Does Apple Need A New Game Plan?

Apple (NASDAQ:AAPL) fell to hit a 52-week low on Friday, extending losses from the day after it dropped more than 12 percent. It also lost its title as the world’s most valuable company by market cap to ExxonMobil (NYSE:XOM) and is now down almost 40 percent from its all-time highs of September as investors get increasingly concerned about margins and earnings growth.

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Some may believe that the stock can’t go any deeper, but according to New York University’s Stern School of Business professor Arun Sundararajan, things will get much worse for the iPhone maker as it grapples with the changing tech world and its standing in it.

“There are more stormy waters ahead for Apple, whose success is largely rooted in a tumultuous, yet determined history that gave it a massive head start a decade ago as the digital landscape became consumer-centric,” Sundararajan wrote on “But the lead is dwindling and the barriers are fading.”

As Apple fell in the closing days of last year, experts had cited issues such as the product shipping delays, the maps snafu, and the slowing earnings growth as possible causes for the drop. But according to Sundararajan, these problems are minor and merely distract from more fundamental future challenges. “Apple has lost its absolute dominance over design,” he wrote.

“For the first time in smartphone history, the most anticipated device of the year will not be an iPhone, but Samsung’s (SSNLF.PK) Galaxy S4.”

While Sundararajan was not declaring complete doom for the company just yet and believed Apple would be able to sustain its 12-figure annual revenues in the short-run, he added that staying on top would will demand fundamental changes from the company.

“To keep its spot on top, Apple will soon need to participate in the imminent creative destruction of its revenue model,” he wrote. “They will gradually have to sacrifice the device lock-in afforded by iTunes. And if that’s not hard enough: Apple must also willingly depart from their comfort zone of the last three decades if future generations of digitally savvy consumers seek convenience and choice over usability and design.”

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