Apple’s (AAPL) stock price has fallen this week in the wake of the new iPhone launch, which beat estimates to sell 13 million units in its first weekend on the market. This sounds like it should have been great news, so why did the stock price fall?
Well, there’s a few things that investors find worrysome. The first is that while this is indeed a record launch, it isn’t exactly comparing apples-to-apples. China was counted in this launch, while it was excluded from the previous. Adding such a huge market to the numbers is expected to cause them to do up, so just because the number of units sold is bigger doesn’t mean it made a bigger splash than the previous.
Another big problem is that Apple is still relying heavily on the iPhone’s success to continue generating profits. The iPad continues to be popular, but not nearly as obiquitous, while the iWatch is struggling to really gain a following. Investors are somewhat worried that a company that so relies on its image as an innovator might be relying too much on a single workhorse to generate buzz and revenue.
What might be the biggest problem, though, is the product itself. Reviews of the iPhone have been good, but the smartphone market is starting to “mature”: almost everyone who is going to get a smartphone already has one at this point. And while the iPhone 6 and 6S might have some fancy new features, the vast majority of iPhone 5 holders are not going to trade in for a new one until their current one breaks. They are quite expensive, after all. Since there are fewer new customers in the markets, Apple now must struggle to win over Android and Windows Phone users, instead of just grabbing new clients. Since Android and Windows are constantly working to improve their own products, this will always be a struggle compared to the growth of a few years go.
Only time will tell how well this goes in the long run, but Apple stock will continue to be an interesting one to watch!
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