Is Apple Losing Investor Confidence – Expectations Vs. Delivery

06:06:00

In the last 5 years, Apple innovative products ignited its share prices. The emergence of Apple as mobility product leader with differentiated value proposition enabled them to command premium price for their product compared to competitor. Even their loyal customer base also supported them by buying their product with a presumption that product would be innovative and different in design. Share price skyrocketed from $80 in 2009 and touched $700. The huge success of iPhone and recurring high margin ecosystem revenue pushed Apple EPS multiple fold. The QoQ and YoY supersonic growth rate brought in speculators and pushed share prices to new high. Many analysts started predicting that share price is going to touch $1000 soon. The shock wave came with one misstep around Map and investors got trapped in negative direction. Apple also lost its iconic thought leader and motivation face Steve Job which prompted many analysts to doubt about Apple continuous focus on research and innovation during their half yearly product launch kept many investor on the sideline. Even during economic downturn in US, Europe and Japan; Apple continued their explosive growth. For the last two to three quarters, Apple is showing little vulnerability while Samsung got very aggressive in pushing their Galaxy range of Smartphone and Tablet. Investor’s started expecting that Apple is going to react with low cost device to increase iOS market share to keep continuing attracting application developer and maintain strong ecosystem in order to sustain minimum earning growth expectation from investor. On a contrary, Apple new device launch indicates that Apple is still weighting on maintaining profit margin compared to regaining lost mobile OS market share. Post device launch, Apple share price lost more than 8% clearly showing low confidence factor. Once, the darling of Street is slipping its grip to be maximum value generator whereas Google is gaining confidence from investor.

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