Apple Experiences Valuation Decline

Apple consistently holds a spot in the “Big Five” of technology companies. Apple’s massive valuation and market share ensure the company remains a power broker for the indefinite future. Valuation numbers, no matter how grand, remain subject to change. To Apple’s chagrin, the company lost about 6% of its value. Previously, Apple boasted of reaching the staggering figure of $1 trillion in valuation. The 6% drop means Apple isn’t worth $1 trillion anymore.

Several reasons exist for the valuation decline. For one, holiday quarter sales weren’t what Apple expected. iPhones consistently serve as substantial revenue generators for the company. Recent iPhone sales figures, however, appear weak. Apple appears reluctant to release sales figures on iPhones. The actual sale numbers must be embarrassing for the company.

As a publicly traded company, Apple must eventually release the data. Perhaps Apple wishes to delay the reveal to avoid consumers further souring on the product. Sales could decline further as consumers wonder why iPhones aren’t moving. Frequently, consumers assume something must be wrong with the product. A quality product moves well in the market. In reality, even a great product can experience soft sales. Weak sales, unfortunately, deliver bad publicity.

According to financialpost.com, another reason exists for Apple’s decline in the market. The Dow Jones trended downward heavily for parts of October. When the overall market does well, various companies ride the tide of a good economy. Apple can suffer when the Dow drives.

That said, Apple isn’t always an “innocent victim” suffering from the Dow’s decline. On November 2, 2018, Apple’s share price slide contributed greatly to the Dow experiencing a slide. Apple isn’t a company facing imminent collapse. The company lost $67 billion in value. The company’s net worth is still well within striking distance to reach $1 trillion again. The restoration of value milestone won’t happen unless iPhone sales start booming again.

 

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