Apple iPhone Orders Cut, Stock Value Falls
Apple lost a percentage of its value on Monday after news was made aware about the company cutting their iPhone orders in half.
Apple's recent order cuts for LCD screens and other needed parts for the popular iPhone can only mean one thing – Apple’s sales are slumping. Many Apple investors are fearful that demand for the iPhone 5 has reached saturation and predictions for its future sales in 2013 might have been more hype than real scientific sales projections. When news of Apple’s cuts hit the news, investors began to sell off shares. In turn this caused their share prices to drop 3.57% to $501.75 (U.S.), which was their lowest mark in nearly a year.
In December 2012, Andy Hargreaves, who serves as an analyst with Pacific Crest Securities, accurately predicted sales of the iPhone dropping in 2013. Hargreaves based his opinion on the fact that there were well over 200 million iPhone users projected by the end of 2012 and to him that meant a saturation point for the product.
“Global consumer demand for iPhone 5 is not as strong as we anticipated,” Hargreaves states in his report. “Although we believe iPhone 5 remains the best-selling high-end smartphone on the market and is likely gaining significant share right now, a combination of market saturation, weak global demand and incremental innovation that has surpassed consumer demand.”
In a global perspective, Apple has been fighting hard to keep up with their chief rival, Samsung. Currently Samsung’s Galaxy S III has overtaken Apple as the world’s most popular and best-selling smartphone. Analysts are also predicting that Samsung will see an increase in smartphone sales by more than a third in 2013. It is also projected that Samsung will sell 290-320 million smartphones in 2013, which is up from an estimated 215 million in 2012.