Apple's 2007 Great Recession survival Less than a decade later, the U.S. was hit by another recession that grew global by 2009. This article is more than 11 years old. Bank of America analyst Wamsi Mohan is projecting Apple’s revenue to sink by only 2% in the first quarter of 2020, due in large part to the Covid-19 pandemic that erupted in China and spread around the world. On February 27th, 2009 (near the Great Recession bottom), Apple's PE hit 15.6, indicating that iPhone concentration risk fears have resulted in the company commanding lower multiples during … Apple Inc. has been known to outsource manufacturing from China; however, some are not aware of the fact that one in every three Apple engineers is outsourced. They were good, very good—the results, that is, not reality. Speaking to reporters last week, Trump recounted a conversation with Cook in which the Apple chief argued that his company's main competitor, South Korea-based Samsung Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. (SSNLF) , would have an advantage if tariffs were imposed on iPhones. 6 Iconic Companies That Succeeded During a Recession | Inc.com The post Why Apple’s Stock Can Keep Growing During a Global Recession appeared first on InvestorPlace. 1125 N. Charles St, Baltimore, MD 21201. Apple's stock has been cut in half this year as investors worry sick that, as the recession takes hold, consumers and companies won't be able to afford its slick, expensive products anymore. Copyright © 2021 InvestorPlace Media, LLC. The services segment, which makes up around 20% of Apple's revenue, is poised to grow further with several new offerings launching this year: Apple Card went live this month, while Apple TV+ and Apple Arcade are due to launch this fall. Published Sat, Mar 14 202011:21 AM EDT Updated Sat, Mar 14 202012:01 PM EDT. All rights reserved. While companies in the U.S. are still inching toward reopening, Apple’s supply lines have already returned to normal in China, Mohan says. That's not what Apple did. Apple proves recession-resistant, for now A stellar quarter in the face of one of the weakest holiday shopping periods in recent memory has … Apple is continuing to innovate and as Tim Cook said, it will spend on R&D through this recession like it did in 2001. Apple's retail stores are showing signs that they're not immune to the deepening recession, but at the same time they're still serving their intended purpose of … While Growth in iPhone sales -- and premium phone sales in general -- have been on the wane for years, with upgrade cycles steadily getting longer. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. Apple is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. But now I want to revisit the Cupertino, California-based tech giant to talk about something just as compelling — Apple’s ability to grow even during the teeth of what appears to be a burgeoning global recession. (AAPL) - Get Report  would occupy an especially unique position in any future downturn: The iPhone giant is among the most valuable and influential companies in the U.S. economy, but it's also at the nexus of the escalating U.S.-China trade conflict, which some believe could accelerate the onset of a recession, and further worsen their prospects should the trade war continue. In 2000 during the dotcom bust, companies across the board trimmed their headcounts and reduced their research and development spending. Apple is a premium brand. At the bottom of Apple’s success during recession is their strong 21 focus on end consumer, and their commitment to adding value. iPhone sales are still central to Apple's overall financial performance, making up 48% of its total revenue last quarter -- and an economic downturn could exacerbate already slowing trends, according to Romeo Alvarez, technology analyst at William O'Neil + Co. Should Apple find itself in a position where it must lower sales estimates like it did in the January quarter, he said, it could produce another extreme reaction in the stock. For example, during most of the 2008 recession (December 2007 to June 2009), Apple, Amazon, Microsoft, and Google struggled against the broader market (Russell 3000). Contrary to investor expectations, several growth stocks including Apple Inc. (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), and Netflix Inc. (NASDAQ:NFLX) grew during the 2008 recession… Apple's earnings might take a 1% to 12% hit in 2020, depending on how bad the trade war gets. Copyright © In a recession, Apple could find itself in a particularly tight spot. Recessions negatively affect companies of all types, but Apple © 2021 TheStreet, Inc. All rights reserved. 