Weak iPhone Sales Cost Apple Nearly Half A Trillion Dollars In Market Cap
Apple remains the most valuable company in the country, but it’s worth $430 billion less than it was two months ago — largely, analysts say, due to concerns the new iPhones arrived too late.
At market’s close on Friday (Oct. 30), Apple’s market capitalization was $1.862 trillion with a share price of $108.86. Apple’s market capitalization had been $2.295 trillion on Sept. 1 — its all-time high with a share price of $134.18.
The decline amounts to 19 percent.
“The drawdown comes as the tech giant reported iPhone sales that missed analysts’ estimates and gave no forecast for the holiday quarter,” Bloomberg reported Friday.
The release of the new iPhone 12 later than usual in Apple’s product-refresh cycle — it went on sale Oct. 23 — has been put forth as a big factor in fourth fiscal quarter iPhone sales that were off 20 percent year over year. Sales in China also were off year over year. Apple’s fourth quarter and fiscal year ended Sept. 26.
Apple CEO Tim Cook noted in the fourth quarter results announcement that the company posted “all-time records for Mac and Service.”
“Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive,” Cook said. “From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion and the kinds of big ideas that only Apple can deliver.”
Services generally generate margins about twice those of hardware sales for companies such as Apple. In the latest earnings report, Apple offered few details into the reason for the services numbers it posted.