Apple stocks have recently gone for a nose dive, and many in the stock markets are not surprised, considering the speculations around the tech sector losing its dominance. While the first-quarter earnings of the tech giant remained optimistic, the company has not been able to assert its dominion in the following quarter.
The last quarter report suggested that the stocks of Apple managed to outperform the market analyst estimates. During a conference call with the stakeholders of the company, Apple management faced a considerable amount of criticism about increasing issues related to the supply chain and unwarranted price hikes.
The management of Apple Inc. claims that the distribution of trillions of USD in the form of stimulus checks was a reckless and irresponsible tactic of the US government and Federal Reserve. The company further stated that due to the stimulus, the generational demand in the consumer markets increased, and it can result in a decline in iPhone demand for several years following 2023.
The company is also making cost cuts like discarding the addition of 5G kickers in the upcoming models that iPhone 13 users were able to enjoy. The company pointed out that 78% of iPhone users hail from a 35-year demographic.
A large portion of the strata is dependent on fixed disposable income that is affected proportionately by inflation. With little savings to back them up, consumers are more likely to prioritize their ever-increasing mortgage and credit payments rather than opting to purchase iPhone.
Saudi Aramco Overtakes Apple to Become the Most Valuable Company
With its weakening position, Apple stocks recently fell below $100. The title of the most valuable company was handed to a Saudi company named Aramco.
Chinese markets account for around 20% of the total Apple revenue. However, citing the issues of the COVID pandemic, the Chinese supply chain sector also suffered from a 40.5% decline. On the other hand, the dependency of Apple Inc. for operational purposes is much higher than estimated. Financial analysts are vouching for a 10% revenue decline in 2023 that can deepen in 2024.
iPhone has remained one of the most popular Apple products since its launch in 1977 by Steve Jobs. The smartphone market is flooded by cheaper alternatives that are stacked with tons of features. Under the dire economic conditions, breaking logistic support, and increasing fuel prices, the tech giant might be in for a rough ride in the coming months.