Tell me if this makes sense. Your hottest product sells tens of millions of copies. Your profit margins this quarter alone is over $10 billion. But yet your stock market points fell over six percent in one day.
That’s what happened to Apple yesterday. Despite selling over 47 million iPhones in the last quarter alone, and despite 35% increase in sales from last year, Apple stock prices fell six percent yesterday. To Apple stockholders, it’s not the past they’re concerned about. It’s the future. There’s uncertainty for the next quarter, and analysts aren’t too excited about the iWatch. Those two things are what brought stocks down. The iPhone has been critical in Apple’s success. But investors are depending on the iWatch to carry that success to the next level. Apple CEO Tim Cook knows it. Cook said sales didn’t exceed their expectations, while sales did increase somewhat from April to May and from May to June. Cook didn’t give too many numbers or details because he doesn’t want smartwatch competitors to see this and take advantage. Apple did get a boost from China. Despite their recent economic turmoil, China is responsible for 25% of the company’s revenue. Their sales have doubled from more than a year ago. Keep in mind Apple is releasing new services as well, like Apple Pay and streaming music services.
I need to get a few elephants out of the room. Competitors have been pretty aggressive with their smartwatches. But Apple tries to keep hush about their iPhone numbers. Could smartwatch competition be a factor? Look at China’s struggling economy. Just a couple of weeks ago, their stock market lost 30% of their entire value. And this is the nation that attributes a quarter of their sales. Could the turbulent world economy be a factor? Plus, Apple has several new projects, like iWatch, Apple Pay and streaming services. Is Apple doing too much too fast? Is that another reason why stocks fell?