Apple started Tuesday’s trading on the stock market without its prestigious status as a $1 trillion company. It has been a tempestuous few weeks for the company in Wall Street. So far the iPhone maker has lost nearly $190 billion in value. Despite this, Apple still remains the most valuable publicly traded company in the world with a market capitalization of $921.41 billion. Apple shares were down by 5% at the start of the trading on Tuesday hitting about $194.17 per share.
There are concerns among investors that the recently released iPhones may not be big sellers in the holiday season as expected. Lumentum, one of Apple’s largest suppliers, revealed that it had received a request to reduce shipments from its largest client. Although the company didn’t mention Apple specifically, the American company is listed as Lumentum’s biggest client. This sparked fears among investors that the sale of new iPhones may not move as fast as they had hoped for.
Analysts also believe that Apple may not hit growth targets for 2019 and there’s a need for the company to start thinking of new ways to fix this moving forward. Apple has expanded its service offerings but even those haven’t done enough to bridge the slow iPhone sales. The company said during a conference call with investors recently that it will no longer report unit sales for all its devices. Apple argued that unit sales aren’t that important, especially if the company is going to report the total value of sales. However, this news wasn’t received well by Wall Street. There was speculation already that the low-cost iPhone XR retailing at $749 isn’t hitting the sales target set ahead of its launch. Many investors interpreted the decision by Apple to stop reporting on unit sales as confirmation that indeed the XR may be struggling to build traction in the market.
The loss of $190 billion in value over the last few weeks now means that Apple is no longer a trillion dollar company. Apple was the first company to have reached this milestone when its shares surged in August this year. Amazon was also able to hit that mark a few months later but that success was short-lived.
Smartphone sales have struggled over the last few years not just for Apple but for other smartphone makers too. It looks like it’s taking longer for people to replace their devices. Although Apple has tried to add new features to its releases, they haven’t been enough to attract new buyers. But the American company has always found a way to keep sales up even with lower unit sales.
The iPhone has always been targeted for high-end buyers and their cost does suggest that. However, many analysts think that perhaps this high cost is the main reason why the company hasn’t been moving products as fast as expected. Apple did respond with a cheaper version of its flagship model in September this year but even that doesn’t seem to be working. At the moment, the company is trying to diversify its revenue sources by offering additional services to its existing customers.