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Why Apple stock continues to fall

There is no doubt that Apple products are hot sellers. With loyal customers and new Mac fans alike lining up overnight to buy the latest products, the company has experienced a significant surge in popularity over the last few years. Their ingenuity and innovation have earned them a massive fan base, not to mention billions of dollars.

However, recently the technology giant’s stocks have been decreasing in value, and despite Apple stores everywhere being packed, they’re continuing to drop. So just why are stock prices lower? And will they continue to fall, or will they regain their once incredible value?

In a recent article, USA Today blamed Apple’s declining stock prices on the fact that the company is “too popular for its own good.” As products like the first iPhone and iPad were introduced, investors were lured and stock prices skyrocketed. This was great for as long as the company’s sales and overall growth were increasing while they also maintained industry-leading profits. Unfortunately, when Apple’s growth margined suffered – ever so slightly – economic reality set in and the same investors who had priced the stock for perfection started having second thoughts.

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YCharts – AAPL

Lately, Apple stock is being repriced for reality. The hype has settled down a little and people are realizing there are other companies with innovative products out there, too. I liken it to the real estate market in some parts of North America. Prices skyrocketed and people were flipping houses, investing and getting rich. But when economic reality set in and things weren’t quite so easy, values dropped significantly. Now in many areas they’re experiencing a “correction.” Once inflated prices that dropped too low are starting to return to a reasonable rate.

This may be what’s happening with Apple’s stock. After all, it’s been based largely on excitement over unveiling new products. And as growth slowed and the company experienced a lull in the pace of innovation, stock prices suffered. Group that with sinking profit margins and a disappointing sales forecast from a key supplier and it’s no wonder they’re in the position they are now.

Growing competition from Android smartphone and tablet manufacturers doesn’t help either. Consumers have more choice now then they did when the first iPhone was released, especially from manufacturers like Samsung who offer a wide range of smartphones, tablets and phablets in varying sizes and prices. In 2012, Samsung actually overtook Apple, with 30.3% of the market share compared to Apple’s 19.1%. This fear of weakening demand for the iPhone and greater competition also has investors spooked and has lead to falling stock prices.

Furthermore, some in the industry feel that the company has lost its way since the death of iconic founder and CEO Steve Jobs, who was such a force with leadership, common sense and innovation. Some of the changes and choices made under the reign of Tim Cook have not gone over as well, and speculation over falling stock prices has largely occurred since Jobs’ passing.

While rumors about hot new Apple products like the stunning Mac Pro, OSX Mavericks, the iPhone 5s and even the fabled iWatch are circulating, critics still feel the company has yet to regain its “mobility mojo” and likely won’t do so until the fall. Apple is certainly experiencing lull and transition, and the initial mania over smartphones and tablets may have passed, but in the long run I believe stock prices will remain valuable as the company finds its feet again and continues to provide consumers with quality electronics and computing solutions. Over time, this dip in stock value will likely be seen as no more than a mere bump in the road.