Tuesday, September 25, 2012

Apple Inc. (NASDAQ:AAPL) Carries From Investors Community High Expectations Due To Huge Brand Name?

The new Apple Inc.(NASDAQ:AAPL) iPhone5 was met with thunderous excitement and anticipation, with about five million phones getting sold within three days of the release of the new smartphone. And yet, Apple Inc suffered a drop in stocks, with the stocks dropping to $680.30 from $700 in less than two trading session. This is an indication of what unrealistic expectations are attached to the company. The analysts had predicted that Apple would sell ten million copies within its first few days, and apparently, people have been let down by the lack of the fulfillment of such an expectation.

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The stocks fell to 1.3% on Monday but the nuances of the expectations were not investigated. The exceptions, and the reason why Apple could not sell ten million iPhone5s, have not been looked at carefully enough. The stocks feel because of the theory of the analysts, but the grounds on which this theory was based, was not evaluated. Even if Apple does not manage to sell ten million copies, the five million which it sold were more than what the other major companies sell in a few months’ time. Also, when Apple announced the sale of five million phones, it did not take into account the pre-orders, which have not yet reached the buyers.

The fact that Apple seems to run dry of the products may be a carefully crafted strategy for marketing purposes. The iPhone5 was too overtly anticipated for Apple to not be prepared for the demand. One also needs to consider the fact that the phone is yet to be released in many countries. Twenty-two other countries will get the new smartphone on the 28th of September. And Apple wants the phone to be sold in a hundred countries by the year-end.

The holiday seasons will also boost sales. The iPhone5 seems to be very coveted even now, and the advertisements released during the holidays are sure to make the phone more popular than it already is.
All in all, there is no reason for stocks to fall, because even with a less than expected amount of sale, Apple manages to rule as the most popular smartphone maker. 

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