Following Apple’s earnings results last night, where it posted its first YOY quarterly revenue decline since 2003, AAPL has opened down more than 8% — the stock price is far below the $100 mark as morning trading begins. Apple reported revenue of $50 billion (compared against $58 billion in the year-ago quarter), on sales of 51.1 million iPhones, 10.2 million iPads and 4 million Macs.
The stock price fall means over 40 billion dollars of market cap value has been erased overnight. Market capitalization is the approximate value of the company, a multiple of the stock price and number of shares. The stock closed yesterday at $104.
In its earnings call, Apple CEO Tim Cook and CFO Luca Maestri remained optimistic about future business performance although investors and analysts were disappointed with the weak revenue guidance numbers Apple reported for next quarter.
Cook did say that both the iPhone SE and 9.7 inch iPad Pro had impressive launches; the sales of those new devices will appear in the June quarter results.
The stock opened down more than 8%, seen in the pictured graph as the steep crater, but has recovered slightly in early trading. It is currently down 7.15% priced at $96.90 dollars.
Although the fall still leaves Apple as the biggest company in the world by market cap, at $532 billion, it is now much closer to Alphabet (Google) — it’s closest rival. Alphabet’s market cap rests at around $480 billion.
BREAKING: Apple shares open down 8.3%, erasing more than $40,000,000,000 in market cap » https://t.co/C9RCFms1xP
— CNBC Now (@CNBCnow) April 27, 2016
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This is quite terrible. How did it come to this?
Ps, I don’t think iPad Pro will stop iPad sales falling every quarter. I do not understand which product you need to buy if all you’re let’s say a writer and travel a lot. You have 3 options: Macbook, Macbook Air and iPad Pro. I think Apple just added a keyboard to the iPad because people were asking for it. But the reason it didn’t get a keyboard from the start, was just to differentiate the tablet from the laptop. Because the iPad was meant for ultimate portability. Adding a keyboard to it blew up this idea.
I wonder how Tim would answer on this question ‘If I’m a writer and travel a lot, what should I buy?’
I think that the writer would get a Macbook Air. It’s cheaper than iPad Pro (taking the 128GB model), has better battery life than iPad Pro and Macbook, has a real OS, is more powerful than any of the machines I named above. The only thing you’re missing is a retina display. I have a 5K Retina iMac, Macbook Air and a 17inch Macbook Pro. I don’t think the Macbook Air has a bad display at all.
So iPad Pro 128GB Wi-fi only with keyboard costs 1120$, a 128GB 13inch Macbook Air costs 1000$, and a 256GB Macbook costs 1300$.
Sorry but please tell me why iPad Pro is better? The only person it’s better for is a professional artist. Like if you draw a lot and stuff. Otherwise I do not see why you would get the iPad Pro above Macbook Air.
A little perspective – this was an earnings miss in a mixed economic environment. Apple is still the most profitable tech company – more than GOOG, HP, and FB combined. They’re not going anywhere
I totally agree with you! Yes, it is really because that most people are trying to save money now. The mixed economic environment is worse than you think. Especially in China. The stock market is already collapsed and every one tries to stick to their old iPhones and save money for the potential rainy days.
Most people I know that have iPad Pros (only 4 others) have them alongside a big 15″ macbook pro.
So your complaining because Apple has given a writer three options?
I for one choose iPad over a Mac. My wife loves her iPad Pro. I have not used my MacBook Pro once in the last 3 months. It’s just collecting dust.
iPad has many more software options. The software I need to use daily is on iOS but not Mac. The iPad Pro fills a void!
I actively use both my 9.7″ iPad Pro, which wasn’t included in this quarter results, and my MacBook Pro. I use my iPad Pro for writing in class, playing games, and more. My MacBook is used more for when I have to code different websites, and when I have to upload pictures from my camera.
I’m more of an actor. but I do a lot of writing as well. I carry my iPad Air with me everywhere and use Pages because it’ll synch through iCloud.
But I finish the documents, clean, edit, format, and such on my MacBook Pro.
I’m a writer, and I travel a lot. iPad Pro with the IA Writer app is all I need.
The iPad Pro will make sure Apple captures as much profit as possible out of those people that do buy iPads. If they are going to sell less volume, it’s better to go for the high end of the market. So far the I have seen the iPad Pro (the 9.7″) being being snatched up by studio photographers that use them in their workflow and have fallen in love with the expanded color range. I know a few companies that are buying the larger iPad for their sales teams. Built in LTE and large screen being the two main reasons.
