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Apple Inc. (AAPL): Why is Apple Stock Falling?

Apple Inc. (NASDAQ:AAPL) has recently been experiencing a decline in its stock price to nearly $400, which brought up some kind of a panic among investors and stock-followers. Currently, Apple is trading about 5.17% lower today, while over the past five days, the stock has dropped by 7.27%. The slump of Apple Inc. (NASDAQ:AAPL)’s stock came with a whole bunch of bad news.

This morning, Cirrus Logic, Inc. (NASDAQ:CRUS) dropped by 10% to $19.27. The company announced that its fiscal fourth quarter revenue will be lower than consensus ($207 million against $210 million average estimate).

Apple Inc. (AAPL), Inc. (AMZN), Barnes & Noble Inc. (BKS)

This quarter’s revenue might also disappoint the estimates accounting to $150-170 million, against average $167 million, Barron’s said. “Cirrus in its statement attributed the outlook to “a decreased forecast for a high volume product as the customer migrates to one of Cirrus Logic’s newer components,”” Barron’s also said. Being Cirrus Logic, Inc. (NASDAQ:CRUS)’s largest customer for audio chips, Apple can be blamed for its decrease.

In a piece of news today, Insider Monkey discussed Apple Inc. (NASDAQ:AAPL)’s price war with Samsung in India. One of Apple’s moves in the war is the buy-back program via which Apple is giving current Apple customers cash back for their older Apple Devices. Apple started the program in India recently. “Apple profits are projected to triple in India over the same period a year ago while revenues are expected to be up 250 percent to nearly $1 billion in that country alone.”

At the same time, Apple Inc. (NASDAQ:AAPL) is rumored to be working on an “iWatch (we have covered this matter several times). However, Microsoft Corporation (NASDAQ:MSFT) is also looking into the field, potentially planning to come out with its own device, which will be another competitor to Apple, aside other companies working in this field. A recent report by ABI Research states that more than one million smart watches are projected to be shipped in 2013.

Even Apple’s latest success, the iPad mini, might experience some downfalls. A report from DIGITIMES claims that the deliveries of iPad mini might fall by up to 30% in the second quarter of 2013, which would obviously damage Apple Inc. (NASDAQ:AAPL)’s business. DIGITIMES said that “upstream sources in the iPad mini supply chain expect a 20-30% decline in shipments for the device during the second quarter of 2013 due to lacking demand in the market.”

Since, we’ve mentioned Apple’s market in India, it is important to mention that the company is trying to increase its market share in China, because of the huge potential that this country offers to tech companies. However, the high pricing could become a problem. Despite the fact that currently Apple is dominating the tablet market with its iPad and iPad mini, in China, some models of ultra-low tablets will raise the competition in the next few years.

Even in the mobile applications space, Apple Inc. (NASDAQ:AAPL) is experiencing difficulties, feeling the breath of its primary competitor, Google Inc (NASDAQ:GOOG), which comes with its Google Play service. “While the (Apple) iOS App Store and Google Play both had solid gains in app downloads last quarter, Google Play had a higher percentage growth rate as well as a greater gain in absolute downloads. As of Q1 2013, Google Play’s app downloads were close to 90% of iOS App Store downloads,” Insider Monkey quoted App Annie Index earlier today.

Stay tuned and see if Apple will manage to patch things up and recover eventually.

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