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Apple Inc. (AAPL) Rewards Key Execs as Stock Price and Sales Fall

Apple Inc. (NASADAQ:AAPL)

Apple Inc. has started the year on a less than impressive note and investors won’t be out of line if they start to worry about the prospects of their Apple shares in 2016. A well-known adage in investment circle says, “As January goes, so goes the year” but Apple wouldn’t want the rest of the year to be as rocky as the last trading session was. The shares of Apple dropped below $100 on Wednesday to $99.87 to mark the first time that the stock will drop below $100 since October 2014.

Apple Inc. logo

The firm has lost almost 15% in its trading price in the last one month to suggest that the stock is in a correction. One of the reasons behind the drop in the stock’s trading price is the fear that the iPhone 6S has not sold as well as the firm hoped. The second reason for the fear is that signs of slower growth are starting to emerge in the firm’s app store sales. Nonetheless, Apple execs are going home with fat checks.

iPhone 6S sales might be plunging

Apple has not given official word on its iPhone sales but experts have hinted that the sales of the iPhone 6S are subpar because Apple has slashed orders to Asian suppliers. A recent report from analyst Katy Hubert of Morgan Stanley predicts an annual sales decline for the iPhone. Apple had made a big bet on China with the iPhone 6S in the hopes of pushing sales with a bigger iPhone. However, the timing seems to be wrong in the light of the slowing Chinese economy.

Daniel Ives of FBR Capital Markets also notes that there are enough signs to show that iPhone sales have plunged in recent times. He says that Wall Street “was bracing for a cut but the magnitude here is a bit more worrisome and speaks to a soft March quarter on the horizon.”The drop in iPhone forecast has placed the firm’s part suppliers in a tight spot. Some of the firms have ceased productions, others have laid off staff, and some have sent workers on an early leave.

App Store sales are slowing

Apple made more than $6B from App Store revenue in 2015 but the firm might not be able to repeat the feat this year. Wall Street Journal reports that the firm’s App Store billing was a record $20B in 2015 – Apple takes a $0.30 cut one every dollar; hence, the firm made more than $6B. However, the signs of a slowing down have emerged in the App Store.

To start with, the firm reported a 50% increase in its total billings for paid apps and in-app purchases in 2014; yet, sales growth was only about 40% in 2015. More so, the firm said it paid about $15B to developers in 2015, to suggest that the firm had billings of about $21.4B last year. However, the $21.4B total billings suggests that Apple had a 43% increase in billings in 2015 down from a 50% increase in 2014.

Key execs get big fat checks

Apple seems to think that its key execs are doing a great job. Apple Insider reports that the firm’s key execs will be smiling all the way to the bank as the firm’s annual proxy statement shows that they are going home with big fat checks.

The fillings show that CEO Tim Cook received $10.3M in cash and stock in 2015 – Tim Cook seems to have received a $2M raise from 2014. The firm’s CFO Luca Maestri was paid $25.3M, Eddy Cue took home $25.1M, Dan Riccio and Bruce Sewell netted $25M each – SVP of retail Angela Ahrendts was the highest paid as she went home with $25.8M.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.