Apple Inc., a company in decline?

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In 2012, Apple Inc. surpassed companies like Exxon or Microsoft for some weeks to become the most valuable company in the US. Since then the tide seems to have turned. Balaji Viswanathan from “Forbes” and Cyrus Mewawalla from “Seekingalpha.com” exemplify the extremely different perspectives currently associated with the company.
 
Impressive financial results for 2012 reported by Apple at the end of January were followed by a slump in its share value of 8 percent bringing it down about 30 per cent compared to its peak in September 2012. A variety of factors worry commentators and analysts. Firstly, the iPhone, cash cow and most important product of Apple, found respectable competition and no longer ranks first as a close to unrivaled device on the must-have phone hit lists. Especially for Asians and young consumers the iPhone, now in its fifth generation, is not as “cool” anymore as it used to be. Evidently Apple needs new innovative products, but there are doubts if the two devices most likely entering the market in 2013 can significantly contribute to future earnings. How an iTV will fit into Apple’s ecosystem and attract a target group turning away from TV to mobile devices is an open question. Also the iWatch, a comparably low-priced device, seems more driven by curiosity and hype than filling an actual need or delivering new forms of usage.
 
Shares have tanked, but the bottom line is that Apple remains a company with enviable profitability. There is a lot of room for concessions on margins and less pricey product lines to broaden the customer base. However, Apple has already started to become a company among many in the market and it has lost some of its previous magic. It will most likely not fall like Yahoo did many years ago, but may also never become the most valuable company ever again.