Apple faces a crucial test today as the company faces pressure to show growth and product innovation during their second quarter earnings call as investors have become increasingly more nervous and pessimistic about the growth prospects for this once invincible tech innovator that set the standard for innovation and style.
Last Friday Apple’s stock closed at a 52-week low of $390 after Apple investors reacted negatively to a disappointing forecast from a key U.S. supplier to Apple.
Chipmaker Cirrus Logic announced disappointing quarterly revenues last Tuesday and warned of lowered forecasts from one key customer that was widely believed to be Apple.
The announcement sent shock-waves to other suppliers and rekindled fears about slowing demand for the iPhone and iPad.
Apple’s share price declined 8 percent between last Wednesday and Thursday.
Yesterday LG Display reported a weaker than expected profit because lower demand for iPhones and iPads have hurt sales of its LCD screens.
Apple is expected to have sold 35 million iPhones and 17 million to 18 million iPads in the second quarter of 2013 compared with 47.8 million iPhones and 22.9 million iPads sold in 1st quarter of 2013.
Apple shares reached an all time high of $705 last September following the release of the iPhone 5 but its shares have since declined 42 percent.
Apple shares are also down nearly 13 percent a day after its disappointing first quarter earnings on January 23rd, a challenging day for the company when it announced its slowest growth rates in years. (Read more about the first quarter report posted in January on Schweitzfinance
Approximately 20 analysts lowered their price targets for Apple and predicted that the era of exceptional growth may be over for Apple.
Apple offered guidance for their second-quarter sales in the range of $41 billion to $43 billion which represents the slowest rate of growth since 2009.
Still Apple is sitting on a cash pile of $137 billion which means that it is highly unlikely that Apple will just fade away and become irrelevant in the tech sector.
Apple is believed to be working on a new iwatch. Rumors are swirling that a future iwatch may run on the full version of iOS and have a curved glass screen.
Samsung and Microsoft are also believed to be working on connected wristwatches. So expect some competition for Apple in this new sector.
Apple is expected to release a iPhone 5 S sometime this year with a larger five inch screen. Most rumors are predicting a 2013 Apple iTV release date.
Despite these new Apple developments it has become more noticeable in the tech industry that Apple does not have any new game changing innovative products out right now like Google glasses or anything else remotely similar that separates itself from its competitors and make big waves in the tech industry.
Samsung is already producing innovative smart-phones that are gaining widespread popularity, allowing the Korean company to expand its global market share over Apple while other companies like Pandora and Amazon are slowly eating away at the margins of Apple’s iTunes.
Pre-orders of the new Samsung Galaxy S 4 have already begun this week at AT&T.
Many Apple investors would like to see Apple put the $137 billion to work rather then witness the company’s sales decline further while becoming the target in Samsung’s commercials which poke fun at Apple for being unhip in the same way that Apple’s ads once mocked Microsoft during the “PC versus Mac” showdown that helped to change attitudes about Apple.