Apple shares, among others, fall on low demand
There continue to be signs of lessening demand in the personal computer marketplace and the share prices of several PC makers, including Apple Inc, have taken a bit of a dive in recent days.
The price of Apple shares fell 4 percent on Thursday, based upon new information hinting that Apple’s higher PC prices are making them more difficult to sell in this harsher economic climate. According to the research company NPD, Apple’s January unit computer sales from their U.S. retail outlets dropped 6 percent from a year ago as the value of the dollar fell 11 percent. Apple’s unit market share fell to 13.7 percent from 16.4 percent during that same period.
Apple was hardly alone. Both Hewlett-Packard and Dell Computer shares also fell on the news of decreased demand for PC products. Hewlett-Packard stock fell 8 percent on news that the company had slashed its fiscal 2009 projections the day before. HP, the world’s number one PC maker (and the number two service provider) posted lower-than-expected first-quarter sales of printers, personal computers and servers, showing problems across the board.
At the same time, share prices in Dell Computer, the number two PC maker, fell by 6 percent on Thursday. Dell will be reporting its quarterly results, and their newest projections, next week and they are not expected to be good. Dell has been restructuring their operations over the last year as its market share continues to erode, according to a Reuters article.
ThinkPanmure analyst Vijay Rakesh had this to say: “I think what HP and Apple are seeing is what should be expected in this environment, that consumers are making the change to lower-price, lower-end notebooks.” Given that MacBooks are generally seen to be more expensive than the notebooks made by other makers, this should have a greater overall effect on Apple.
Both consumers and corporate entities have been cutting back on purchase expectations since the economic downturn began, leading many pundits to think that the demand for PC’s may stay at low ebb for a considerable period. Even the market leader could have large problems.
Kaufman Bros. analyst Shaw Wu commented “I think people today are really calling into question that demand could get worse. This recessionary environment we’re in is leaving no stone unturned … I think what HP showed everybody is that even a company as well run as they are is seeing the effects.”
It is gratifying to see that the downward pressure on Apple stock has not been as bad as the share price losses posted by the largest PC manufacturers. It would appear that everyone is going to take some losses during this recession, but it would be a nice reward for product diversification if Apple’s problems proved to be less than those of the more traditional competition.
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February 20th, 2009
good post thanks