2021 InvestorPlace Media, LLC. Apple shares rose $11.65, or … 6 Iconic Companies That Succeeded During a Recession Microsoft: 1975. Bank of America analyst Wamsi Mohan is projecting Apple’s revenue to sink by only 2% in the first quarter of 2020, due in large part to the Covid-19 … Revenues for the past three months dwindled to … Apple's financial performance will almost certainly suffer, perhaps greatly, during the next recession. Amazon, Apple, Microsoft and Alphabet (parent of Google) are now each worth more than US$1 trillion defying the global downturn and trends of recession. What recession?" Because this is much more than a smartphone company. Nasdaq in Q408. Baruah also trimmed his estimates for the company for all periods. The average iPhone has been active for 18 months, compared to 16.5 months for the average Samsung phone. The vision behind Netflix. When the government increases spending during a recession, it effectively increases demand. In fact, Mohan believes that AAPL will recover quickly, earning $263.21 billion in revenue in 2020, which would be a 1.2% growth rate even as the U.S. sinks into a recession. 1. … This must provoke serious thinking in rival China that also boosts its fast growing Tech giants. Unemployment tends to rise quickly, and often remain elevated, during a recession. Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. The last time I talked about Apple (NASDAQ:AAPL), it was to highlight the innovative culture that I think will continue to drive AAPL stock higher for the foreseeable future. Apple said it had sold 4.36 million iPhone 3Gs in its holiday quarter, down from 6.9 million phones during the autumn quarter, when the 3G version was released. Apple's stock proved resilient in the last recession -- but things are quite different this time around, with Apple grappling with longer iPhone upgrade cycles and an uncomfortable position at the center of the U.S.-China trade conflict. Things are quite different now. In the fall of 2009, for example, it posted both record profits and record sales of … That beat analysts’ expectations of $54.54 billion in revenue and EPS of $2.26. "In a recession, … Coinbase CEO Brian Armstrong criticized Apple Inc (NASDAQ: AAPL) on Saturday, saying the latter was stymying its efforts to let its app users earn money using cryptocurrency. During the recession quarters Q308 to Q309 S&P earnings fell to zero or below. 3 Big Stories to Catch Up On. Apple has been around since the 1970s, and the original iPhone launched in 2007, toward the beginning of the financial crisis. quotes delayed at least 15 minutes, all others at least 20 minutes. Boasting a market capitalization of $1.3 trillion and a net cash position of $83 billion, it is uniquely positioned to handle the economic downturn, no matter how long it lasts. But Apple's fortunes contrasted sharply with those of Yahoo, which reported another disappointing quarter. Feb. 2, 2009 SAN FRANCISCO — At a time of deepening recession and intensifying controversy over the health of its chief executive, Apple reported … “Why would Apple want to prevent people from earning money during a recession? "This is basically part of the broader argument about the distortionary impact of tariffs," Spatt added. Amazon, Apple, Google, and Facebook raked in a huge amount of money last quarter: $38 billion in profits on nearly $240 billion in revenue. Apple will continue to confound expectations. All rights reserved. SafeMoon Crypto: 11 Things to Know as SafeMoon Prices Rocket 100% Higher, #DogeDay420: 16 Things for DOGE Investors to Know About the April 20 Dogecoin Holiday, Expect Palantir Stock To Skyrocket As Its Revenue and Profits Spike, NIO Stock: The Big Short-Selling News Driving Interest in Nio Today. "They might have to lower guidance, and if you look at what happened last time, the drop could be significant," Alvarez said. Apple announces record profits as iPhone and Mac sales defy recession This article is more than 11 years old • California company posts $1.67bn (£1bn) quarterly profits • … Apple’s earnings dropped as well but remained positive throughout that period bottoming at 37% growth(!) Mon 19 Oct 2009 17.43 EDT. Amazon, Apple, Google, and … 1125 N. Charles St, Baltimore, MD 21201. But that was when the iPhone was still new and a must-have gadget for Apple lovers, and that powered Apple through a deep downturn and beyond. 