19th Oct 11
Apple sales weaker than expected
by Sally Davies
Taking a bite: analysts believe iPhone 4s should have been released earlier
Taking a bite: analysts believe iPhone 4s should have been released earlier
Apple’s revenues increased to a new quarterly record of $28.27bn – a rise of 39 per cent – and profits went up by 54 per cent to $6.62bn, revealed its latest set of results.
However, weak iPhone sales in comparison with the previous quarter and relatively sluggish sequential growth in sales of the iPad tablet left analysts questioning whether it had made a mistake in not releasing its new smartphone sooner.
Tim Cook, who took over as the company’s chief executive in August shortly before the death of Steve Jobs, said that the company was delighted with an extremely strong finish in what has been an outstanding fiscal year. Mr Cook described the consumer response to the iPhone 4S as fantastic and said that his team is really enthusiastic about its product pipeline.
Apple sold 17.1 million iPhones during the quarter, a growth of 21 per cent over the previous year, but a fall from the 20 million sold in the previous quarter, which confirmed it as the largest smartphone business in the world. That title, however, could now be passed on to Samsung, its bitter rival, which is believed to have sold over 20 million smartphones during that period.
Apple’s chief financial officer Peter Oppenheimer blamed the drop on the comparison made with the release of the iPhone 4 a year before, and rumours ahead of the iPhone 4S’s release this month. However, Mr Cook predicted that the company will hit an all-time record in iPhone sales in the coming quarter, as analysts expressed doubts about the company meeting manufacturing targets.
Colin Gillis, an analyst at BGC Partners who lowered his share rating just days before, said that expectations for Apple were red-hot, which is why they downgraded it. He explained the reality is that their company is not an annuity and they need to sell a quarter’s worth of revenue each 90 days.
But Apple predicted that it will achieve a massive $37bn next quarter because it will add an extra week leading up to Christmas – something which it does once every six years in order to align its fiscal year with the calendar. Mr Cook insisted the firm’s progress in China was “strong” and said that he has never seen a nation with as many people joining the middle class and aspiring to own Apple products.
The company sold 11.1 million iPads, a year-on-year growth of 166 per cent, but sequentially it achieved only slow growth compared to the 9.2 million which were sold during the previous quarter. And the Macintosh computer line produced its best-ever quarter, with 4.9 million machines being sold worldwide, driving it above five per cent of PCs sold during a quarter for the first time in many years.
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