Thursday, January 24, 2013

Due to lacking innovation and fatigue, Apple will fall



With the advent of the iPhone and iPad, in the past five years, Apple has been given the crown of the most valuable investment company, but this is coming to the end. Apple's first-quarter profit flat, more than $ 50 billion in market value vanished, Hewlett-Packard and Dell, two companies combined market capitalization of only equal to 50 billion. Similar products is increasing, declining profit margins. CEO Cook need a real innovation to get rid of this "Heart Queen Race".

A series of product updates, upgrades are helping Apple competing with Samsung Electronics , but such help is not unlimited. Apple's first-quarter revenue growth of 18% over the same period last year, the season has sold nearly 48 million iPhone and 23 million iPad. Unfortunately, the net income did not keep pace with. The iPad mini earned more demand, but not earn the same as the larger screen of the iPad. iPhone 5 has also attracted a large number of customers, it is proved Apple paid high production cost of the phone. Apple's operating margin fell by nearly six percentage points, to 31.6%.

While Apple run faster and faster, but essentially just not regress. Of course, more danger is that Apple pace can not keep up the speed of the treadmill, so competitors will catch up. Also maybe an apple turnovers, indeed a useless product, also introduced in addition to the map application software (app) do not fly, investors apparently in preparation for this case. 2012 profit fell 10% late Wednesday, Apple earnings ratio of about 10 times. The company's $ 137 billion cash and investment can provide a good support to any form of decline. These total equivalent to nearly one-third of its market value.

However, our expectations to Apple, are not from the payment of a dividend, repo shares or launch another low price iPhone, but Apple should do as it once did best: do not follow the crowd. Apple's extraordinary growth stems from its launch of the electronic equipment people do not even know that they would want. Paid TV, or some other secret products, Apple really need some refuel.

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