Apple is a company that needs no introduction. The company has grown to become the world's largest company in tech, and continues to lead the way with regard to technological innovation. However, the company's stock also took a big dive recently. Yesterday, a report with regard to iPhone demand sent the value of the stock into a downward spiral. Today, we'll talk about the details of the report, how the market reacted to the news, what we can expect to see moving forward, and how binary options traders can take advantage of the trends. So, let's get right to it…
iPhone Demand Is Slowing
When it comes to Apple, their flagship product is the iPhone. So, in order for the company to maintain growth in the market, it needs to maintain growth in iPhone sales. However, a report that was published on Friday showed that this isn't likely to happen. The Nikkei Asian Review is estimating that Apple would extend an estimated 30% cut in iPhone production for another three months. The information offered in the report came from unidentified suppliers, and the reality is that without the suppliers of the components associated with the iPhone, there is no iPhone.
Unfortunately for Apple, there's only one reason that the company would cut production of the iPhone, and investors know it. That reason… demand for the product is sinking. According to the report, slower-than-anticipated sales of the iPhone 6s and 6s Plus are starting to wear heavy on the stock. Recently, Real Money Pro's Dough Kass had the following to say about the issue at Apple…
“I think AAPL's future sales-and-profit outlook is worse than consensus expectations, and that the tech giant's valuation faces numerous headwinds. To me, the last important product upgrade cycle is behind the company now and nothing in the way of new products has and will (in the future) move the needle…”
How The Market Reacted To The News
At the end of the day, the news moves the market, and the news with regard to Apple was overwhelmingly negative news. So, it's no surprise that we saw declines on the company's stock as a result. By the end of the trading day, Apple's stock had fallen to $109.85 per share after a loss of $2.25 per share or 2.01%.
What We Can Expect To See Moving Forward
While I would love to say that I have a bullish expectation with regard to Apple, that simply wouldn't be the truth. You see, ever since the world lost Steve Jobs, I've been concerned about the direction in which the company is headed. Cook is a smart guy, don't get me wrong, but he's no Jobs. At this point, Apple has heavily saturated the market, and the market saturation is creating problems, especially considering that recent upgrades on the iPhone aren't adding as much as we used to see in the upgrades. The bottom line here is that Apple is headed for sales issues, and that is likely to drag the value of the company's stock downward.
How Binary Options Traders Can Take Advantage Of The Trends
As binary options traders, it's our job to predict where values of financial assets are headed. In the case of Apple, the value of the stock is likely headed downward. So, traders should watch for strong put option opportunities in order to take advantage of the downward movement.
What Do You Think?
Where do you think Apple is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Flickr]