Apple Inc’s market capitalization fell sharply on Tuesday after a steep decline last year and is now below $2 trillion for the first time since March 2021. The U.S. stock market spent the carnival of 2020 and 2021 under the quantitative easing policy introduced in the United States in March 2020. During these two years, the assets held by the Fed doubled, the Nasdaq increased by more than 60%, and the S&P 500 by 50%. In this case, Apple’s market value also increased from $1.2 trillion in 2020 to $3 trillion.
We should not be particularly surprised that Apple’s stock price has fallen by 27% in 2022. Behind this are a general decline in the U.S. stock market, the black cloud of Foxconn’s supply freeze, and falling demand hanging over Apple. Apple itself is not optimistic, even with the Christmas sales, growth would fall below 8% between the end of 2022 and the first quarter of 2023.
When Apple released its financial report in October 2022, the company did not expect such a severe stagnation in production at Foxconn. Just as the “Black Friday” shopping season began in Europe and the United States, workers halted production of the iPhone 14 Pro and Pro Max, which brought Apple its biggest profits.
For the problems of insufficient supply and falling demand, Apple can only relocate production lines and lower prices. According to reports from 9to5 Mac, Apple has started considering a price cut for the regular version of the iPhone 15 and the iPhone 15 Plus. As for the supply chain, iPhones manufactured and exported by Apple in India will double to $2.5 billion from April to September 2022.
That figure will continue to rise over the next 10 years until India’s share of production reaches half. However, for at least the next five years, Chinese production will still be the main component of Apple’s supply chain. Because of the long-term dependence on the Chinese supply chain, it is impossible for the company to change the supply chain immediately.
We also recently learned that Apple CEO Tim Cook is expected to earn $49 million in 2023, far less than his $99.4 million in 2022. And a quote from Cook himself: “The global challenges with us all today – from inflation to war in Eastern Europe, to the enduring impacts of the pandemic – make this a time for deliberate and thoughtful action, but it is not a time to retreat from the future.”