Apple is one of the largest and most famous technology brands in the world, constantly introducing fresh products and dominating a highly competitive market. You’d think this would make it one of the safest bets for any investor, but many experts believe its stocks and shares have been underperforming for a few years now.
There is something of a split opinion from a lot of analysts, with many believing 2017 will be Apple stock’s make or break year. If things go the company’s way, then it could be set for increased growth and offer an excellent investment opportunity. On the other hand, it could stumble again. Here’s what 2017 could hold for Apple.
Bearish Analyst Expectations
There were a number of struggles for Apple in 2016, such as the launch of the Apple Watch failing to really take off. Factors such as this, the longer wait between iOS updates and new iPhone upgrades for customers have seen the company’s growth rate decline for a few years.
Despite this, Apple were due to announce a 2% increase in annual turnover of $77.5 billion. Sales were also up, but only 1.6% in its first fiscal quarter. These figures have led many analysts to predict a bearish outlook for its stocks and shares in 2017. A slight downturn could prove damaging and result in many investors jumping ship should these predictions ring true throughout the year.
Reasons for a Stock Rise
Some experts believe 2017 will be Apple’s breakout year though, with a few factors that could potentially boost its share price. Apple is such a diverse business that it doesn’t rely purely on shifting units of iPhones, iPads and other devices. Its services line (iTunes, iCloud etc.) are one of its fastest growing revenue sectors, which increased by 22% in 2016.
This could help push its value upwards with further improvements and developments. Plus, Apple is not afraid to enter new markets, with the brand focusing more on corporate customers and looking to expand in the massive consumer market of India. If successful, these could be massive in 2017 and see its stock price rise significantly.
The Trump Effect
President Trump may not have everyone’s seal of approval, but as an American billionaire businessman himself, he could be good news for Apple. He has previously mentioned cutting taxes on corporations, with a potential 20% cut of the corporate rate providing a possible boost to Apple’s earnings per share.
Apple also has around $216 billion in un-repatriated funds, something which Trump has said he will place a 10% tax on. This would be down from the current 35% rate and could see the company use it to buy back stock and further increase earnings per share.
New Product Launches
As always, Apple has a number of new product launches expected for this year, all of which it will be hoping boost its stock. An iPad Pro 2, another iPad mini and possible iPhone 8 to celebrate the device’s tenth anniversary could all be on the cards and would be expected to sell well.
However, external factors such as Brexit affecting the USD/GBP currency pair and exchange rates could impact on sales. UK prices have increased as the pound has fallen, which could see lower sales in the country and others affected by it.
2017 looks set to be an interesting year for Apple stocks and shares, with a bit of risk but plenty of potential for any investors.