Since its founding, Apple’s (AAPL) image and reputation have been luxurious and smelt of a premium product, even in its first Macintosh computer, released in 1983. The symbol of the forbidden apple as its logo also created the required vibes of unattainable knowledge that only elevated its products’ allure. In the early 2000s, the company resumed its success by creating the iMac G3 and iMac G4, changing the standard for home computer hardware and software. Apple has continued to be the benchmark for quality and innovation with the iPod and, subsequently, iPhones.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
“Times are a changing,” sang Bob Dylan, and they sure are. Although Apple remains an industry leader in smartphones and personal computers, its glamour seems to be waning, and other companies are producing less alluring tech, but efficient nonetheless, with much cheaper price tags, and are trying to take a bite out of the forbidden apple.
If you wish to read more on Apple’s struggles, you can read what our writer at Tipranks, Bernard Zambonin, wrote about AAPL stock.
Let’s look at Apple’s current challenges and future outlook ahead of 2025:
- Intense Competition and Market Dynamics: Apple faces several challenges as it heads into 2025. Intense competition in the smartphone and computer markets continues to challenge its dominance, with competitors like Samsung (SMSN) and rising Chinese brands such as Xiaomi (XIACF), Oppo, Vivo, and Realme capturing over 36% of the global smartphone market, it’s clear that affordability is shaping consumer choices. In the meantime, the company leads the global smartphone market with a 27.7% share and holds a 9.8% share in computers, whilst In the U.S., the margins are higher with a 55% market share in smartphones and 15% in computers. However, the competitive landscape remains tough, and sustaining this position requires continuous ingenuity and intelligent strategic navigation. Maybe the company’s new Apple Intelligence will set a new benchmark in the AI industry, but it’s still to early to call.
- Supply Chain and Regulatory Challenges: Potential supply chain disruptions, especially with efforts to extend the possibilities of manufacturing outside of China, pose significant risks. Geopolitical tensions and logistical issues could impact production timelines and costs. These potential risks and logistics could directly affect Apple’s bottom-line margins. For example, just setting up a new chain supply and ensuring quality control would boost the company’s expenses in a big way.
- Product Innovation and Financial Outlook: Apple is working to decrease its reliance on Qualcomm (QCOM) GPUs by developing its custom-designed chips and leveraging alternative technologies. The company has been designing its chips, such as the A-series for iPhones and the M-series for Macs, including integrated GPUs. This allows Apple to optimize performance and efficiency specifically for its devices, reducing the need for third-party GPUs. These efforts are part of Apple’s broader strategy to maintain independence and control over its technology and ensure greater revenue margins in the long term.
Is Apple a Buy, Sell, or Hold?
Apple is a Moderate Buy on Wall Street, based on 19 Buys, 9 Holds, and 2 Sells. The average price target for AAPL stock is $242.60, implying a 3.69% downside.
Takeaway
Apple has always been synonymous with luxurious products that screamed ‘premium’ when looked upon. The company still holds a significant portion of the market in smartphones and home computers; however, times are changing, and more and more companies create top-notch devices with much cheaper price tags, while Apple is losing the technological edge it once had. If Apple wants to continue to hold its leading position, it can’t stagnate and will have to deliver a big upgrade to its products, as its brand reputation will not be enough in the long term.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
