Apple falls – will its share price bounce?

Apple continues to lose momentum. In the three months to the end of June the tech giant earned $6.9bn, a 22% fall from last year's second quarter, on roughly flat revenues of $35.3bn. Sales of iPhones jumped by another 20% year-on-year, a better-than-expected rise, but iPad sales declined for the first time on an annual basis. Overall revenue from China slid by 14%. Chief executive Tim Cook promised that new devices would be introduced next year.

What the commentators said

"The history of handsets... shows that dominance doesn't last long," said Rolfe Winkler, also in The Wall Street Journal. "See Palm, Blackberry and Nokia." Meanwhile, China, one of Apple's most reliable engines of growth, is stuttering, said Robert Cyran on Breakingviews. Greater China now accounts for 13% of overall sales, or around $5bn in the last quarter. That's a tenfold increase on 2007. The poor results could be a "temporary stumble", but it's "the first sign that Chinese demand for Apple products isn't insatiable".

Throw in the pressure on margins from cheaper competition, and the pressure on Apple to find something new to sell is increasing, said Cyran. "Investors can maintain hope for only so long" that a "new catchy gadget" will emerge. It's high time Apple delivered. The shares tell the same tale, said Lex in the FT. At 11 times earnings and a dividend yield of 3%, they trade like the stock of "a huge, slow-to-no-growth" tech group. Until the next "revolutionary new product" turns up, "that is precisely what Apple is".

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