The above chart represent’s Apple’s market capitalization, which spiked when billionaire hedge fund manager Carl Icahn announced he had a $1 billion stake in Apple. (His tweets alone added about $17 billion to the company’s market capitalization.)
Then, on September 10, Apple unveiled a pair of new iPhones — the high-end iPhone 5S and the not-quite-so-low-end iPhone 5C. The unveiling was basically panned by investors, who were expected Apple to unveil an iPhone that would help it penetrate lower-end smartphone markets that don’t have carrier subsidies to bring the price of the phones down.
Instead, the “cheaper” iPhone is $549 off-contract in the U.S., and even more expensive in China, which is considered one of Apple’s most important markets. Following that, Apple shed nearly all of its gains that Icahn added to the company following his Tweets. The above chart doesn’t even include today’s dip in market cap (down to around $407 billion), after Apple shares fell more than 3%.
Instead of showing a willingness to go after lower-end markets, Apple may have to once again create a category-defining product like it did with the iPhone and the iPad. Or it can increase its program to return value to shareholders in the form of dividends and share buybacks, which Icahn is suggesting the company does.
Either way the recent plummet has once again raised questions about whether Apple will be able to ignite the rapid growth that the iPhone and iPad granted Apple beginning in 2007.
- Turkey has become a magnet for violence. The country has suffered 434 terror attacks in the last year.
- Since Britain's vote to leave the EU, a series of xenophobic attacks against minority groups in public and online has stunned the country.
- Ready for the U.S. presidential election in November? It's #TurnUpToVote week at BuzzFeed and you can register here 🇺🇸