Apple's valuation has tumbled by nearly 20% from its $1tn (£770bn) peak in October, driven by concerns over slowing iPhone sales. The company, once the world's most valuable, now sits at around $900bn, as key suppliers issue profit warnings and the global smartphone market enters a fourth consecutive quarter of decline.
The slowdown stems from a saturated market: fewer first-time buyers, reduced switching from Android, and longer replacement cycles. In response, Apple raised prices, notably with the £999 iPhone X, which temporarily boosted average selling prices (ASPs) and revived valuation growth. However, higher ASPs have not translated into higher profit margins, according to analysis by TechInsights and The Information.
Adding to investor unease, Apple announced it would stop reporting unit sales figures for individual product lines, a move critics say masks underlying weakness. Research director Avi Greengart of GlobalData noted that while Apple wants investors to focus on long-term services and platform strength, the abrupt disclosure change was poorly received.
Apple's strategy to offset stagnant sales with higher-priced iPhones and ancillary products like the Apple Watch and AirPods is now under strain. Supplier Lumentum cut $70m from revenue forecasts due to reduced orders from a major client—widely believed to be Apple—while Japan Display and IQE also cited similar reductions.
Market analyst Linda Sui of Strategy Analytics confirmed that global smartphone shipments fell 8% year-on-year in Q3 2018, describing the market as 'effectively in a recession.' Apple's challenges reflect broader industry woes, though it remains a $900bn company.
