statistics are no longer relevant – Apple insists

Responding to the wide criticism by analysts, Apple’s Finance Chief Luca Maestri stated that the unit statistics of products sold was no longer relevant now as they were in the past years. He said this is because Apple now has a wider range of products being sold at different prices. In his words, “Customers don’t just buy phones anymore; they also purchase wireless headphones or subscriptions at the same time”. As a result, he (on behalf of the Company) urged shareholders and analysts to focus on the revenues generated as well as profit margins gotten rather than sales data.

Meanwhile, Analyst Raymond James strongly disagrees with Maestri. Supporting him closely is a telecoms analyst at BTIG Research, Walter Piecyk who said the move does not look entirely good for Apple. From experience, he stated that “companies typically stop reporting metrics when the metrics are about to turn.”

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Leave a Reply

Your email address will not be published.

Recent Posts

The El Salvador Bitcoin City: Powered By a Volcano

The El Salvador Bitcoin City: Powered By a Volcano

Addressing the crowds at a promotional event for bitcoin, in the town of Mizata, Bukele assured his citizens that the Bitcoin city will have everything. “Residential areas, comme
8 hours ago
Why Do CEOs Swear? Because They’re Intelligent That’s Why

Why Do CEOs Swear? Because They’re Intelligent That’s Why

A 2015 study found that highly intelligent people are better at coming up with curse words as they have a greater vocabulary and are not afraid to use it. Timothy Jay, professor em
9 hours ago
Look Beneath The Surface For the Truth About Floating Solar Farms

Look Beneath The Surface For the Truth About Floating Solar Farms

As of 2021, India and China account for some of the biggest solar farms in the world. The two countries combined are home to six of the ten biggest floating solar farms in the worl
10 hours ago
Best Retirement Plans For Entrepreneurs While Inflation Soars

Best Retirement Plans For Entrepreneurs While Inflation Soars

As of 2021, over 150 million US workers identified themselves as self-employed. This means that they are responsible for their own retirement plans. Employees of big firms tend to
1 day ago
Fashion Designer Vera Wang – The Fairy Godmother All Brides Want

Fashion Designer Vera Wang – The Fairy Godmother All Brides Want

Just shy of her 40th birthday, Vera Wang struggled to find a bridal gown that suited her taste. Her father pointed out her struggles for what they really were – a remarkable busi
1 day ago
The Microsoft Employee Salary Hike: Peer Pressure In Tech

The Microsoft Employee Salary Hike: Peer Pressure In Tech

In the memo obtained by Geekwire, Nadella writes that he is aware of how much their talent is in demand. He appreciated their efforts in keeping the company running and thanked hi
2 days ago