January 24, 2013
Market Recoils As Apple Announces Record Profits And iPhone Sales
Michael Harper for redOrbit.com — Your Universe Online
Last night, Tim Cook and crew gathered together to give their quarterly earnings report to an anxious group of analysts and investors. Tensions were high amidst recent reports that Apple would be cutting their component orders "in half" and that the company may soon release a cheaper version of their highly profitable iPhone to fend off competition.
“We´re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook in a press statement. “We´re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”
Analysts and investors had their eyes on iPad and iPhone sales going into the earnings call, worried that demand for these best-selling and profitable products has dried up. Apple announced they managed to sell (not ship) a record-setting 47.8 million iPhones in the quarter that ended on December 29th. This number is even larger than the 26.9 million iPhones they had sold in the previous quarter. And the iPad line also set a new record in the holiday quarter, selling 22.9 million compared to last year´s 15.43 million and 14 million in the previous quarter.
Though Apple managed to beat their own record in terms of iPhone sales, many analysts had expected Apple to sell anywhere from 48 to 50 million smartphones in the previous quarter. This slight miss has been blamed for some of the market´s negative reaction to their prodigious earnings call. Analysts had also expected Apple to sell some 22 million iPads last quarter, along with 5.1 million Macs. Apple was able to meet these expectations in iPad sales, but fell about 1 million short of this Mac prediction, selling 4.1 million in the previous quarter, down from last year´s 5.2 million.
Tim Cook insisted, however, that new iMacs, product constraints, a shorter quarter and the weak PC market are to blame for the slump in new Mac sales.
“So if you just take these three factors, they bridge more than the difference between this year´s sales and last year´s sales,” said Cook in the earnings call.
Some claim that Apple´s “flat growth” is causing investors to dump their shares quickly today, diminishing Apple´s market value. Gene Munster, analyst with Piper Jaffray, says that Apple´s iPhone growth simply reflects the rest of the market at large, noting that real growth is in emerging markets. According to Munster, this is where Apple needs to focus, building a cheaper iPhone specifically for these markets.
"It's confirmation of a trend," said Munster, indicating that the rest of the industry will soon be focused on these markets as well.