We all like to hope and dream about what could be the "next big thing" that our beloved Apple (AAPL) releases that completely changes our daily lives.
Many of us can remember our first iPod and how amazing it was to be able to put a thousand songs on that small device.
We can remember the first time we saw an iPhone and how much easier it was to use than any other phone before it. The iPad took clunky laptops and made the computer truly mobile.
But, the days of Apple wowing us with the new thing, seem so long ago at this point. And now the lack of a "new" product has hurt revenue, earnings and margins.
So should investors stop buying Apple?
Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells AAPL? Learn more now.
On Tuesday, Apple reported fiscal second-quarter earnings that showed a revenue decline for the first time in 13 years to $50.6 billion from $58.01 billion a year earlier. Earnings were $1.90 a share, down from $2.33.
Wall Street had expected revenue of $51.97 billion and earnings of $2 a share.
In addition, Apple's margin shrank to 39.4% from 40.8% a year earlier.
A big reason behind the disappointing results was declining sales of the iPhone, the product on which the company relies most.
Apple's stock skidded as a result of all the bad news.
Going forward, Apple may show even more signs of weakness.
IDC recently updated its quarterly figures on smartphone shipments and market share, and because Apple shipped 10 million fewer units, its worldwide market share fell to 15.3% from 18.3%.
Meanwhile, smartphone rival Samsung shipped 81.9 million units this past quarter, compared with 82.4 million units in the previous quarter. Its market share fell 0.1%.
Lesser-known Chinese brands such as Oppo, Huawei and Vivo all saw increases in shipments and market share, more than making up for the shipment volume that Apple lost. Overall industry shipments for the quarter were about flat from a year earlier at 334 million units.
Interestingly, 67% of Apple's revenue came from China this past quarter. With Apple so heavily reliant on the Chinese market and competition really heating up in that same market from local players, the company needs that "next big thing" now, if it wants to differentiate itself again and remain a top stock to own.
All this means that investors may not want to sell their shares, but they shouldn't buy more for the time being. Wait for Apple to prove that it is still an innovative company that can get back on track with revenue growth and isn't fated to become the next Microsoft.
Don't buy Apple; buy this technology stock instead. There is a battle raging in the fast-moving world of Silicon Valley. Just as VHS tapes snuffed out Betamax and CDs killed cassettes, the winner of a new "gold standard" for data is about to be crowned. Here is a small company that figured out a way to corner this new $10 billion market, no matter who comes out the winner. Click here to learn more.