4 Reasons Apple Inc. Stock Investors May Want to Reconsider

AAPL stock - 4 Reasons Apple Inc. Stock Investors May Want to Reconsider

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Invariably, suggesting that Apple Inc. (NASDAQ:AAPL) is anything but infallible incites the rage of fans and followers (and presumably owners) of AAPL stock. Just because this raucous crowd doesn’t like to deal with all the facts, however, doesn’t change those facts. And the facts are, Apple has run into a handful of roadblocks of late and, while they may not be a major threat, they are worth noting.

4 Reasons Apple Inc. (AAPL) Stock Investors May Want to Reconsider Their Position

With that as the backdrop, here’s a quick look at the four biggest headaches Apple has. They don’t seem to have had an adverse impact on the price of AAPL stock just yet, but should these red flags fester in investors’ minds, anything’s possible.

1. China

Apple’s relationship with China’s government has always been a tenuous one, though at least serviceable. It seems to be moving backwards, though. Very recently, the state’s leadership insisted the company remove hundreds of apps from the version of the app store it maintains for that market.

To be clear, Apple is still doing business in China. It’s just not doing as much as it was up to this point. And this matters because China accounts for nearly 20% of the company’ revenue.

2. Tepid iPhone X Reviews

It’s still an amazing device, to be sure. The recently-launched iPhone X, however, may not have been quite ready enough, if the reviews of the phone are any indication.

Consumer Reports review of the newest iPhone gave it a score of 80, which still qualifies as a “recommendation.” The same rundown of the latest iPhones from all manufacturers, however, gave the Galaxy S8 from Samsung Electronics Co Ltd (OTCMKTS:SSNLF) an 82, edging out Apple’s top entry.

Somewhat embarrassingly, the big factors driving the score lower were poor battery life and a display screen that’s easy to break.

3. Nothing for an Encore

Had two different expert observers not more or less said the same thing in regard to this subject, it might not even be worth mentioning. However, on Dec. 4, Forbes contributor Ewan Spence opined: “The short- and medium-term returns have been incredible. The question now is what comes next? Will Apple coast along on past glories and a slick PR machine? Or can it change the world again and again and again? The evidence so far points to a company looking backwards.”

Two days later, Motley Fool’s Ashraf Eassa chimed in, saying: “Apple must introduce some sort of noticeable form factor change with the 2019 iPhones if it wants to keep sales at least flat.” Problem is, a form factor change is not only the least likely change we’ll see with a next-generation phone from Apple, it’s also the most difficult aspect of the iPhone to update. (Software is relatively easy.)

And it’s not the first time this idea has surfaced. It doesn’t appear the company has anything game-changing on the radar, which is a very un-Apple-like situation.

4. iOS 11.2 Problems

To be fair, software bugs and software-update hiccups aren’t unheard of. On the other hand, for as long as Apple and its rivals have been offering remote updates and operating system software downloads, the company should be able to dish them out without a hitch. That’s why the rollout of the most recent operating system update from Apple has been so surprising — and a little disappointing. The new 11.2 version of iOS has created more problems than it solves.

It’s not the end of the world, but it is an embarrassing gaffe that could leave some consumers wondering if Apple has lost its magic touch of perfection.

Looking Ahead for AAPL Stock

Don’t read too much into the red flags. Even on its worst day, Apple is still a better company than most, and AAPL stock is still a better investment than most other stocks.

On the other hand, this is a company and a stock surrounded by high expectations. If and when those expectations aren’t met, this name brings the added risk of falling off of a tall pedestal rather than just tipping over.

While such setbacks have only been temporary in the past, each year is another year competitors have to catch up. And, each year is another year closer to a full saturation of the all-important smartphone market.

There’s also no getting around the reality that while Tim Cook is a capable enough CEO, he’s no Steve Jobs.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.

Article printed from InvestorPlace Media, https://investorplace.com/2017/12/4-reasons-apple-aapl-stock-investors-reconsider/.

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