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Apple’s Profits Drop

In our economics class incentives have really interested me. This economic term is something consumers and suppliers use everyday without noticing it. One of the major components to the United States is the US Stock Exchange. Apple undoubtedly one of the most popular electronic companies in the world. According to the Washington Post, Apple has sold more then a total of 85 million iPhones in the U.S. since 2007 launch and 34 million iPads since 2010.

Tim Cook, Apple's chief.

Tim Cook, Apple’s chief.

Apples stocks have slowly been increasing since 1983. This past year Apple experienced its highest opening price for a share $702.10 which was seen between October and December of 2012. Since January 2013 though Apple has had some trouble with their stocks, they have slowly been decreasing in price and closed April 23, 2013 at a price of $406.13. The reason for the drop in stock prices is because Apple haven’t released any large new products since the iPad Mini and people are finding it easier to buy the iPhone 4 free with a two year contract then spending $200 on an iPhone 5.

“On Tuesday, the technology giant announced that it planned to more than double its program to return cash to shareholders through stock buybacks and a higher dividend, spending $100 billion on the effort through the end of 2015. Its share repurchases alone will increase to $60 billion from the $10 billion it committed previously, the largest such plan in history, the company said.”

The move to renew investors interest with Apple stock came as the company announced its first profit decline in a decade. Apple said its net income fell 18 percent in its fiscal second quarter, as one of the most successful technology franchises in recent years, the iPhone, showed signs of slowing down.

Apple Stocks 4-23-13

Apple Stocks 4-23-13

Apples announcement of the company planning to double its cash return to shareholders through stock buy backs and high dividends, is an example of incentive. Apple hopes that their new program invites investors to buy back into the company by giving them a incentive of double cash back. If successful, Apple could see another successful year like they did in 2012.

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