Apple Inc May Lose Market Cap Lead to Exxon as Pressure Builds to Release Innovative Products
After Apple Inc investors expressed disappointment over lower than expected iPhone sales last holiday quarter, a 10 per cent sell off in Apple's stocks could happen which will reset earnings back for Exxon Mobil to even surpass the company in market value.
Apple Inc's market cap was at $550 billion before a drop is predicted to happen. A drop of 10 per cent will push shares to just below the critical $500 billion mark at $495 million. Under this scenario, Apple's value will fall to $445 billion. In 2012, investors were disappointed with Apple's "enhanced" products which lacked innovation the company was known for. The stock fell from $700 in late 2012 to only $440 in Jan 2013.
In contrast, Exxon Mobil's share price has been stable in 2013 and rose from $85 to its current level of $95 per share. In late 2013, Exxon stocks reached $100 which brought its market cap up to $441 billion. According to analysts, Exxon will only need to achieve that level to match Apple's downfall if share price history will repeat itself. Analysts believe that if Apple stocks will drop any further, it may only be a matter of time before Exxon will catch up.
Investors growing anxious
Apple may be feeling the pressure of releasing trend-setting products as it slowly loses ground to rivals offering smartphones with bigger screens and lower prices than the iPhone.
Apple's guidance for the current quarter has already disappointed investors since it will be the first time the company's revenue will fall in more than a decade. Investors are worried that Apple is losing its vision since co-founder and former CEO Steve Jobs passed away.
Apple Inc shares fell 7.2 per cent in trading on Jan 28 after investors were disappointed with iPhone sales for Q1 FY 2014 despite record-breaking figures for the tech giant. The stock price slightly dipped followingCarl Icahn's tweet about buying another $500 million Apple shares.
The company has not released an innovative product since the iPad and investors want a new product to bring Apple's stocks back up. Apple investors continue to wait for the next "catalyst" product to be released hopefully within the year with the long-rumoured iWatch and a new iPhone with a bigger screen.