AH Tech Talk: After Record Sales, Apple's Stock Plummets; But Why?

When Apple posted their Q4 results yesterday, the market was ready and waiting to see just how well the company did. It's perhaps strange to think that pretty much everyone watches how well Apple do but, even companies that have nothing to do with tech watch their profits and their stock very closely. If there's one company to watch when it comes to the U.S. Economy, Apple is it. Never before has such a consumer-facing company continually sold in such quantities, time and time again, quarter after quarter. In fact, Apple's Q4 earnings were the most profitable ever recorded by a technology company.

So, how well did Apple do? In a nutshell: brilliantly. Here are some of the headlining numbers: iPhone sales were a record 47.8 million units, compared to 37.04 2011 Q4, iPad sales were again at a record high at 22.9 million, up from 15.43 2011 Q4. That's a lot of devices sold, and that's just Apple's two major flagship products. Mac sales were down to 4.1 million from 5.2 million the year before and the iPod is continuing its slow death, posting sales of 12.7 million, down from 15.4 million the year before. All-in-all Apple sold roughly 75 million iOS running devices. These record sales add up to a whopping $12.8 Billion profit on $54.8 Billion revenue.

So, that's a lot of cash and it's a lot of devices sold. And yet today, as of writing their stock is down by 10%. Surely, this makes no sense?

Well, it doesn't make a lot of financial sense, not to me at least and I'll confess to being awful at math. However, when you think about it, there is perhaps a reason for this fall. If you're thinking it's got a lot to do with Wall Street and its ridiculous and inflated forecasts it hasn't, because Apple actually beat expectations set by the Street. Well then, what could be behind this fall in their stock rating? Personally, I think it has a lot to do with Apple's unwillingness to change with the market.

The smartphone market has definitely evolved and yes, larger-screened devices have had  a lot to do with it but, that craze isn't new, the 4.3" EVO 4G dwarfed the iPhone back in 2010 and the 4" iPhone 5 isn't cutting it with consumers when it comes to a "new" product. Consumers are using their smartphones - and tablets - more like the computers. Remember when PCs were rapidly changing and every 12 - 18 months you'd get a massive speed boost or fancy new monitor with more pixels than ever before? Yeah, that's today's smartphone market. 1080p displays are here to stay in the high-end and if you buy a new smartphone every 12 - 18 months, you're more than likely in for the same experience of getting something "new" back when PCs were super popular.

Now, Apple's "post-PC" era is beginning but, it doesn't look like Apple are the company pushing the boundaries of what mobile technology can do. Yes, they sell more devices each quarter and there's no denying they make more money than everyone else in this game but, can sales keep you at the top? Consumers seem to want something "new" all the time and with the rapid pace of Android-based devices - and even Windows Phone to a certain extent - the iPhone is no longer "new".

Samsung have used this to their advantage in their marketing campaign used throughout 2012 and it worked as the company has sold 40 Million Galaxy S III devices and they're king of the Android hill. HTC, Sony et al are all trying new things - new sizes, new screen resolutions etc. Apple on the other hand, are keeping things with the iPhone very black and white.

It's this perception of "new" that appears to be hurting Apple, the iPhone is a good device, it's well-built and quicker than before but, it's not exactly fresh. The iPad, on the other hand, is still going strong but, even that looks just like it did back in 2009. The market is moving on with its life and Apple looks set to stay as close as to the formula that Steve Jobs showed off on stage in 2007 for as long as they can.

If you were to travel back in time and hand someone in 2007 an iPhone, they'd know it were "different" but would they think it "new", perhaps a little but, not too much. This is fine a lot of people - familiarity is a comfortable thing - but, the market wants to see something new, fresh, and exciting. This is the time that a lot of science-fiction of the past is becoming reality, a formula that is little over 5 years old isn't cutting it anymore.

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About the Author
2015/07/IMG_20140924_130551.jpg

Tom Dawson

Former Editor-in-Chief
For years now I've had a heavy interest in technology, growing up with 8-bit computers and gaming consoles has fed into an addiction to everything that beeps. Android saved me from the boredom of iOS years ago and I love watching the platform grow. As an avid reader and writer nothing pleases me more than to write about the exciting world of Android, Google and mobile technology as a whole.
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