By Chris Illing

CCO @ Activtrades Corp

The New York Stock Exchange’s recorded losses at an overall high level last Friday. Data from the US industry sectors was poorly received by investors. The data does not support expectations of forced interest rate cuts by the US Federal Reserve. While producer prices rose twice as much as expected in February compared to the previous month, retail sales increased by less than predicted. In addition, the number of weekly initial jobless claims has surprisingly fallen.

But so far the major stock indices have performed well since the beginning of 2024. The Dow Jones has gained almost 4 percent since January, the S&P is up over 8 percent and the NASDAQ is higher by 7 percent. Good news for investors.

Yet one of our ‘Magnificent Seven’ stocks has not had a happy 2024 story so far. Apple (AAPL.US) has lost around 7 percent of its stock market value since the beginning of the year. It looks like the company lacks the next big platform for growth.

Apple’s revenue fell slightly in 2023. Sales of iPhones, its most important product with a share of around 52 percent of total sales, slumped by 24 percent in China at the beginning of 2024. Apple’s market share in China is plummeting. The changes between generations of devices are now so fragmented that it practically does not matter whether you own an iPhone 13 or 15. And consumers do not know what model they are using, since it makes no major difference. In these uncertain times, customers also skip a new model, save their money and wait for the next larger update and improvement.

Apple’s chief executive, Tim Cook, has a potential growth driver with the Apple Vision Pro VR headset, but due to the low sales volumes this will not play a role in hardware or software sales in the foreseeable future.

The technology giant will also not be able to compensate for this lack of vision with a sharp increase in its service revenue, which so far accounts for around 20 percent of Apple’s top-line income. A big threat is the Digital Markets Act (DMA) in the European Union (EU) and the danger that it will cost Apple the lucrative deal it has with Google.

Google pays Apple around $18bn a year to be pre-installed as the default search engine on iPhones, iPads and Macs. However, due to the DMA, Apple must now let users in the EU choose their search engine. It is questionable whether Google will continue to pay so much if users choose Google search voluntarily anyway.

A possible new Siri with Artificial Intelligence (AI) functionality might be only available on new IPhones. And, in combination with Airpods, Apple Watch and the willingness of Apple users to share data, the savvy investor should keep a close eye on Apple. And, even though Apple gave up on their car idea, Apple Car Play is still a most desirable feature in every new car.