NEW YORK: Apple shares extended their losses on Friday, ending a miserable week for the California tech giant as it surrendered its position as the world’s biggest company based on market value.
Apple ended down 2.36 percent at $439.88, giving it a market capitalisation of $413bn, while oil giant ExxonMobil rose 0.36 percent to $91.68 with a market cap of $418bn to edge into first place.
Apple first overtook ExxonMobil in August 2011 as the most valuable company in the world based on the value of its stock. A year later, Apple dethroned longtime rival Microsoft as the most valuable company in history based on the value of its stock at $622bn.
But the company took a bruising this week after a gloomy forecast accompanying its record quarterly profit announcement prompted pessimism over the tech giant’s slowing growth trajectory. Apple’s profit was $13.1bn on revenues of $54.5bn in the fiscal quarter that ended on December 29, with sales of iPhones and iPads setting quarterly highs.
But despite those figures, investors soured on Apple after it forecast that revenue for the current quarter would range from $41bn-$43bn and that it would have a gross margin of 37.5 to 39.5 percent, lower than expectations. Analysts remained cautious about Apple, which had seen a meteoric rise last September to over $700 a share but slid 37 percent since then. The company shed some $60bn on Thursday and around $10bn more Friday.
Some express concern that Apple has lost its edge in innovation since the death of co-founder Steve Jobs, and is losing ground to rivals such as Samsung, which leads the mobile phone market, and to others using Google’s Android operating system.
Jinho Cho at Mirae Asset Securities said Apple will likely increase carrier subsidies in 2013 and launch an “entry-level” iPhone to compete better in emerging markets.
“These moves by Apple should lead to stiffer competition for greater carrier subsidies among smartphone makers, thus driving down handset industry-wide operating margins,” the analyst said.
Getting into smartphone price wars would break from Apple’s long tradition of premium products aimed at the high end of the market and bite into profit made from each device sold.
AFP
