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Apple results disappoint despite record iPhone sales

by Mark Tyson on 28 January 2014, 11:30

Tags: iPhone, iPad

Quick Link: HEXUS.net/qab75j

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Apple shares have dropped as much as nine per cent in afterhours trading following the Cupertino firm's publishing of financial results and projections yesterday evening. The stock market is all about expectations so while the most recent quarter results were better than had been expected in some ways, with a record 51 million iPhones sold, profits had remained flat and the outlook was reported to be weak.

China provides few fireworks

We reported upon the Apple and China Mobile deal just before Christmas. This was supposed to be a huge opportunity for Apple as it could tap into that network's 750 million subscribers. At the time the FT reported upon the "billions of dollars in extra iPhone revenues," that could be gained. At the time of the China Mobile deal confirmation the company chairman, Xi Guohua, told us how "Apple’s iPhone is very much loved by millions of customers," but it looks like love doesn't help pay the bills...

Apparently enough time has passed since the China Mobile deal for valid estimates of how things will progress in the coming quarters. An analyst speaking to Reuters said that Apple's shipments to China Mobile have been "lower than almost anybody expected". The same analyst added that worldwide the premium smartphone market is saturated. Without the growth prospects in China (and elsewhere) it is thought that Apple's share price is too high.

iPhone 5c - what does the 'c' stand for?

The iPhone sales figures weren't broken down for us to look at. We know that the total figure of iPhones sold was a record 51 million, which was unfortunately four million less than analyst expectations. Also with shortages of the iPhone 5S model reported in recent months it's obvious the iPhone 5c is to 'blame'.

AppleInsider reports that Tim Cook offered some explanation of the negative impact of the iPhone 5c during the earnings conference call last night - by being positive about the iPhone 5S - "I think the 5S, people are really intrigued with Touch ID," said Cook. "It's a major feature that has excited people. And I think that associated with the other things that are unique to the 5S, got the 5s to have a significant amount more attention and a higher mix of sales." There are rumours of the iPhone 5c being scrapped this year in a recent WSJ article.

Other key figures from last night

Apple sold a record 26 million iPads globally in the quarter to January - China helped that figure along with iPad sales doubling during the period. Also 4.8 million Mac computers were sold during the full year with the iMac and MacBook Air contributing most to that growth from 4.1 million the previous year. The most negative result, but not unexpected, was the iPod sales slump of 52 per cent year-on-year.

Apple has a number of possibilities to pick itself up from the flat-growth prospect we saw last night, these include; the upcoming iWatch, or a living room conquering Apple TV 2 and/or the possibility of becoming a big mobile payments and advertising company.



HEXUS Forums :: 4 Comments

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yeah, i can see how over $4 billion a month in profit is a bit low LOL
Boon72
yeah, i can see how over $4 billion a month in profit is a bit low LOL
It is a disappointment if the analysts were all expecting $8bn+/month.

Apple has … the possibility of becoming a big mobile payments and advertising company.
Oh great - just what the (online) world needs … more adverts! :wallbash:

The online payments stuff is probably more useful, but only if/when Apple get over their “the only game in town is us” mindset and make whatever service they're trying to sell universally available.

Think the article has got it right - the high-end smartphone market is a LOT more cut-throat these days and I think that perhaps Apple is trading on it's name (and past glories) rather than on any noticeable technical superiority. Read a good article the other day comparing the latest from Apple, HTC and Samsung and the conclusion was that there were standout aspects of each phone, but all things considered, they were pretty evenly matched. Ditto with middle- and high-end tablet market - it's impossible to select a clear “winner”.

High-end market's getting pretty dull as a result imho, and the interesting stuff is happening at lower price points. More about value-for-money than any real technical advance.
It isn't really so much about the phone as the supporting synchronising infrastructure - Apple iCloud, Microsoft's one drive or Googles. er… whatever its called, or blackberry's - afgain, whatever its called.

Which one do you distrust the least?
“I think the 5S, people are really intrigued with Touch ID,” said Cook. “It's a major feature that has excited people. And I think that associated with the other things that are unique to the 5S, got the 5s to have a significant amount more attention and a higher mix of sales.”

The phone reads my fingerprint… that's not exactly new, or exciting. It's the design that sells iPhones and the minimal price difference means it's unsurprising that the 5C flopped (in my girlfriends words “it looks crap”). Tim Cook doesn't need me or anyone else to tell him that.