Apple Inc. (NASDAQ:AAPL) stock recorded a new three month low of $591 (at at the time of this writing), after opening at $594 per share, the first time the company has traded below the $600 mark in over two months. This came in the aftermath of CEO Tim Cook’s management shake up, with investors remaining skeptical of the current leadership outlook for the world’s most valuable company, by market cap.
Indeed, Apple Inc. (NASDAQ:AAPL) is probably one of the companies that benefited from the scourges of Hurricane Sandy over the last two days. Tim Cook announced the changes at the top of Monday, meaning, things could have been worse today, had the markets opened yesterday.
The company looks to stump authority in the retail business, an area where it seems to be struggling against its rivals. The iPhone maker recently launched multiple product updates, including an unexpected new iPad lineup, to replace iPad 3, barely seven months after launching the device. Additionally, Apple Inc. (NASDAQ:AAPL) also provided a weaker outlook for the December quarter, further raising questions over the company’s ability to deliver according to expectations, as gross margins sank.
In an effort to better things, or at least, that is what many perceive it to be, Tim Cook overhauled the management team, in what some believe to be the team to lead the company’s battle in the smartphone and tablet retail business. Apple’s products are predominantly priced at a premium, as compared to peers in the market, albeit near similar specification, or worse still, with lower specs.
Today’s trading session is the first, since Apple Inc. (NASDAQ:AAPL)’s CEO, Tim Cook, announced the imminent departure of mobile software head Scott Forstall and retail leader John Browett. Forstall will act as an advisor to Cook in the interim, while Apple is reportedly in search of a replacement for John Browett. Meanwhile, the retail team will be reporting to Cook in the interim.
The beneficiaries of these departures include Johnny Ives, who now heads the Human Interface and Design departments, while Graig Feraghi will head both iOS and OS X. Jefferies’ equity analyst, Peter Misek, CFA, CPA, sees this as a positive step, citing the imminent merger of the two units.
On the other hand, Eddy Cue is taking over Siri and Maps, after being promoted up from his previous responsibility in the iTunes Store and App Store. The other beneficiary is Bob Mansfield, who has been appointed to lead a new “Technologies” group, which is expected to form strategies on vertical integration, and managing all the hardware components of Apple Inc. (NASDAQ:AAPL) products.
Tim Cook is ideally fashioning his own kind of leadership team, as well as new strategies, while moving away from what he inherited last year. The current business atmosphere has driven Apple Inc. (NASDAQ:AAPL) to the limit, with the company losing a significant market share in the smart devices platform to Google Inc (NASDAQ:GOOG)’s Android O.S., the main rival, with a whopping 67 percent market share, as compared to Apple’s 18 percent.
Additionally, Samsung has taken the lead in the smartphone business, in terms of units shipped, as per Q3 results, while the tablet business is facing an encroachment of sorts, from the likes of Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle Fire and Kindle Fire HD, Google’s Nexus 7, with the Nexus 10 set to ship two weeks from today, as well as Microsoft Corporation (NASDAQ:MSFT)’s Surface tablets, among others.
Finally, the PC industry is facing a slowdown, due to cannibalization by tablet business. I am not a prophet of doom, but Cook is facing a stern challenge, and I doubt if the management overhaul will make a difference to the betterment of the situation.