Not Innovative Enough?

iPhone X has received harsh reviews that it is not as innovative as expected. (photo courtesy: Apple Korea)
iPhone X has received harsh reviews that it is not as innovative as expected. (photo courtesy: Apple Korea)

 

Although Apple unveiled its new iPhone X flagship smartphone, it has received harsh reviews that it is not as innovative as expected. Accordingly, the company has lost more than US$46 billion (52.19 trillion won) in market capitalization in 10 days. 

According to the data from Bloomberg on September 24, the price of Apple share started decreasing from US$160.86 (182,496 won) on the 12th (local time) when the iPhone X was revealed and closed at US$151.89 (172,319 won) on the 22nd, down 5.6 percent over the period.

As a result, the company’s market capitalization dropped from US$830.8 billion (942.54 trillion won) on the 12th to US$792.3 billion (898.86 trillion won) on the 21st, falling short of US$800 billion (907.6 trillion won). As the stock price of Apple went down by 0.98 percent on the 22nd, the market cap closed at US$784.5 billion (890.02 trillion won). In short, Apple lost US$46.3 billion (52.53 trillion won) in market cap in 10 days.

This is due to the fact that the iPhone X is not innovative enough to have a high price tag of US$999 (1.13 million won) and the launch date was postponed to November 3, casting a cloud over performance estimates.

In fact, Apple revealed the iPhone X at the Apple Park in California on the 12th and demonstrated its new facial recognition technology dubbed Face ID. However, the company failed to demonstrate the technology and was disgraced in public.

In addition, Apple launched the iPhone 8, which was unveiled with the iPhone X at the same time, in major countries, such as the U.S., China, Australia and the U.K., on the 22nd but consumers have a lukewarm reaction. Some consumers are waiting for the release of the iPhone X and delaying the purchasing decision so Apple can lose their customers.

The failure of the iPhone is not only a problem of Apple. Apple ranks first in terms of market cap that has huge impact on global stock markets and has many component suppliers around the world. The stock price of Foxconn, the Taipei-based electronics manufacturer that builds Apple's iPhone, decreased 2.41 percent on the 22nd. In short, Apple adversely affects IT stocks.

Munster, an investor of Loup Ventures and former Apple analyst, said, “The price of Apple share can go down by 5 to 10 percent after releasing the latest iPhone.”

However, there are positive outlooks as well. Michael Olson, a senior research analyst at Piper Jaffray, raised the stock price forecast from US$190 (215,555 won) to US$196 (222,362 won) on the 22nd. He said, “With the high price of the iPhone 8 and iPhone X, Apple’s performance will improve.”

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