Despite having a perfectly good Mac Pro and 2015 15″ MBP, I am considering a new iPad Pro to replace my iPad Mini 3. (or use in addition to it), It’s not like the devices are zero sum purchases. Many people buy more than one device and use them as their needs and wants require. I’m more than likely to use an iPad on a plane or in bed than a laptop but I will use a laptop to write or work on files that require detailed attention. A desktop more for video editing and heavy graphic manipulation. I don’t think I have ever weighed buying something across two separate form factors simply on price. If I had to buy only one device, I’d shoot right in the middle and get a high end MacBook Pro. I’d suffer on the processing power a little and not have the best portability but still have enough of each to be productive and mobile.
Short answer: it’s not. I sold my Air 2 (which really I only used to watch movies and play games on flights) for a 128GB Wifi + Cellular Pro because I’d convinced myself that it would be easier to edit photos (a big part of my job) on a tablet than on my Macbook. Yeah, not so much. So far most of the apps are half baked, and while I can accomplish 90% of each edit on the iPad, I’m still having to go back to my Macbook to finish the job. 1) This slows down my workflow, and 2) what’s the point of having the iPad if I still have to go back to my Macbook just to accomplish what I bought the iPad for in the first place? Altogether I paid $1099 for iPad, covers and Pencil, when for 200 more I could have just gotten an Macbook as you pointed out. The iPad is going back this week, and I’ll probably sell my current MBP and upgrade when the refresh comes out this summer.
There are two basic choices — laptop or tablet. I think most people are capable of determining which form factor and OS fits their use case best, and from there it’s just a matter of specs (Air vs Pro, MB vs MBP).
The MacBook Air is a dead laptop walking, they bumped the RAM on it this year to keep around a sub $1K option but for all of those people thinking that the Air line has some future along side the new MacBook are simply confused. It’ll be gone in a year.
So what’s the problem?
I know they’re already making efforts to do it (and that this drop is part of it), I just gotta say it: Apple, go private.
No they’re not. Anyone that believes that has no concept of how big Apple is.
Sorry to be so blunt.
I agree, they should go private. their stock is so underpriced, it is comical. In a year or so, they can pay off half of the company with the cash on hand. makes a lot of sense!
A few steps Apple should consider:
1) It is time to replace iOS with Mac OS X. iOS devices now have the power. The longer Apple waits, the more M$ wins.
2) Craig Federeghi needs to chill out or leave. I really miss Scott Forstall. No one uses iOS devices like Craig tells us on stage. He has a 1-way approach that forces one to Android or M$. He walks on stage like Daniel from Karate Kid saying, “Mr. Miyagi, now all your porn pics are on all your devices.” – Extreme example, but there are many examples of taking photos that we do not want uploaded to all our devices, whether a picture of a private note or something for evidence. Let us decide!
3) Apple deserves kudos for the 256 GB iPad. Now, it is time for a 2 TB MacBook Pro and a 256 iPhone. From 2008 to 2011, Apple was the first to offer the most storage while other PC companies played catch up. Now, Apple is behind Dell in offering space.
*Until WiFi is as readily available and cheap as AC power outlets, we need local storage.
4) Let the MacBooks talk to MacBook Pros: Target Disk Mode is such an amazing feature. Let us use it on all Mac devices.
5) iCloud: It is supposed to free up space, not keep a local back up! What the hell is the point then?
6) Remember, the customer. Steve used to email customers all the time. He would read and listen. Apple does not do this anymore. They have taken a very elitist approach. We pay our hard earned money. Listen to us. Acknowledge us.
Just my .02
If apple made os X a platform, That would be the last time I would buy an apple product.
I don’t want “mobile” features on my computer.
What M$$$ is doing is a desperate try to catch up to apple and google, which isn’t working.
Using M$ or M$$$ to represent Microsoft wasn’t even funny ten years ago (because let’s face it, Microsoft aren’t allowed to make any money are they), let alone these days when Apple stole the “in it for the money” crown from them with the launch of the iPhone.
LOL!!! How the HELL is MICROSOFT winning ANYTHING these days?? Are you an employee, or just smokin’ the cheap stuff??
The rest of your blather made even LESS sense and is utterly clueless. Bravo.
