Seeds: Apple is known as the world leader in technology in terms of total assets (anything that the company owns that is of monetary value or could be, everything from physical cash, to inventory, to copyrights and trademarks) and revenue. They have a market cap of $741.8 billion dollars (this is calculated by multiply their number of shares times what each share is worth), and was the first American company to surpass a market cap of $700 billion. Essentially, Apple is really, really successful.
Core: However, Apple stated they experienced a 13% drop in revenue in its second fiscal quarter (three month periods where businesses report on their earnings), specifically because iPhone sales have dropped. This marks the first quarterly sales drop the company has experienced since 2003.
Skin: China was Apple’s greatest source of revenue after the United States, but sales in China have declined, dropping 26% compared to the same quarter last year. On top of that, China has shut down the use of Apple’s ebook and digital movie services. It appears that Apple can longer rely on China as a predictable buyer, and many are saying that this is contributing to Apple’s drop in revenue, especially since China’s economy is currently struggling.
Leaves: More than ⅔ of Apple’s revenue comes from iPhone sales. Since the sales of the iphone are dropping, some worry what this quarterly drop will mean for the company. While it is still worth billions of dollars, could this quarterly drop mark the beginning of a downward spiral as the iPhone loses hype? Or will the company pick itself back up again by enticing its customers with new, innovative technology like it is famous for doing?
Food For Thought: Do you think that Apple’s revenue will continue to decline? Or do you think that when they release a new product it will increase once again? Or do you think Apple’s “golden age” is over?