People Don’t Realize How Badly Apple Has Done

By Douglas A. McIntyre Published Mar 3, 9:15AM EST

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Apple Inc. (NASDAQ: AAPL) stock has badly lagged the market in the past year.
It has suffered for three reasons, each of which might have been avoided.

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People Don’t Realize How Badly Apple Has Done — © Deagreez / iStock via Getty Images

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) stock is in trouble. Perhaps not in the traditional sense of the word. However, it has badly lagged the market in the past year. Over most periods in the past decade, the stock was so hot, that problem seemed impossible.

The shares are up only 15% in the past year, while the S&P 500 is 34% higher.

Apple is still the world’s most valuable company at $3.6 billion. But Microsoft Corp. (NASDAQ: MSFT) has equaled or topped it in the past year. And Nvidia Inc. (NASDAQ: NVDA) was briefly more valuable.

What’s the Problem

Apple has suffered for three reasons.

Apple has suffered for three reasons, each of which it might have avoided. The first is that its artificial intelligence (AI) offering is considered one of the worst among big tech companies. “The company has been scrambling to catch up in generative artificial intelligence — the technology behind ChatGPT and other cutting-edge chatbots — but its rivals only seem to be getting further ahead,” Bloomberg recently reported.

Part of Apple’s AI problem is that so many of the top ChatGPT products can be downloaded from the App store to the iPhone. These include those from market leaders OpenAI and Elon Musk’s xAI. These make the iPhone a top-tier AI device, without the need for Apple Intelligence, its homegrown product.

Apple has not been successful with the iPhone 16 launch. Like many recent generations of the smartphone, its new features are not much different from the previous one. In the most recently reported quarter, iPhone revenue slipped to $69.2 billion. The iPhone used to be the company’s growth engine.

Finally, Apple has faltered in the world’s largest smartphone market. China’s smartphone count is about 1 billion, which is more than triple the count in the United States. Apple’s Greater China revenue dropped, in the most recent quarter, from $20.8 billion to $18.5 billion. Local competition from smartphone companies, including Vivo and Huawei, have taken market share. The company Apple has also been slow in introducing a high-end AI product in China.

Apple is no longer a growth stock, and its dividend yield is only 0.41%. So, from a shareholder perspective, what is it?

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.