The share price of the world’s most expensive company drops massively (20% since October), but why?
The Tech industry, like many other industries, is contracting. With economies around the world expecting to slow, Apples strategy of raising prices on products to account for slowing sales may soon be obsolete. As disposable incomes dry up, this strategy will slowly become unprofitable, leading to a completely new pricing strategy.
From changes across the political spectrum (from trade wars with China to changing laws with Brexit), the landscape for the US business looks troublesome. The greater China region is a source of 20% of Apples trade, so this could be a major problem moving forward.
Apples future focus will be on developing the services side of the business, in contrast to what it has previously been famous for. Apple pay, Apple Music and the app store are cited to be the biggest future drivers of the business, but with investors lacking faith, they still have a lot to prove.
The Apple iPhone launch is a massive event in the Tech world, since Steve Jobs launched the first iPhone. Apple owes its success to the buzz developed around its iPhone, but like any product it will age and excitement generated around it will begin to falter at some point (maybe number 18 is too much?). With the reasons mentioned above, the buzz has not been sufficient this time to kick early adopters into taking the plunge and forking out.
What could the tech giant do differently?
Is Apple now to unwieldly to adapt quickly to changes?
Jeff Bezos recently said ‘If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.’
Apple is in its 42nd year, so it remains to be seen if one of the founders of Silicon Valley has more staying power left in it.More news posts
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