3. incorporate Apple, Inc., and investigate their success during the recession. During the recession quarters Q308 to Q309 S&P earnings fell to zero or below. “Why would Apple want to prevent people from earning money during a recession? It’s not every company that can manage to sustain a growth rate during a recession, but I’m banking on Apple to confound expectations. While Apple actually got its start in 1975, during another downturn, the Apple we know today largely came of age just a decade ago. In fact, Apple actually enjoys a higher profit margin from its Services segment than it gets from its entertainment division or its popular smartphones. It’s also an object lesson in how to not just stay afloat during a recession, but to use the learnings from one to drive a company forward. After Apple lowered its fourth quarter revenue estimates on Jan. 2, its stock price tanked nearly 10% in one day. Apple performed well during the last recession, and its stock recovered far earlier than the major indices. "With respect to the U.S., Apple could be more at the core of it than anybody else," said Chester Spatt, a professor of finance at Carnegie Mellon and former chief economist at the SEC. 2:03 PREVIEW In the Beginning. That’s right, a recession. However, following the market bottom in March 2009, these Big Tech stocks took off, outperforming the Russell 3000 by 11% by the end of June: Want to be alerted before Cramer buys or sells AAPL? Article printed from InvestorPlace Media, https://investorplace.com/2020/05/aapl-stock-can-grow-during-recession/. Darren Dahl. Apple seems to have an endless source of demand immune to … Apple has managed to capture significant market share even in these financially conservative times. Analysts argue that US Tech giants have proved their strength, creativity and resilience during the pandemic. Bobbie Johnson in … But that’s just a blip. Apple Inc. has been known to outsource manufacturing from China; however, some are not aware of the fact that one in every three Apple engineers is outsourced. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. Click here to sign up! Renderings of the phone indicate this the next iPhone will include the biggest design change since the iPhone X in 2017, and that should also trigger plenty of iPhone sales. "Apple AAPL sells mid- to high-end computing devices, mainly smartphones, tablets and PCs," analyst Kathy Huberty writes. If Apple were compelled to raise prices on iPhones to offset costs -- Wedbush analyst Dan Ives estimated recently that tariffs could lead to a price increase of $75 to $100 for iPhones, although JPMorgan's Samik Chatterjee has pointed out that could be mitigated by lower memory prices -- that could present Samsung with a key pricing advantage, and worsen any blows to demand from a recession. During the last recession, Apple's stock proved far more resilient than many. Why Apple’s Stock Can Keep Growing During a Global Recession, Louis Navellier and the InvestorPlace Research Staff, the biggest design change since the iPhone X in 2017, the biggest tech revolution of this (or any) generation, Buy Rocket Companies Stock As It Holds Steady at a Nice Entry Point, Matt McCall and the InvestorPlace Research Staff. Save 57% With Our Labor Day Sale. in Q408. Stocks like Reynolds and Raytheon can weather a recession and even show upside, analysts say. Matthew Wille 1.16.2020 1:18 AM Apple might just be the most recession-proof company in the world. And even in the current recession, Apple’s recent second quarter results showed a rampant disregard for reality. Apple has made progress in diversifying its business away from the iPhone, recently reporting double-digital growth in both its wearables and services segments. 2009 Preview SONG TIME Intro. Apple shares were down 1.13% on Tuesday to $204.16 and are up 30.7% year to date. Apple surprised Wall Street today by announcing record-breaking sales and profits, as the Californian technology company continues to defy the recession… While other companies struggle, AAPL is maintaining its commitment to shareholders by returning value. In the preceding decades, the US economy had been experiencing the gilded age of growth and wealth building. In the early 1970s, the U.S. entered a 16-month recession when the GDP took its worst hit in nearly two... Apple: 1975, 2001. As a result of S&P earnings collapse the S&P P/E shot up astronomically (as E approaches zero, P/E approaches infinity). For the quarter, the company reported earning $13.3 billion from its Services segment, which was up 16% from a year ago. Netflix made a name for itself in 1997 as pioneer of the DVD mail-order business, ultimately helping drive competitors like Blockbuster and Hollywood Video out of business. Part of it is Apple’s diversified nature. The views and opinions expressed herein are … Apple's stock has been cut in half this year as investors worry sick that, as the recession takes hold, consumers and companies won't be able to afford its slick, expensive products anymore. They seem to not be ok with it, if it uses cryptocurrency. Apple’s incredible employees were already able to launch new iPad Pro and MacBook Air models in the most recent quarter while working from home, so I have no doubts that the 5G smartphone will be out by the end of the year. 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