2018 wasn’t a great year for Apple; with the tech company admitting their iPhones have major camera problems and their iOS update disrupting mobile data services in December, I bet they thought things couldn’t get much worse.
Well, it turns out they can. In fact, they can get much, much worse because since October – when Apple was the most valuable company in the world – the value of the tech giant has plummeted by a massive $450 billion.
To put that into perspective, that loss is significantly more than the entire value of Facebook, and means that Apple has lost its position as third most valuable company in the world.
As reported by Business Insider, Apple hit a peak of $232.07 a share at the beginning of October after a 52-week high, giving it a market cap of $1.16 trillion.
However, the company’s share price fell by 9.96 per cent on January 3 following a shock readjustment of its revenue forecast. This means its market cap now stands at $710.97 billion.
You still following? In more basic terms, this giant loss, as well as being worth more than the whole of Facebook, is also more than the GDP of countries including Iran, Austria, and Norway.
And according to CNBC, the value is also larger than that of financial services company Wells Fargo ($224 billion), fast food giant McDonald’s ($137 billion), and wholesalers Costco ($90 billion). Eek.
Although unexpected, Apple did give a sudden warning to investors on Wednesday afternoon (January 2), via a letter from CEO Tim Cook, saying their revenue will be lower than their original guidance for the quarter.
The letter pointed to emerging market challenges as one reason behind the reduced revenue guidance, in addition to lower than anticipated iPhone revenue – particularly in Greater China.
The letter explained:
While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad…
Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline.
However, as reported by CNBC, major Wall Street analysts were unimpressed with Apple’s explanation and said the announcement ‘raises more questions than answers’.
Both financial groups Jefferies and Macquarie downgraded the stock to a neutral rating, with Jefferies saying in a note to investors:
Biggest miss in years. Apple’s business in China appears to be rapidly deteriorating.
While Macquarie said:
The bottom line is that we are late (obviously), but we can no longer recommend Apple.
The Apple CEO remained adamant the company is doing everything they can to improve their results, stating that ‘Apple’s strength is in our resilience’.
Cook ended the letter by saying:
Expectations are high for Apple because they should be. We are committed to exceeding those expectations every day. That has always been the Apple way, and it always will be.
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A Broadcast Journalism Masters graduate who went on to achieve an NCTJ level 3 Diploma in Journalism, Lucy has done stints at ITV, BBC Inside Out and Key 103. While working as a journalist for UNILAD, Lucy has reported on breaking news stories while also writing features about mental health, cervical screening awareness, and Little Mix (who she is unapologetically obsessed with).