It has not been a good start to the year for Apple, the tech giant headed by Tim Cook.

Sales of its products in one of its biggest markets China are slowing and other competitors are gaining ground.

Barclays has downgraded Apple to “underweight” and is recommending “sell”.

Its note read: “We are still picking up weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads and wearables. The continued period of weak results coupled with multiple expansion is not sustainable.”

On the second day of the new year, Apple shares fell 3.6 per cent, to a seven week low shedding US$100 billion of market value in a single day – that’s more than Ford and GM are worth combined.

Last year Apple became a US$3 trillion company. It makes good products but they are very expensive. Huawei is matching it on quality and its prices are more competitive.

Barclays note continued: “Mac and iPad need to revert further to pre-COVID levels. These two products combined were basically showing no growth pre-COVID, but are still running 20-30 per cent above those levels despite the rest of the industry correcting.

“Apple remains a very strong ecosystem moving from Mac-driven to iPhone driven over the last decade. We believe there is less ecosystem pull-through with new products/services, which will make growth harder over the next several years.”

When Steve Jobs was at the helm of Apple it was constantly innovating.He brought the world new revolutionary products. Now it looks like the company is resting on its laurels bringing out a new iPhone every year which has no major distinguishing features from its predecessor. When Apple no longer is viewed as inspiring, there could be a problem.

A Mac and iPhone can set you back thousands of dollars, far more than a Samsung or Microsoft equivalent. In these times of high inflation and having to count your pennies that can be prohibitive.

Apple has to once again innovate and spur interest.

On yesterday’s trading, Microsoft’s stock value ended higher than Apple’s for the first time since 2021. Microsoft is now the world’s most valuable company with a market cap of $2.88 trillion, it’s highest ever. Apple is just behind on $2.87 trillion.

Microsoft has made strides with AI whereas Apple has not…so much.. The tech giant formed by Bill Gates has pushed OpenAI across all its software and is challenging Google’s dominance of web search.

Barclays was not to taken with Apple’s immediate prospects, writing: “After a two year period with better than trend upgrade rate, we see 2023 and 2024 as mean reversion years. Generally a weaker macro backdrop will lead to lengthening hold times.”