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Apple is losing market share and company value

Apple lost its title as the world’s most valuable publicly listed company to oil giant Exxon Mobil after remaining on the throne since August 2011.

The dethronement of the tech giant came just after it published a lower-than-expected quarterly earnings report. Market watchers and consumers worldwide are wondering whether Apple could reclaim its glory?

Analysts did not give a “nay,” while admitting challenges ahead, especially the company’s ability to carry forward its innovation legacy and tap into the Chinese market to win back consumers
‘ hearts.

VALUE VAPORIZING

As the stock market closed on Friday, Apple’s shares slid by 2.36 percent to US $ 439.88 dollars per share for a market value of around US$ 413 billion, second to Exxon’s some US$ 418.2 billion.

With almost a month into the new year, Apple’s shares slumped 17.3 percent, including a more than 12 percent free fall made a day after the release of its lackluster earnings.

Compared with its historical intraday high of US$ 705.07 per share set on Sept. 21, its price has retracted by 38 percent, with about US$ 250 billion vaporized in market value, which almost equals to that of Google.

In the quarter ending Dec. 29, Apple made a record-high profit of US$ 13.1 billion on revenue of US$ 54.5 billion, yet still less than Thomson Reuters’ prediction. Apple sold a record 47.80 million iPhones and 22.90 million iPads. But the performance also missed analysts’ forecast.

WHAT TRIGGERS THE FALL

Clearly the fall was triggered by Apple’s weak earnings, but a lack of innovation in Apple’s latest products that can “wow” the market is a crucial reason.

“They’ve got no blockbuster product on the horizon yet,” said Kenneth Polcari, a trader of O’Neil Securities.

“Investors have gotten so used to Apple coming out with some major blockbuster announced every single time. But they disappointed them,” Polcari told Xinhua.

Besides, the company has a poor use of cash. “They’ve got more money in their balance sheet and they didn’t announce anything to do with that money,” Kenneth said. Not an acquisition nor a stock buyback, he added.

Apple seems to be “wasting its massive hoard of cash by letting it sit, instead of increasing value of the company through acquisitions, more expansion plans, or other value-added initiatives,” Helix Investment Management echoed the idea in a report on the U.S. stock market analysis website Seeking Alpha.

Another reason is that Apple’s high-end strategy is squeezing its market share amid rising competition and heating patent wars on the smartphone and tablet market.

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