Stocks Fall Slightly As Tobacco Has A Bad Day
Worries About iPhone Sales Dog Apple
The other reason the market fell is because Apple stock declined 2.8%. I don't like this name as the stock is only off 4.91% from its all-time high despite the very real worries that iPhone sales will disappoint. The latest source of concerns came from Taiwan Semiconductor as the firm stated its revenue guidance range for the second quarter is between $7.8 billion and $7.9 billion which is way below the consensus for $8.8 billion. The main reason for the weakness was high end smartphone demand which analysts expect is caused by Apple. Apple's earnings are May 1st. Wall Street expects it to sell 42 million to 43 million iPhones.
The company has transition to a services firm because the smartphone market has peaked. This is a smart move because people still use their devices often, they just buy them after longer periods (longer replacement cycle) and the market is saturated. All this points to selling products at lower prices yet Apple raised the price of the newest iPhones. Margins will be hurt if the firm needs to reverse course and lower them next fall, but that could be the most sustainable option.
