Apple’s shares suffered a 2% loss on Monday after a Wall Street analyst shifted his rating of the stock from “sell” to “neutral”. The analyst warned that Apple’s performance on the market will suffer due to a “fundamental deterioration” in the coming year. Jun Zhang, an analyst at Rosenblatt Securities, says that the iPhone is largely responsible for the low performance of the company. The current crop of “$1,000 phones” will continue to experience disappointing sales and according to Zhang, this is because the company has failed to generate as much excitement about the phones as they have done in years past.
Low sales of the iPhone, coupled by the normally low sales of the other products offered by Apple all combine to keep Apple’s revenue numbers low and the possible numbers won’t be high enough to attract investors according to Zhang. The analyst predicts that iPad sales will slow down in the second half of the year and the growth of the other products on offers, such as the AirPod, iWatch and HomePod, will likely be unable to support total revenue growth.
Apple’s Challenges
The downgrade on Apple’s stock saw the company suffer a 2.1% loss and the stock closed at $200.02. This slide brings the sale ratings on Apple to 5 and this is the first time since 1997 that five analysts have recommended selling the stock according to a report by Bloomberg. This was prior to the launch of the first iMac desktop computer which brought the company back on track to being valuable. As things are, 23 analysts say “buy” on Apple while 21 say “hold”.
The woes faced by Apple have also been compounded by the announcement made by the company last month that one of their top designers, Jony Ive, was leaving the company. Ive was employed by Apple for close to 30 years and he was responsible for the design and looks on all of Apple’s flagship products. Ive’s departure from the company was reportedly fueled by his frustration with Tim Cook’s disinterest in product design although Cook denies these claims. Ive remains positive about Apple and he said that he was more positive on global iPhone demand after recent supply chain checks that were applied in Asia.
The lack of innovation at Apple has led to the company’s stock falling and an analyst predicts that the stock may suffer more due to low revenue in the second half of the year. The company has failed to generate as much excitement about their offering as they did in previous years and the recent departure of top designer Jony Ive has added to the company’s current problems. The company’s shareholders will be looking at the events surrounding the company closely in the next half of the year to see how it performs.
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