Several investors think that Apple already reached a point where it would no longer grow. However, analysts said that Apple could still turn things around.
The tech titan posted a US$7 billion net profit in the second quarter. The figure represented an overall slump of 22% in contrast to last year's profit of almost US$9 billion. Apple's iPhone, the company's flagship device, was no longer an innovative market-changer. Considering the tough competition and the inexpensive phones in the market, Apple would really need to launch a new device. Analysts said that the lofty profit margins Apple was known for were declining and would continue to drop unless the company releases a budget iPhone. A cheaper version of the original iPhone could significantly increase Apple's revenue.
If Apple wanted to target the growing Chinese market, a mid-range phone that would offer the same experience as its premium iPhone would provide the break that the company needs. Apple's iPhone 5 16 GB is currently worth US$649 while the 64GB is worth US$849. Analyst Ming-Chi Kuo of KGI Securities estimated the budget phone to be worth between US$450 to US$550. Apple's stock is currently cheap, as signified by its price to earnings ratio and the company is still solid. Analysts said that a budget iPhone would make Apple an excellent buy again.
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