It’s so easy to be incredibly rude via the anonymous web, isn’t it?
Really? I hate Microsoft, but Surface Pro 4 is selling very well. If you cannot see the future need of OS X to replace iOS then you are blind are do not read this website much.
And, let me ask you this: Why are customers shunned for asking for more or asking for alternative ways to do things of Apple?
Previous comment was for lin2logger
How does following Microsofts’ model win, when Microsoft isn’t even winning with it? The worst version of iOS paired with the iPAd2 outsold five years ago what the Surface is doing today. MS is doing well on the desktop, true, but that successes is not translating well to mobile. Windows 10 may do well on some hybrid tablet-laptops, but not true tablets or really make much of a difference in PC sales in general which are declining far faster than mac sales are. MS is making some progress in desktop OS sales but what is saving their company is enterprise software.
lol, $40B.
“Bad day at the office, dear?”
How soon until the fools start with “Apple is Toast — Without Steve, Tim is . . . .- Buy Microsoft – Apples swirling in the bowl . . . . Apple hasn’t had a great product since Steve Died”
Everything is cyclical – Look at the profitability of Apple – Look at Apples Cash Reserves. Or, follow the “Death Watch” Lemmings. YMMV
A 20-year comparison of Apple, Microsoft and IBM based on returns from a $1,000 investment made in each company on Jan. 1, 1996:
http://stockchoker.com/stockwatch/?s=AppleMicrosoftIBM
They’ve experienced bigger sell offs. They’ll bounce back.
Btw, both Google and Microsoft lost ~7% after they reported earnings too.
And they’re all still looking down on poor Twitter at the bottom of the pile.
Apple expressly warned everyone about this last quarter. They were running up flags for the last month. Most investors had priced this into the stock. This drop is the result of panicked lemmings that run to where the puck was, not where it’s going. I expect there will be a big bounce within a day or so as the big boys swoop in and grab bargains.
The met their guidance which is far better then most companies do.
than*
And, as a believer – I’m increasing my buy position and adding more to my Apple portfolio. :)
Time to grab a bargain.
The stock market is the worst.
How did it come to this? “We have some great innovations in the pipeline.” Not “products”, just “innovations”.
I had hoped Steve left enough ideas laid out for 10 years but apparently that ended with the iPad.
You can’t go much by after hours and pre market prices. Everyone reported Google passed Apple in market cap, but Google never closed normal trading hours ahead of Apple. Now Apple is down $6 and 5.75%.
Even after record quarters Apple has dropped over 6%. The first decile in year over year for a quarter in 13 years is not as a big deal as it seems. We have it the peak of the smartphone market, the pic markets keeps shrinking and with iPad upgrade cycles it hard to say where its market is at.
What was missed yester is now services make up 12% of Apple’s revenue and is more then the 10% Mac business and 9% from iPad. App Store, Apple Musoc and other services will continue to grow.
Not too worrisome given the current multiple
AAPL
Market Cap: 543.26B
P/E (ttm): 10.43 !!
EPS (ttm): 9.40
GOOG
Market Cap: 480.55B
P/E (ttm): 29.65 !!
EPS (ttm): 23.5
At long last we can return to referring to “Beleaguered Apple”! Hooray! We’ve missed you soon long, beleaguered!
My stocks dropped and losing money by the hour :(
All because Apple fails to maintain a stream of innovation.
It is actually incredible that Apple has managed to maintain such premium prices and sales volumes in the face of the following headwinds:
Slowing economic growth in China
Maturing hardware segments with lengthening replacement cycles
Reduced device subsidies from carriers
Ridiculous bandwidth costs/bottlenecks that make cloud services nearly useless
I would still buy the stock.
Apple’s ecosystem & design advantages are astounding. They don’t have to rely on gimmick features (although they do include some) or even the latest-technologies (displays). This means that even their apparent mistakes can drive higher profits. Many people are likely to upgrade from the relatively ugly and slippery 6/6S design generation (where replacement sales were driven by substantial features like screen size, apple pay, and 2nd generation touch-id) simply because the next generation phone will look better (even if there are no new killer features).
Apple need to do what steve jobs did — they need to stop with all the products — it’s very confusing and half the time there’s little difference…plus they are overcharging…
The fact we have ipad pro plus, ipad pro, ipad air, and ipad mini 2 and 4 — then you have the LTE models, then you have the different colours, then you have the different storage … for ipad you have a choice of 77 — that’s a lot…
Get rid of the mini 2… get rid of the air…and get rid of the 16gb options for mini 4 — you now only have 51 choices.
