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Apple’s Gloomy Growth Prospects

License: Creative Commons

License: Creative Commons

In the past 52 weeks, Apple Inc. shares (AAPL) have seen a low of $385.10 per share and a high of $ 705.07 per share with the latest share price having investors beg the question “Is Apple a smart value play?”

Apple’s growth has been incredible over the past two years, with double-digit growth for sales and profit. Unfortunately for Apple, it has not been an upward incline of the share price. The peak was achieved in September 2012, just around the time the iPhone 5 was unveiled and the lowest point this past Friday.

The consensus is that while margins will decline, Apple will increase sales and profitability over the next year, although not by as much as in the previous year.

The reasons for its decline are many, with the most recent being the price is being impacted by the market’s belief.  Its dominance too in smartphones has been lost. Last year Samsung, with a 30 per cent market share, knocked Apple off the top spot. This is further compounded by the lack of new markets. Any remaining new markets don’t represent a huge growth opportunity for Apple relative to total sales which could further constraint the growth for the tech giant.

While Apple is certainly not doomed, its future looks gloomy. That’s why its’ latest earnings expected to signify the company’s fall in profit in ten years, will be important in illuminating the company’s future strategies for recovery.

 

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