Despite posting quarterly profits of $9.5 billion, impressive numbers by most standards, Apple’s stock continues to lose ground amidst investor worries about the future direction of the company. Apple has experienced its first dip in profits in 10 years, not a good sign in a market obsessed with constant growth. Wall Street has responded accordingly, and Apple’s stock lost another 5% following its April 23rd earnings report.
Apple’s stock hit an all-time high of $705 per share around the fall 2012 launch of the iPhone 5. Since then, the stock has lost a staggering 40% of its previous value, settling at around $417 per share as of this writing. It’s difficult to see how this loss plays out in real life; you still can’t swing a cat without hitting a hipster on his MacBook or a teenager Instagramming on her iPhone.
There’s no doubt Apple is still selling tons of iPads, iPhones and MacBooks. The problem is that during the Steve Jobs era, Apple developed a reputation of being first to the market with latest, best, and most innovative hardware. But as of late, Apple’s supremacy as the top phone, tablet, and computer manufacturer has been a matter of debate.
Although Apple still bests many of its competitors in the performance and quality of their products, the design and feature sets of its major products have remained largely unchanged. It’s been almost two years since their last major platform release (the iPad), and analysts fear that this is a sign of stagnation and a lack of ideas. Apple continues to rest on the success of proven designs, while its competitors are busy creating new form factors like Google Glass, Microsoft Surface, and the Samsung Galaxy Note “phablet.”
That said, it’s not all doom and gloom over at One Infinity Loop. Apple still has a market cap approaching $400 billion and over $145 billion in cash reserves to fund its future ventures. They’ve also increased their Research & Development budget and have released plans for a new $3-5 billion campus. The new space, dubbed the Apple Campus 2, will house a sprawling, 2.8-million-square-foot main building that will hold up to 14,000 employees. It’s slated to open its doors in 2016, and construction on an additional, smaller building is scheduled to begin around the same time.
So there is something going on over in Cupertino, but exactly what remains a mystery to all but the most privileged insiders. It seems that Tim Cook has made good on his promise to “double down on secrecy” by plugging up the frequent information leaks that have plagued the company in the past, though the new policy may actually be doing more harm than good, given Apple’s current situation. While Apple remains mum on details, Tim Cook has been quoted as saying that there are some “amazing new products coming” from Apple in the near future.
Despite its problems on Wall Street, Apple fans are still as voracious as ever. Tickets to Apple’s World Wide Developers Conference (WWDC), held this year in San Francisco from June 10 – 14, sold out in 2 minutes flat. At $1600 per attendee, that’s a pretty impressive feat.
The WWDC is primarily an opportunity for iOS and OS X developers to get “face time” (couldn’t resist) with Apple engineers, but much of the excitement surrounds the keynote address at the end of the conference. In the past, Apple has utilized the WWDC keynote as a platform to unveil its most exciting new projects, and this year should be no exception.
No one would argue that Apple is in a “bad position” as a company. They are still one of the most ubiquitous brands on the planet, with profits that still dwarf those of other companies, and they still offer the most polished and intuitive user experiences in the industry.
Some believe that Apple is approaching a critical mass that will make it harder for the company to grow in the future. But with near limitless resources, a capable CEO, and some of the best talent in the industry, a comeback is certainly within the realm of probability.
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