Image: Apple |
Yesterday proved to be one of the most difficult days for Apple and Tim Cook, even having CNBC calling it “a dark day for Apple.” Shares of AAPL stock plunged 7%, or about $10 per share, during after-hours trading. This led Apple CEO Timothy D. Cook to issue a letter to investors.
In the letter, Tim Cook said that he projects Apple to lose an estimated $9 billion dollars in revenue from its initial projected outlook.
Apple published this initial guidance for the fiscal 2019 quarter in November:
I want to make this crystal clear, some believe that Apple is doomed for the fact that they are on track to lose $9 billion dollars. But, Apple’s current market cap, despite the stock fiasco, sits at $750.91 billion as of this writing, higher than the entire GDP and Nominal GDP of Switzerland—which sits at $678.57 billion—and the Nominal GDP of Saudi Arabia, which is $683.82 billion.
Furthermore, in the letter to investors, Tim Cook highlighted the fact that “Our installed base of active devices hit a new all-time high—growing by more than 100 million units in 12 months. There are more Apple devices being used than ever before, and it’s a testament to the ongoing loyalty, satisfaction, and engagement of our customers.”
If a company was “doomed” it would not be able to maintain a growing active user base like Apple has.
Despite all of this, Apple still maintains the highest customer loyalty of almost any other company. I believe that the stock fiasco from yesterday will allow Apple to re-evaluate itself, and hopefully, lower the price of future iPhone models to ensure it will sell better. Of course, Apple will need more than just a lower price, they will need to innovate again, something they have been lacking in recent years.
There’s one specific thing I believe about Apple and the iPhone: iPhone is, and always will be, the core of Apple, and without it, Apple will fail.
To learn more about what I expect from Apple in 2019, you can read that article here.