Apple Inc. (AAPL): The Key Issue Worth Watching

What now?
The Catch-22 for Apple is finding a way to build productive relationships with international wireless carriers unwilling to play by CEO Tim Cook’s rules, as it faces rapidly declining margins. Apple Inc. (NASDAQ:AAPL)’s gross margin in its recently completed fiscal Q2 was 37.5%, down from a whopping 47.4% in the year-ago period. That, along with a perceived lack of innovation and delays in introducing new products, are largely to blame for Apple’s recent slide in share price.

As Samsung is demonstrating, there’s a lot to be said for sales volume, and there’s only one way to achieve that on a global basis: increase the number of worldwide carriers. It’s time Apple Inc. (NASDAQ:AAPL) recognizes it can’t call the shots the way it once did — not on the international stage. The market’s changed, and it’s time for Apple to set the ego aside and change, too. The alternative is to continue missing out on billions of potential customers.

The article Time for Apple to Face Reality originally appeared on Fool.com.

Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple and owns shares of Apple, China Mobile, and Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.