November 2018 is the worst month for Apple the most valuable Tech Company. In fact, the company loses its title to be the most valuable in United States. On November Apple experience the downfall of 21% with the cost of about $200 billion market value. According the analyst the Company sales are also going down against their expectations for the recently launched smartphones. Apple declared on November 1 that they will not reveal the number of iPhone units sold in the given quarter. This month Apple stock has been in a decline and the reasons behind that are many as you can see in the details.
Why Apple has been in such a slump
Reportedly on the Wednesday morning when markets open Microsoft lead the market with the highest market cap $838 billion and steal the title of the most valuable Tech Company of United States. Apple market cap was at $833 billion on Wednesday morning. This company was once the best $1 trillion publicly traded Company and the reasons for its downfall are many
5 Reasons why
1. Global smartphone market is sagging
Smartphone market is experiencing a down fall globally. Apple creates 61% of its profit from the sale of its smartphones (iPhones) and it is not on a freed for company. Sales of the recently launched iPhone models are not as good as they expected. Moreover, international data corporation collect preliminary data of quarterly mobile phone tracker worldwide and they reveal that the smartphone sellers shipped 355.2 million smartphones during the third quarter of the year 2018. This data shows 6% year over year drop.
It is expected that the mobile market will be back on its track in 2019 but it is not sure what that growth will be in future.
2. A fall in demand of the midrange iPhone (iPhone XR)
There has been observed a lower demand for the Apple smartphones in the market. It was expected that the newly launched iPhone models will hit the market will good demand. But the analyst observes a specific decline in the demand curve especially for the mid-range smartphone iPhone XR that costs $750 and many suppliers of this device drop their projections.
AAPL’s Taiwanese suppliers experience a better seasonal sale in October month but at the end of next month there was about 20-30 percent order slashes specifically for the iPhone XR and XS Max. In a November 12 note the Longbow analyst Shawn Harrison said that the market observe an increased demand for the older iPhone models. There is 20-25% order increase for the iPhone 8 and 8plus and some other old models that partially offset the market.
An analyst Chris Caso of the Raymond James said that there is an order cut of 20 percent for the iPhone XR and 5 percent order cut for the iPhone XS and XS MAX build plans. Another analyst Wamsi Mohan from The bank of America Merrill Lynch says that they receive an entreaty from their one of the biggest industrial and consumer customer for the shipments reduction of laser diodes for 3D sensing in the second quarter of this fiscal year. And these orders were originally reserved for delivery in this quarter.