Apple Inc. (NASDAQ:AAPL) shares have declined 5.4% this year so far. Its 2014 story is likely to revolve around the iPhones and newer products. But most of its upcoming products are designed to make the iPhone and iPad more useful. So, there is a distinct possibility that the tech giant may fail to impress investors, who are eagerly waiting for a revolutionary new product, says Ansuya Harjani of CNBC.
Barclays analyst Ben Reitzes recently said in a research note that Wall Street is excited about some products in the pipeline such as geo-location, wearable devices, an improved Apple TV and mobile payments. But nothing, including the TV with motion sensors, seems to be as revolutionary as the iPhone or iPad. Apple Inc. (NASDAQ:AAPL) launched CarPlay earlier this week, which will allow drivers to integrate the car entertainment system with their iPhone. Though it’s a good move, it’s not sufficient to re-accelerate the iPhone sales growth to sustainable levels.
Corsair Capital, the event-driven long-short equity hedge fund, gained 6.6% net during the second quarter, bringing its year-to-date performance to 17.5%. Q2 2021 hedge fund letters, conferences and more According to a copy of the hedge fund's second-quarter letter to investors, a copy of which of ValueWalk has been able to review, the largest contributor Read More
June quarter could be tough for Apple
Sizemore Capital Management chief Charles Sizemore says that the newer products like CarPlay are interesting. But, in reality, they are just new apps for the existing iPhone. The same holds true for the highly-anticipated iWatch. These initiatives could help Apple Inc. (NASDAQ:AAPL), but are unlikely to make a huge impact on sales. The next iteration of the iPhone is unlikely to be released before September this year. That’s why Barclays believes that June quarter could be a really tough one for the tech giant.
Meanwhile, Apple Inc. (NASDAQ:AAPL) rivals continue to release new products, which may prompt consumers to shift away from Apple in the near term. The iPhone 6 is anticipated to have a faster processor, a bigger screen and a more durable glass. But the incremental improvements are unlikely to energize customers like the original iPhone did. Moreover, as the Cupertino-based company adds advanced new features to its devices at a similar price point, its margins are likely to suffer. Apple’s smartphone and tablet market share has been contracting since late 2012. According to IDC, the company had only 15.3% smartphone market share in 2013, compared to 31.3% for Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).
Apple needs to get better at web services
Charles Sizemore says that Apple Inc. (NASDAQ:AAPL) stock is widely owned. There aren’t enough new buyers to push up the stock sharply. The stock is trading at a massive discount to the S&P 500, and expectations are low. But Sizemore says that the tech giant seems to have lost its ‘wow’ factor. As far as long-term prospects are concerned, Barclays analyst says that the next era of technology will belong to those companies with a dominant position in web services. And devices are likely to lose their importance in coming years. Apple has been the leader in hardware development. But Google Inc (NASDAQ:GOOG) has build solid Internet services such as messaging, email, online maps and cloud. Apple needs to get better at web services because these services are important to keep the ecosystem ahead of others.
Apple Inc. (NASDAQ:AAPL) shares slid 0.09% to $530.25 in pre-market trading Friday.