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Apple is Down, But There's No Reason to Worry
By: Greg Dorn
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Back on September 21, Apple, Inc. made history. As their stock shot up to a record-high $705 a share, they became the largest company ever in terms of market cap. The iPhone 5 had just hit shelves, and Apple was riding a wave of success. All was well in Cupertino, CA. Then, in the span of two months, Apple’s stock began to plummet. The stock was down over 20% from its September 21 peak (around 100 billion in market cap). And yet, the iPhone 5 had record setting first-weekend sales. The iPad mini was released and in high demand. Needless to say, many investors were left puzzled. How could a company with so many products flying off the shelves take such a drastic nosedive? Here’s what happened, and why there’s no reason to worry.
 
Samsung’s numbers were taken out of context. When Samsung announced that they sold more Galaxy S IIIs that iPhones in Q3, many investors were rattled and quickly hit the sell button. However, these numbers are completely skewed. The truth is, Samsung’s flagship handset had been out for months when the year’s 3rd quarter came to a close; the iPhone 5 had only been available for nine days. In goes without saying that Q4 will give us a more accurate picture of where the iPhone stands.
 
Supply was falling short of demand. With its signature thin and light design, this is not just the greatest iPhone yet, but the most complicated to assemble. Just ask the employees at Foxconn Technology Group, Apple’s iPhone manufacturer. Apple created such a delicate device that workers were taking an ample amount of time to assemble the products. The problem reached its boiling point when iPhones were increasingly seen with scratches fresh out of the box. Foxconn employees fired back, asserting Apple’s supply demands were unrealistic for such a complex design. This of course led to a supply and demand fiasco, and uproar over at Foxconn. But with Tim Cook at the helm, an intervention was on the way. Cook’s sympathetic approach to company problems led to his visit at Foxconn’s China location where he surveyed the factory and listened to company concerns. This no doubt boosted morale at Foxconn. Since then, fewer of scratched iPhones have surfaced and Apple has begun to catch up to the iPhone 5’s high demand.
 
An executive shakeup means more of Jony Ive. Whenever a company loses two major executives, people will surely take notice. So when VP of iOS software Scott Forstall and retail chief John Browett abruptly left the company, investors were more than concerned. Was Apple losing some of its stability? With Forstall out, the man who dazzled onstage to showcase iOS, would Apple continue to innovate? Given that many of Forstall’s duties were left in the hands of star product designer Jony Ive, investors can rest easy. Jony is an innovator in every sense of the word. He might not command the stage like other executives, but his filmed videos at major Apple events show Steve Jobs-esque passion and creativity. In my opinion, the more Jony Ive has his hand in the company, the better.


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About the Author
Greg Dorn is a blogger, writer, and obsessed with everything technology and social media. Greg is absolutely captivated with the recent advancements in mobile gadgets, making our world more seamlessly connected. You can learn more about him on his own blog here
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