Is the level of Apple in decline? 7 reasons to confirm this

Is the level of Apple in decline? 7 reasons to confirm this

There is no doubt that there are obvious changes got after the departure of former CEO of Apple Steve Jobs and the appointment of Tim Cook instead of him, there is a state of confusion became apparent change in the views of the strategy that has reached Apple to abandon one of the most important elements of their strategies is the price, you will launch Apple iPhone cheap?. Why? .. Here you will learn about the seven reasons confirms that put Apple has become critical.

1 - Apple's share is too high

Some financial analysts believe that Apple's share price today's market is cheap, and they see that if I followed Apple in creating huge financial liquidity of $ 40 billion annually, it can reach the company's market value to about $ 390 billion and therefore profits are plentiful. But this is not absolutely true, where it is assumed that the financial future of Apple will continue to be what it is.

But if we divided the share price in the market on the annual earnings per share, and the result was less than the growth rate of the company's annual revenue, which means that today's stock price is too high. This is because the company's total revenues have declined in the first quarter of 2013 by 17%, and is expected to continue to decline albeit at lower rates at an aggregate level of the year. With this decline, it is unlikely that the company achieved the same level of the previous cash.

2 - Apple is nothing new in store

Although there are iPhone 5 S and iPad mini new, and is expected to attract attention, but actually these devices is not new compared shift quality that was achieved by Apple, it was the first to make a revolution in the world of smart phones and mobile devices, but today its new bear some amendments and updates both at the level of the system or hardware device. and, all these new devices are the new versions of the equipment is old, has seen a lot of customers do not need to replace their current phones new, but on the contrary may provide a step fatal to Apple a transition to Android and devices Samsung, Sony and HTC on the grounds that this companies offer the biggest developments from Apple.

3 - Matt innovation with the departure of Jobs

Although the team of engineers, designers and experts who have been working with Jobs to innovate those previous products are still working on the Apple TV, but the first teacher and a source of inspiration and innovation was gone, and here the problems started to appear, whether maps, new designs, new features in the system , and others ..The company has become today does not offer something new and revolutionary, but the worst that they provide harm it even things such as maps.

4 - iPhone cheap?

Apple relies in its work on a strategy of differentiation Differentiation, and the most important pillars of this strategy to provide high-priced products compared to competitors, and it became clear today that Apple is seeking to breach this important item by making iPhone cheap, thus reflected a decrease in the profit margin of the company.

Apple and even compensate this decline to provide something special to win a larger market share, and therefore either to provide the benefits of the best product from competitors and price asymptotic them to attract users of its current acquisition device and at the same time access to new segments of users.

Or by maintaining a high level of price usual device provides the benefits of a high and impressive design. The cheap iPhone apparent shift from a strategy of differentiation and the trend towards low-cost production, and it is expected to reduce the cost of apparatus to Apple below the level of the cost of competitors, considering that the company is facing a very high fixed costs (the new main building cost $ 5 billion).

5 - do not bother the moon .. Towards towards the stars

From the perspective of investors, Apple, the production of a cheap is good for them on the one hand, as this will facilitate the task in front of the company to remedy the decline, as all of it cleanly get the iPhone and the price was an obstacle in front of him, will now buy even on a trial basis. With the decline in profit margins on Apple to work on the penetration of new markets, new segments of users, and price competition is important to have if it will not reach to the level of prices of Samsung.

And therefore in terms of investment, it is not right for Apple to bet on these expectations at least in prices and profits, because they do not conform with the basic strategy, but it may be an intermediate stage even rectify retreat and back to straighten out the distant stars.

6 - TV or smart-hour? Or both?

Is almost certain that Apple is working on two devices, and Tim Cook's recent statements emphasize more the subject of television, where between that there is a promising market in this area and made ​​some statistics that confirm his words. The wristwatch smart Apple is a move to keep up with other companies that will enter this area, at least for the user is wearing wristwatch smart easier it from glasses Google smart, we humans accustomed to wristwatches than a hundred years at least, but the glasses where cameras and processor and screen, that's been known in science fiction movies only.

Whatever product launched by Apple, it will inevitably at a high price, perhaps a step to compensate for the decrease in profit margin iPhone is cheap, and as an entirely new product from Apple will be the turnout of fans of the company and not ordinary consumers. But these producers will have two great role in reviving the company's profit growth to the desired shape.

7 -Apples eye narrow 

Through the continuation of Apple's high price on a strategy for a long time, and with the recent errors, lost its image as a company offering attractive products and significant change in the rules of the game as it was the first iPhone appeared in 2007. Thus some analysts believe that Apple should give up the day for a high price strategy, and focus instead on quality and reasonable price.

This view does not like Apple investors because it means a decline in the company's income thus returns on their investments, and in the era of Steve Jobs pay people 45% increase for the iPhone 4S compared to similar phones, therefore company's profit margin rose 70%. But today put Apple does not allow it to achieve such high margins, which means that you must give up pride and in line with the policy of offering products at competitive prices, reasonable, and this requires them to reduce their costs by more than competitors.