It is an interesting question, and one that I believe needs to be addressed from an objective viewpoint. The news media loves to hype economic figures and sling around wild statements without much regard for the potential consequences of what they say. With that said, let’s take a look at Apple’s economic health.
Apple’s Stock A Year Ago
A year ago, almost to the date, Apple was trading almost $32 more than it is currently; nearly a 25% drop in stock value (Source 1). A key thing to keep in mind is that stock value is simply a measurement of how attractive a company is to investors (shareholders) in relation to risk vs return on an investment and the current outlook on the level of innovation within the given company. What could explain Apple’s loss in stock prices?
Why Apple’s Stock Has Dropped
The answer is simple – As Apple’s CEO Tim Cook stated in an interview on CNBC with Jim Cramer, “people are upgrading at a different rate, a lower rate, than they did last year, but still higher than the year before ” (Source 2). Keeping everything in perspective, it is important to note that Apple, last quarter earned approximately $50,000,000,000 in revenue. After paying its employees, funding research & development, paying for advertisement, and giving generous bonuses to its CEO, Apple still cleared $10,000,000,000 in profits. To put that into perspective, Apple alone earned over double in revenue than the entire U.S. video game industry in 2015 in one quarter. (Source 3)
My Take On Apple’s iPhone
The bottomline is simple – Apple is producing excellent products that last quite a long time if you take care of the devices, keep up with updates, and purchase devices with more memory than the base model. I currently own an iPhone 6, not an iPhone 6s or iPhone SE. I can’t imagine that I will upgrade to the iPhone 7 unless I see a significant benefit from the standpoint of developing for the device with its specific added features associated with improved hardware and the capabilities of the anticipated iOS 10 that will most likely rollout with the device. Like, perhaps, most iPhone owners, I am very happy with my nearly 2-year old device. I knew the device would last, so I made sure I bought the 128 GB version, a decision I do not regret one bit.
So, I would recommend ignoring the hype from the media. Enjoy that iPhone and rest assured that Apple is doing just fine, and will continue to innovate for the foreseeable future. Just wait and see how its stock will respond when iOS is integrated into vehicles. The Internet of Things (IoT) is the thing of the not too distant future. Enjoy the interview below.