Apple, despite reporting fat profit of $10.7 billion for its third quarter this year, was unable to meet the growing expectations of investors and wall street resulting in the stock taking a plunge.
The investor favourite stock took a hit recently after it closed at $118.44 from its pre earning all time high of $134.54 in April this year. The 10 percent drop is the lowest apple stock that has been witnessed since January 2015 while breaking its 200 day moving average (A technical metric that indicates when an uptrend is reversing).
Apple Stock Falls in China Despite Huge Profit Globally in its Third Quarter Sale
The stock that makes up the biggest component of stock indexes NASDAQ and S&P 500 (both of which are market cap weighted indexes) is single handedly pulling the entire indexes to the red zone. The iPhone maker is facing pressure because of the economic conditions in China, which is a key market for Apple. High competition in China’s mobile device market and the recent ‘correction’ that China’s stock market is undergoing is causing growing concerns among investors.
Apple has lost its top position in the Chinese market to local manufacturer, Xiaomi which is followed by a resurgent Huawei. The loss of rank was expected however, Apple’s flagship devices the iPhone 6 and 6 plus are now more than 10 months old with the new iPhones to be unveiled in September demand for the current lineup usually declines at this time of the year.
Apple remains optimistic about its position in the Chinese market.
“The rise of the middle class there is continuing and it is transforming China, I think we would be foolish to change our plans”.
Said Tim Cook, the Chief Executive Officer of Apple Inc.
While Tim Cook has succeeded in introducing the Apple Watch, sales remain modest indicating that Apple will have to rely on iPhone sales in order to fuel growth and meet the growing expectations of investors.