But i would go one step further – only have 64gb option for ipad mini, and get rid of 32gb for the the pro models — now we only have 34 to choose from… all have great storage, you still have 4 colours to choose, they still have LTE option, and you are not holding on to old tech.
Laptops — we have 4 macbook airs, all with option to upgrade cpu and memory — this is very old tech…GET RID OF THEM!!!
— they still have the old macbook pro 13″ — GET RID OF IT… good gravy that thing is heavy and so old.
— Macbooks (having 2 choices is great — but the price needs to reflect that it has been out awhile now and others can easily compete… plus they
need 2 usb-c…but all in all…they have a good line up)
— Macbook pro… get rid of the 128gb model… reduce the prices…reduce the price gap — a slight speed increase with double the storage does not
warrant a $300 price jump — nor does it tempt me to go for the higher model!!!)
— iMac… get rid of the non-retina iMacs… they are not needed… the tech has been around for awhile now and 4K monitors can do better. (Also the
27″ 3.2ghz iMacs with a 1T SATA is not needed — it took me awhile to work out why there was a $200 price difference with the other 3.2ghz model)
— iphone… why are they still selling the iphone 6 and 6plus??? this tech is now old, and the SE has better specs. Just keep the 6S and 6S plus. (I’m
so glad they didn’t come out with a plastic coloured version of the 5…lol…a 5SEc)… (as for iphone 7 – just have the iphone 7 and the iphone 7pro…
do not have iphone 7, 7plus, and 7 pro)…oh, and no 16gb – this is a huge insult still having 16gb models!!!
— ipod… kill the shuffle… the touch should be available in 3 colours with only 64gb and 128gb…the nano should be 3 colours and only 32gb
— watch… the price is about right, for the sport…kinda… $279.99 for the sport would be more ideal… as for the steel – way off…it costs more than an
ipad, and is more than the cheapest ipad pro – it’s the same as the iphone 6s — this, at most, should be $400 — as for the ‘watch edition’ … this
should be an instore personal experience and one of those things you have to go to the actual store to see — having an online site for it cheapens
the experiences…it should only be at select stores!!!
— Mac mini — starting at $499 with those specs — you’re having a laugh…lol… (the memory is $40, hard drive $40, the graphics is cheap and old, and
the cpu is cheap)… this should start at $299 — or better still, get rid of the $499 model and move the other two models down a price level (so the
$699 will start at $499)
— Apple TV… 32gb is ok… but the 64gb should also have 4K… $50 for an extra 32 gb is a joke considering you can get flash drives and memory
cards for under $10.
Basically, in short, Apple need to be more focus…show clear distinctions between their products…and have realistic pricing — unfortunately other companies have caught up and can offer more or less the same for less — some are also being more innovative and giving you more for your money… Apple no longer feels premium, new, and ahead of the game.
Why buy an ipad mini that has hardly changed since launch, with an OS that has rarely changed and isnt specifically built for the ipad, that has very little extra to offer… i might as well just buy a cheaper android tablet that does more or less the same, with an OS that keeps getting polished and the newer one looks very fresh, and it will do what i need it to — plus save me money…people are now used to tablets and have realised that they dont need top of the range stuff – and for everyday home tasks sometimes cheaper is better…
Apple need to refocus — it also might be time to get rid of the old people — they are the ones holding things back… IVE is one of the main issue with design — we get it, you’ve made your mark, you think it’s perfect, you don’t want to mess with it much… so move along and let someone new come in and push us into the future instead of keeping us in the past!!!
Ah, The Steve Jobs Meme. Well, he certainly wasn’t able to control himself, at one point having 37 models of the iPod.
37 is nothing compared to 77!!!
When taking your point into consideration, 37 equals 77. It really won’t matter to a user who either has a problem with a large offering or not. If 37 isn’t a problem I don’t see why 77 would be any different; that person may even like the finer choosing in products.
And if 77 is too much choice, I’m certain 37 will be as well.
I could not agree more. Too many near identical models. Too many slight variations. Too many to stock. Too many to keep parts for. It’s expensive, and wasteful and confusing. Apple has reached the “Performa” stage all over again. They need someone to go in and clean house.
But no-one will…Apple is too proud to listen to others :-P