Apple released their earnings report on Wednesday and it fell short of analysts’ predictions, further solidifying the idea that Apple may not be the smartphone king it once was. These results have led to the largest percentage fall in share prices for four years, hitting $450, a fall of 12% in one day.
Back in September the stock hit $702, giving them a market value of over $650 billion. At its current price (~$450) they have a market value of $416 billion, a drop of $234 billion. That’s huge – the second largest U.S. company is Chevron Corp valued at ~$234 billion.
The worries started a few weeks ago when Peter Misek (analyst for Jefferies & Co) reported that suppliers were getting reduced orders from Apple suggesting a slowdown in sales. As Samsung starts to pose a real threat to Apple, they need to start innovating more with their iPhone line.
Apple sold 47.8m iPhones over Q4 2012, their best quarter yet. However analysts predicted sales to be at least 50 million units. Another disappointment is in their profit margins, coming to 38.6% (it was 44.7% a year earlier) probably due to their iPad sales damaging Mac sales (which have a particularly large profit margin, much more than the iPad).