US tech darling Apple Inc has just announced its first decline in quarterly revenue in 13 years! Agghhhh!
And net profit fell by 20%, to a mere $10.5 billion.
Is Apple wasting away?
Hang on. This is the world's most valuable company. The darling innovator. Which brought you the iPod, iPad, iPhone and iWatch.
But has the world got enough i-devices? Maybe not, but the competition is intense. Samsung (maker of the Galaxy S7) is now the world's largest smart phone maker.
The fact is that Apple makes its money from selling hardware, mostly iPhones. iPods and iPads are terminal products. iWatch has a cult following in a small market. And as the outlook for rapidly increasing iPhone sales, especially to China, diminishes, so does the company's share-price. It's down 27% from its peak of 22nd May last year.
Apple's share-price has fallen 27% in 12 months
Apple's woes have been exacerbated by one of its champions and largest shareholders, billionaire Carl Icahn, announcing that he had sold his entire Apple holding (worth a mere $4.4 billion). Icahn's worry is, in one word, China.
So, where to now for Apple?
The Apple eco-system is all about integration of high-tech, high-cost, innovative and fashionable hardware. It cannot rely on the upcoming iPhone 7 for its future.
And the Apple gurus know this. Which, W&D predicts, means watch out for the... iCar.