Apple: Outlook after the largest monthly decline

On September 7th, Apple fell 3.6% on the New York Stock Exchange, with its market value falling to $182.91 per share, marking its largest decline since August 4th. Apple's latest market value is $2.9 trillion, and it has evaporated $106.2 billion (approximately 777.1 billion yuan) overnight. As the dominant player in the global mobile phone market, we are now facing a significant decline in market value. What is the reason behind this?

The increase in financial risks. Industry insiders analyzed that the interest rate increase cycle of the Federal Reserve may not be over yet. The yield of US treasury bond bonds continued to rise this Wednesday, putting more and more pressure on risky assets. Raising interest rates will have an impact on investment in technology companies, and higher interest rates mean a lower present value of future returns, which may undermine investors' confidence in long-term investment projects, including investments in technology companies. In addition, higher interest rates may also increase capital costs, putting pressure on the operations of technology companies. Therefore, technology stocks such as Nvidia, Tesla, and Apple have generally declined due to the expected interest rate hike from the Federal Reserve.

Publication of regulatory laws. On Wednesday, the European Union announced the Digital Markets Act, which is considered one of the strictest digital regulatory laws in history, listing Apple as a technology giant in an absolute monopoly position. This bill stipulates that Apple shall not use its dominant market position to suppress or acquire competitors, otherwise it will face huge fines. This news has largely raised concerns among investors about Apple's future.

Lack of innovation ability. Since the release of the first iPhone product, Apple has almost dominated the entire smartphone market with its strong innovation and influence. However, in recent years, Apple has shown weakness in product innovation. In contrast, the innovative products such as foldable screens and lift cameras launched by competitors have limited the appeal of Apple's iPhone series. The strategy of continuously high prices and low innovation has significantly affected consumers' purchasing enthusiasm, resulting in a continuous decline in Apple's sales and market share.

The intensification of market competition. Some industry professionals and media believe that the reason for Apple's stock price decline may also be related to the strong rise of its competitor Huawei. Although Huawei has not yet gone public, its performance in the global market is becoming increasingly strong, and its market value may reach trillions within a few years. In recent years, especially since being blocked by sanctions from the United States and the West, Huawei has invested in innovation at all costs, continuously conducted new technology research and development, and launched a series of leading products in the same industry, which has attracted widespread attention and competition from consumers to purchase. This may lead to insufficient confidence in the future development of Apple among investors.

It is reported that Apple plans to hold an iPhone 15 product launch event on September 12th. Normally, Apple's stock price will rise before the new product launch. However, senior hedge fund founder and portfolio manager Daniel Niels believes that given the significant breakthrough made by Chinese technology company Huawei in the 7nm processor node technology of its new Mate60 Pro smartphone, he plans to short Apple before and after the release of iPhone 15. Niels advised investors to buy Apple stock on August 18th, and the stock did indeed rise by 9%, surpassing the 3% increase in the S&P 500 index over the same period.

On the surface, Apple still has unlimited potential, its sales data is still very impressive, its profits are still very considerable, and its market value is even several times higher than in the era of Steve Jobs. It became the first member to enter the trillion dollar club, and it is difficult for similar companies to shake its position for the time being. However, considering the current situation and market trends, Apple needs to further increase its investment in product innovation and launch more competitive products in order to maintain its advantage. At the same time, strengthen cooperation with the supply chain, continuously reduce its costs, and improve product reliability. We also need to pay attention to market changes and consumer needs, launch products and services that cater to local consumer tastes in different regions, and continuously increase their market share.