Apple have announced record profits in the last quarter of 2012 with the company reporting revenues of $54.5 billion and a record net profit of $13.1 billion.
The record revenues are due to amazing sales of both the iPhone and iPad with the former selling 47.8 million iPhones in the quarter which is up from 37 million the same time last year. While, Apple sold 22.9 million iPads in the quarter which compares to 15.4 million a year ago.
However, the market hasn't responded favourable to Apple's news because their shares fell 10 per cent after the announcement. Apple's stocks have been slowly dropping in recent months and are now down 34 per cent compared to their highest point in September.
Why has Apple's share price fallen ?
You might wonder why Apple's share price has fallen in response to the company unveiling record net profits and revenues. Well, there are a number of valid reasons why investors have responded negatively to Apple's news.
Firstly, Apple's profit margin is down 6.1 per cent based on the same time last year. This has to concern investors especially as Apple have always had one of the best profits margins in the electronics world.
Additionally, sales of Apple's iPod and Macs have fallen based on the same time last year which isn't insignificant. While, investors continue to be concerned as to whether Apple can continue to produce products that can captivate consumers especially without the influence of Steve Jobs.
The competition is also raising its game with Samsung becoming the world's best selling mobile manufacturer in the last year. Nokia are also showing signs of a revival, while Google's entrance into the hardware market is also a major threat to Apple's future success.
What can Apple do to reassure investors ?
The main thing Apple can do to impress investors is to ensure that their next products captivate consumers. In the next year Apple will be unveiling a new iPhone, iPad and iPod models all of which are key to their future success.
The main doubt investors have at the moment is whether Apple can continue to innovate and find new markets without Steve Jobs at the helm. As soon as they prove they can their share price is sure to rocket once more !
By Simon Thomas on 25th January, 2013