Apple shares have continued to slide since last Thursday, losing $200 billion in market value

According to Apple’s third quarter report for fiscal year 2023 released on August 3, local time, total revenue for the quarter was US$81.8 billion, down 1.4% from the same period last year and nearly 14% from the previous quarter. This is also the first time since 2016 that Apple has experienced three consecutive quarters of year-over-year revenue declines. Quarterly performance expectations are also not optimistic, with both gross profit margin and revenue growth expected to slow down. These news triggered market concerns about Apple's prospects, causing its stock price to fall by nearly 10% since last Thursday, and its market value to evaporate by more than 200 billion U.S. dollars (Note from this site: currently about 1.44 trillion yuan)

. Apple shares continued their plunge today, falling 1.7%.

Analysts believe that there are three main reasons why Apple has suffered a huge blow One is the decline in revenue.

The iPhone is Apple’s most important product, accounting for nearly 50% of its total revenue. However, in the June quarter, iPhone revenue fell 2.4% year over year to $39.7 billion. While Apple has grown in its services business, such as the App Store, iCloud, Apple Music, Apple TV, and Apple Pay, revenue from these businesses still cannot make up for the iPhone shortfall. Additionally, Mac revenue fell 7.3% to $6.8 billion in the quarter, and iPad revenue plunged 19.8% to $5.8 billion.

The second is weak performance guidance.

Apple’s guidance for the September quarter is also pessimistic, with gross margin expected to be between 44% and 45% and revenue growth to be flat or slightly lower than last year. While iPhone and Services revenue may be growing slightly, Apple Chief Financial Officer Luca Maestri said Mac and iPad revenue will continue to decline.

Third, the valuation is too high. Despite three consecutive quarters of revenue declines, Apple's stock price rose 51% in the first half of this year, giving it a price-to-earnings ratio of 33 times. Even after its recent share price decline, Apple still trades at a price-to-earnings ratio of 30 times. By comparison, the S&P 500 trades at about 20 times earnings. Some analysts believe that Apple's valuation is too rich and does not reflect the macroeconomic environment and competitive pressures it faces.

Wall Street analysts have different views on Apple's future. Some analysts who are bullish on Apple believe that although the decline in iPhone sales is temporary, it does not mean a decrease in demand. They highlighted that iPhone revenue actually increased 1.4% year-over-year after currency adjustments were taken into account. In addition, they also pointed out that Apple still has huge growth potential in overseas markets, especially emerging markets such as China and India. They predict that the launch of the new iPhone 15 will trigger a wave of demand explosion in a "mini super cycle"Some cautious analysts believe that it will be difficult for Apple to get rid of its dependence on the iPhone, and at the same time it is also facing the challenges of smartphones There are multiple challenges such as slowing market growth, intensifying competition and increasing regulatory risks

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