Apple's recent situation appears rather bleak, suffering setbacks across the board, from established to new products, in terms of both reputation and stock prices. It has also faced legal issues in traditional markets like the EU and the US, with its stock price plummeting continuously since the start of the year, culminating in an 8.5% decrease and wiping out $300 billion in market value, thus paradoxically "outperforming" the broader market.
In the context of the soaring NASDAQ 100 and S&P 500, Apple's significant losses are no longer considered normal business fluctuations. Should the market experience a downturn, Apple might face a precipitous fall.
The pessimistic view of Apple's prospects is currently mainstream on Wall Street, with numerous institutions holding a bearish outlook towards the company, including authoritative entities like Goldman Sachs, which have downgraded their ratings and recommendations for Apple.
Regarding Apple's decline, different companies have cited similar reasons, including weak shipments of core electronic products, intensifying external competition, overall market sluggishness, and gradually being edged out of the Chinese market.
Many institutions view Apple's failure in the Chinese market as a primary reason since revenue from China accounts for over one-fifth of Apple's total. Despite the significance of this market, Apple has not given it adequate attention, with sales in China falling by a quarter in the first six weeks of the year, market share dropping below 16%, and being surpassed by Vivo, Huawei, and Honor, hence falling to fourth place.
Many predict that Apple might see its first revenue and profit decline since 2016, marking a critical juncture. However, not all is lost beyond this point, as some institutions and experts believe there's potential for Apple to recover, making now an optimal time for investment.
They argue that Apple's business model is well-established and its balance sheet robust. The upcoming release of the Vision Pro headset in the Chinese market and, importantly, Apple's ecosystem remains intact. The affluent class, accustomed to Apple's systems and devices over the years, still relies on its ecosystem, hinting at hope if Apple maintains its former performance.
But regardless of arguments from either side, ultimately, Apple must save itself. Its fate depends on whether its future products can match past successes.
