Apple has witnessed a 10% dip in share value due to declining sales of its products and the mistrust it has brewed with regulators in major markets.
- Last year, Apple’s stock rose by more than 48% to US$ 192.53 but has since fallen to US$ 169.67 as of Wednesday, Apr 10.
- The company witnessed its greatest trading value last year on December 14, selling at US$ 199.62 after a positive report from its contract manufacturer Foxconn.
- Apple’s market capitalization sits at US$ 2.6 trillion compared to its rival Microsoft which has surpassed a market capitalization of US$ 3 trillion after embracing Artificial Intelligence.
The US Department Of Justice also filed an Antitrust lawsuit against the tech company, accusing it of ‘suppressing mobile cloud streaming services’ and ‘blocking apps’ thus shielding its users from other products and fostering a monopoly.
“Apple has locked its consumers into the iPhone while locking its competitors out of the market. By stalling the advancement of the very market it revolutionized, it has smothered an entire industry,” said Deputy Attorney General Lisa Monaco.
The Antitrust statute was formulated to promote fair competition and prevent giant companies from ‘walling in’ their customers in products with diminished utility. In March this year, the European Union fined the tech giant US$ 2 billion for breaking Antitrust laws by blocking iPhone users from learning about Spotify – a cheaper music streaming alternative to Apple Music.
“Apple has abused its dominant position as a distributor of music streaming apps, and as a result, European consumers did not have a free choice as to where, how, and at what prices to buy music streaming subscriptions,” said the EU’s competition and digital chief Margrethe Vestager.
What Next?
Frictions with regulation bodies in crucial markets will complicate matters for Apple as boosting sales would depend on how they navigate them. The company has lagged in the AI race, as industry experts watch closely to see what products Apple will unveil this year to disrupt the market. There are concerns that Apple services are still too costly for some demographics.
The company’s lack of interest in the African market has also raised eyebrows. A 2023 Statista report mentions that 80% of the continent still relies on Android. iOS retains a small percentage of users even in tech-savvy markets like Nigeria, South Africa, and Kenya. The company does not have any official stores in the continent, relying on third-party distributors. If the company continues to face a sales crunch in formerly robust markets, it may have to aggressively clinch a larger market share in Africa to supplement its earnings.
Some investors are optimistic about a rebound in performance after Apple recorded revenue growth in its first quarter compared to the preceding four quarters. Other investors are worried. Apple reported that it did not attain projected sales for its most profitable product, the iPhone, with its second-largest market China registering a 24% drop in sales in February this year.
- Recently, the company struck off its plans to manufacture electric vehicles with self-driving features, subsequently laying off more than 600 employees in California.
- A survey by ResumeBuilder states that 40% of business executives this year have projected that they will lay off employees either due to tough operational conditions or by optimizing AI.
- Tech companies that have so far slashed their workforce include Google, Discord, Twitch, eBay, Microsoft, and Salesforce.
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