Apple Inc, the world's most valuable technology company, has lost its edge among investors, according to the latest Bloomberg Global Poll.
Hedge funds sold large stakes of the iPhone maker's stock in the first quarter, Apple shares are down 40% from last year’s high and the company paid higher interest rates for a recent bond sale than Microsoft -- in a PC trumps Mac moment.
Now, 71% of poll respondents say the Cupertino, California, company has lost its cachet as an industry innovator, which includes 28% who say it is permanent and 43% who say it may be a temporary hiccup. There are still true believers; 23% said Apple remains the best in the business. 6% were unsure.
"They've definitely lost their momentum,” said Lionel Mellul, 43, head of the cash equity business at Sunrise Brokers in New York, a poll respondent. "It's still at the point where they might turn things around. They still have a strong brand."
Chief Executive Officer Tim Cook said the company will not introduce a product to add to its innovations -- the iPod, iTunes, the iPhone and iPad -- until the United States fall, one of Apple's longest stretches without a fresh gadget since at least 2000.
Apple remains the most profitable technology company, generating US$41.7 billion last year. In the global handset business, the iPhone accounts for 57% of the industry’s profits, according to Canaccord Genuity.
Increased Competition
Many of Apple's major products are facing increased competition from Samsung Electronics Co's top-selling Galaxy phones, Amazon.com Inc's Kindle tablet reader and Spotify Ltd's music service.
"Apple is innovating around the same things which, in my mind, is not really innovating," said Gala Prada, 42, head of pension funds and portfolio manager for Fiatc Seguros in Barcelona, who answered the poll. "There are companies like Samsung -- which are taking the lead right now innovating in all kinds of consumer and electronics products -- which also make Apple, on a relative basis, look a little bit behind," Prada said.
The popular perception had been "that Apple could do no wrong, the iPhone and iPad were the best, most innovative products on the market, and all competitors are struggling to keep up," said Michael Cumming, 35, a senior equity analyst with Scout Investments in Kansas City, Missouri.
"That has changed mainly because of the success of Samsung's latest products that are very stylish and offer some features not available in Apple products," he said.
Shine Off
Investors have sent Apple's shares down almost 40% from a September high closing price of $702.10 amid slowing sales and profit growth. The company last month reported its first quarterly profit decline in a decade and predicted the slide would continue in the current quarter.