Apple investors worry for iPhone’s future but remain hopeful for holiday turnout

Apple's fourth quarter results appeared rosy as the company reached a new record at US$51.5 billion (AU$72.17) in revenue. Apple also posted a quarterly net profit of US$1.96 (AU$2.75) per diluted share. The iPhone remained a major force in driving fourth quarter results, but even with the current results, analysts and investors alike worry about the company's future prospects including in markets like China.

Investors are more concerned than impressed with Apple's recent sales figures. Although revenue topped the previous year with a 22 percent increase, stock price movement did not deliver. The company's share price only posted 1.5 percent gain following an initial dip hours after trading. Nonetheless, Tim Cook, Apple's chief executive officer, remained optimistic.

“Fiscal 2015 was Apple’s most successful year ever, with revenue growing 28 percent to nearly $234 billion. This continued success is the result of our commitment to making the best, most innovative products on earth, and it’s a testament to the tremendous execution by our teams,” he said in a statement.

“We are heading into the holidays with our strongest product lineup yet, including iPhone 6s and iPhone 6s Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV which begins shipping this week.”

Reuters' Robert Cyran shares that reliance on one product worries investors more in spite of the gains and big market capitalisiation of companies like Apple.

According to him, "If the companies can’t find new hits, there’s potential reason to worry. Nearly everyone who can afford a smartphone has one. If innovation slows, devices could become low-margin commodities. Harvoni’s sales may have already reached a plateau – and eventually demand may fall if its patients are cured."

Apple's future in China also remains sceptical as even dominant players like Xiaomi lost its position recently to another competitor, Huawei. According to Forbes, Apple has a tricky job reaching and managing expectations. The company's iPhone sales for the quarter were lower than Wall Street's expectations. Sanford Bernstein analyst Toni Sacconaghi thinks that Apple is already past its heady growth. The company may enter a "growth purgatory." Still, the holidays can be a saving grace although that won't happen until the end of the year.

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