Apple’s Slide Topples Last Stock in $2 Trillion Club

A steady slide in Apple Inc. shares pushed the iPhone maker’s market value below $2 trillion, the latest casualty in the tech stock rout.

| Updated on: Jan 04 2023, 07:23 IST
Apple Event 2022: iPhone 14, Watch Series 8, AirPods Pro - what to expect at Far Out
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1/5 The iPhone 14 series is just weeks away and leaks suggest that there will be four models - the iPhone 14, iPhone 14 Max or Plus, iPhone 14 Pro, and the iPhone 14 Pro Max. (FrontPageTech)
iPhone 15 production
2/5 But the star of the show will be the Pro version and the specs-boosted iPhone 14 Pro Max, which are expected to carry exciting and major upgrades. The new A16 Bionic chipset, 48MP primary camera, an always-on display feature, new notch-less design, and much more. (iUpdate / YouTube)
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3/5 It is not just the iPhone 14, but the new Apple Watch series too which is expected to be unveiled with three new models: the Apple Watch Series 8; a refreshed Apple Watch SE, and a new rugged “Pro” model of the series aimed for athletes. (Amritanshu / HT Tech)
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4/5 Will there be a new Airpods Pro? Some leaks say so. We haven't seen an updated version since their initial launch in 2019, and this year, Apple may finally introduce a new AirPods Pro 2 with some notable upgrades in the charging case, Apple Lossless Audio Codec (ALAC), and more. (HT Tech)
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5/5 We all have seen the preview of the latest iOS 16 in September. Now, Apple may finally announce the stable version of iOS 16 for all eligible iPhone users along with the release of iPhone 14. In addition to iOS 16, Apple could also release watchOS 9, but iPad users may have to wait a little longer for the iPadOS 16. (Amritanshu / HT Tech)
iPhone 15 production
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Apple stocks fell as much as 4.2% on Tuesday ending its reign as the last company to have a $2 trillion valuation (AFP)

A steady slide in Apple Inc. shares pushed the iPhone maker's market value below $2 trillion, the latest casualty in the tech stock rout.

Apple fell as much as 4.2% on Tuesday as concerns about iPhone supply in the important holiday quarter mount and investors lose faith in a reprieve from higher interest rates. The slump sent Apple's market value to $1.98 trillion, ending its reign as the last company to sport a $2 trillion valuation after Microsoft Corp. and oil giant Saudi Aramco retreated in 2022.

The milestone marks a fall from grace for Apple. The stock spent much of the past year outperforming the S&P 500 Index but has stumbled in recent weeks amid fears that iPhone production problems in China will ruin holiday sales, the company's most important period.

Exactly a year ago, Apple's shares briefly rallied to climb above $3 trillion in market value as the S&P 500 hit a record high.

The four largest US technology companies have lost more than $3 trillion in market value in 2022 amid soaring inflation and slowing sales growth that surged during the Covid-19 pandemic. December was Apple's worst month since May 2019 with a decline of 12%, which exceeds the 9% decline for the tech-heavy Nasdaq 100 Stock Index in the same period.

IPhone Production Woes

Apple, based in Cupertino, California, has suffered supply disruptions stemming from Covid-19 lockdowns in China, but those have been easing. Manufacturing partner Foxconn Technology Group has brought the world's largest iPhone plant back to about 90% of anticipated peak capacity.

The Zhengzhou facility, known as iPhone City, produces the vast majority of high-end iPhone 14 Pro and Pro Max devices. In November, thousands of workers had fled or staged protests against extreme Covid rules. But Foxconn ended most of those restrictions last month and offered more incentives for both new and current employees.

Another Apple supplier, Murata Manufacturing Co., added a note of pessimism last month. The company said it expected the tech giant to reduce iPhone 14 production plans further in the coming months. The iPhone accounts for about half of Apple's revenue.

“Judging by handset availability in stores, I see a downward revision happening,” Murata President Norio Nakajima said in an interview. “I hope that it won't be too deep.”

Meanwhile, Nikkei reported on Monday that Apple has told several suppliers to make fewer components for some products, including AirPods, the Apple Watch and MacBooks, given weakening demand.

Apple is expected to deliver its latest quarterly earnings report in the coming weeks. The quarter that runs through December is its biggest sales period of the year, and analysts had initially projected record-setting revenue. Now they're predicting a slight decline to $122.9 billion, according to estimates compiled by Bloomberg.

Underpinning Apple's valuation is the hope that the company still has major growth opportunities ahead. Services have been a key area of expansion in recent years and now represent more than a fifth of revenue. The company also is working on some big swings, such as a mixed-reality headset that could be unveiled as soon as this year and an electric vehicle.

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First Published Date: 04 Jan, 07:23 IST