Apple Stock News: Apple Inc. Becoming Blue Chip Firm Though Shares Down In The Short Run

Apple Stock News

For the latest Apple Stock News, AAPL closed at $112.71 on Friday, September 23rd, 2016, with 1.67% loss, or $1.19 from Apple’s previous closing $114.62.

Although AAPL shares are up more than 10% since the beginning of 2016, they are experiencing a slight overall downward trend during the past week. During this dip in share price, money managers and other funds with strong conviction have been buying up AAPL shares.

The reason for the recent loss is two-pronged. On Friday, September 23rd, the Japanese government had revealed that new evidence surrounding antitrust allegations may cause them to take action against Apple Inc. Apple is accused of holding a demand-side monopoly over smartphone sales in Japan. The reason is because they have been refusing to sell their iPhones at a discount (for bulk orders) to smaller third-party retailers in Japan while offering a ‘real’ discount to large ones and major Japanese carriers. Thus, allowing themselves to take a much larger market share over sales, as most people would buy smartphones would do so from the Japanese carriers themselves. Therefore, it has allowed Apple inc. to take control of 50% of the smartphone market share in Japan today. While Apple sales have been experiencing a slump over the past couple of quarters, Apple has been able to rely on Japan as a major growth opportunity and high sales volume. Therefore, if an action is taken it can drastically hurt iPhone sales in Asia for the next earnings announcement. In addition to iPhone sales potentially being hurt in Asia, recent reports have shown that initial iPhone 7 sales have been down in comparison to the iPhone 6S launch, by 25%.

Apple Stock News

Although this may seem like negative news to many investors and fund managers such Nordea’s fund manager Naess has a positive long-term outlook and is buying shares during this time. He has explained that Apple has essentially finished its high growth period, which many investors are still continuing to expect from Apple Inc. As a result, they have become more of a ‘blue chip’, and a safer investment when the stock price is not overly inflated. This can especially be seen as competition is on the rise in the smartphone sector, and Apple Inc. is saturating the market, thus diminishing future growth opportunity.  However, after their growth will decline, they will likely be to retain their huge global market share, as a result of their premium brand equity around the world. Thus, similar to companies like Procter & Gamble and other known ‘blue chip’ stocks, Apple Inc. may be on the path to becoming a great addition to one’s retirement portfolio or simply a less risky investment opportunity.

Keep checking back for more news regarding AAPL. For Full AAPL forecasts and investment advice by our state of the art algorithm click here.

Comments are closed.