Apple Appears To Be In Deep, Deep Trouble… So, What’s Really Going On?

Apple Appears To Be In Deep, Deep Trouble… So, What’s Really Going On?

As many of our readers may already know, Apple is in a boatload of financial trouble right now— with the company recently witnessing a ten percent drop in its stock value within the span of a just 24 hours.

Additionally, it is also worth pointing out that Apple is not the only major company to be experiencing severe economic pressure at the moment, since it has just come to light that Samsung (S. Korea’s largest conglomerate) too is struggling with record low sales this past quarter. This is primarily because a large number of smartphone users no longer feel the need to replace their old phones with newer models (since very little seems to be added to newer iterations in terms of their overall functionality and operability).

An In-Depth Look At The Matter

As can be seen from the chart below, Apple’s stock took a massive beating yesterday— with the company’s shares witnessing a 10 percent haircut within the span of less than an hour.

apple share sell-off

Also, it should be remembered that a couple of days back, Tim Cook, the company’s CEO wrote a letter to Apple investors stating that the firm’s “projected revenue” for the coming quarter would be substantially lower than initially expected.

“Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance. While it will be a number of weeks before we complete and report our final results, we wanted to get some preliminary information to you now. Our final results may differ somewhat from these preliminary estimates.”

What’s Causing All This Mayhem?

While a single issue cannot be blamed for this insane plunge, many experts believe that the ongoing trade war between the US and China could have caused a decline in the demand for Apple manufactured products across Asia and America. Not only that, the entry of brands such as Huawei, Redmi also seems to have slowly eaten away at Apple’s target audience over the past couple of years.

On the matter, Cook was quoted as saying:

“China’s economy began to slow in the second half of 2018. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years. We believe the economic environment in China has been further impacted by rising trade tensions with the United States.”

Apple On The Brink Of Total Collapse?

According to columnist Casey Newton, Apple’s failure to deliver anything substantial through its recent offerings has played a massive role in the company’s perceived value slipping over the past 8-12 months.

On the matter, Newton was quoted as saying:

“This was the first year in five that I didn’t upgrade my iPhone. Two reasons: – iPhone X was really, really good, and battery life is still great – The 2018 models were functionally identical to the iPhone X”.

Add to all this the fact that Norway’s “Oil Fund,” (Government Pension Fund Global – GPFG) has over $1 trillion invested in the tech company, just makes matters all the more skewed (especially since there are many international players counting on Apple’s continued market success) .

For those not aware, the CPFG is the world’s largest sovereign wealth fund that was formed all the way back in 1967 (as a means of investing Norway’s surplus revenue from its oil and petroleum sales).

Final Take

In closing, it is worth pointing out that the CPFG currently owns a whopping 2.33% of all European stocks and if market projections are to be believed, the fund could be on its way to achieving a value of $3.3 trillion by 2030. However, with Apple facing such a reversal in its fortunes, it now remains to be seen what the future has in store for CPFG.

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