Apple Inc. seems to have lost some of the faith of its investors and that’s causing the firm’s stock to face strong headwinds. On Monday, shares in Apple lost as much as 3% during the session before moving up slightly. Yet, the damage is done and the stock still closed with a loss of 0.62%– the stock had lost another 0.16% in pre-market trading today at time of writing.
Samsung seems intent on striking Apple now that it’s weak as the Korean firm heads all the way to the Supreme Court to challenge an earlier ruling in favor of Apple. Apple had won a patent dispute with Samsung after a jury determined that Samsung illegally copied some patented parts of how the iPhone looks. The jury at the federal appeals court in Washington asked Samsung to pay $399 million to Apple.
Samsung back in court with Apple
Apple Inc. has being facing challenges in its share price lately and the new lawsuit that Samsung filed might further weaken the firm. Samsung has gone back to court to challenge the earlier ruling in favor of Apple and if Samsung should win this lawsuit, it could erode some strength of the Apple brand.
Apple has been successful in the smart phone space largely because it sells its phone at a premium and it makes massive profit from the sales. In fact, the firm makes more than 90% of profits in the global smart phone space despite the fact that it controls less than 15% of the global market. Tim Cook is able to sell his iPhones at a premium price because of the strong brand image rooted in the fact that iPhones are unique.
If Samsung can prove to the Supreme Court that the iPhone is not unique after all, other OEMs might copy other elements of the iPhone and get away with it. That could result in Apple losing part of its market share. The shares of the firm had already tanked after analysts at Morgan Stanley said that iPhone shipments would drop by 6% in the current fiscal year.
Apple is weak
The shares of Apple Inc. have failed to catch the rally that tech stocks experienced this year. For instance, shares of Netflix are up 140.9% in the year-to-date, Amazon is up a massive 108.1% in the YTD. Alphabet is up 40.5%, Facebook is up 31.65 and even Microsoft is up 16.8%. Apple on the other hand is up a measly 0.2% in the year-to-date period.
Apple stock has lost a massive 16.39% since reaching a 52-week high of $134.54. The shares of the firm are sitting in a strong correction and it doesn’t appear as if the stock would see a change for the better anytime soon. The firm is seeing a weakness in its sales, its new product lines have not gained strong traction, and the stock has a glass ceiling in its last 52-week high.