Apple shares plummeted 10% on Thursday, January 3, 2019 after Tim Cook, Apple’s CEO, announced that Apple’s quarterly estimates went down- a first in more than 15 years.
According to Cult Of Mac, a daily news website that follows everything on Apple, shares declined to as low as $146.22 a share as of January 3rd. This has been the lowest point that Apple shares have hit since July 12, 2017. Overall, a continuous contraction in Apple business has shown, with Apple losing 35.5 percent of its value in just three months.
The reason for the sell-off on Wall Street was Tim Cook telling investors that Apple would bring in around $84 billion for the three months leading up to the holidays, the fourth quarter of the year in business terms. This was less than Apple’s fourth quarter estimate, which were between $89 and $93 billion.
China is one of Apple’s largest areas of economic prosperity. Apple is pinning an economic slowdown in the U.S. and China, due to heightening tension caused by the trade war imposed by Trump, as one of the biggest cause for declining quarterly estimates. Other experts placed the plunge on other factors, including increased competition from other telecommunication companies like Huawei and Xiao and less consumers buying Apple products.
According to Street Research, American consumers are holding onto their phones for three years or longer compared to four years ago when Americans would upgrade to the newest phone after about 24 months. This was reported in the Washington Post.
Daniel Oh, a sophomore at Mt. Hebron, who is a current owner of an Apple phone said what attracted him most to Apple phones is its “design and cool features, like airdropping, etc. which I feel are the most key components to a phone.”
For some students, like Oh, getting new Apple products is not a concern.
“There aren’t new and cooler features coming up. It’s just the phone getting bigger and I like the size of my phone,” said Oh.
Apple also affected Wall Street, with the Dow, a stock market index that indicates the value of 30 large, publicly owned companies based in the United States, and how they have traded in the stock market during various periods of time, dropping 660 points, or 2.8%, on January 2.
According to freshman Andy Pu, it is unlikely that Apple will continue to struggle for a significant amount of time.
“I don’t think it’s going to continue because Apple always creates some new product that consumers will suddenly start to buy” said Pu.
To boosts stocks, Apple will release three new iPhones. According to Jesus Diaz, a freelance writer, these phones the company are going to release are its most powerful phones, “thanks to the A12 Bionic chip, and they offer much-improved cameras with features like Smart HDR. Apple also delivered its biggest screens ever on an iPhone with the 6.1-inch iPhone XR and 6.5-inch XS Max.” These new releases Apple is planning to release though, might change the tide for Apple to once again regain its position is the most valuable company in the world.