Apple (NASDAQ:AAPL) announced quarterly iPhone shipments that were below some analysts' expectations, news that sent the company's stock down almost 5 percent in after-hours trading immediately following the announcement.
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Click here to see Apple's iPhone and iPad sales since the devices were first released. |
Apple said it shipped 26 million iPhones during its fiscal third quarter, way below the 35 million it shipped in the previous quarter and a far cry from Apple's gangbuster fiscal first quarter, when it sold a whopping 37 million iPhones. Apple's previous two quarters reflected the release of the latest model of Apple's iPhone, the 4S.
According to Dow Jones Newswires, analysts had expected Apple to report shipments of 28 million iPhones in its most recent quarter.
A slowdown in iPhone sales was somewhat expected, as the newness of the iPhone 4S wore off and potential iPhone buyers waited for the company's newer model, expected to be released sometime in the fall.
Indeed, Apple CFO Peter Oppenheimer acknowledged exactly that during the company's earnings conference call. He said that rumors and speculation of a new iPhone "has caused some pause in customers purchasing."
"We try very hard to keep our product roadmap secret and confidential, and we go to do extreme activities to try to do that," said Apple CEO Tim Cook during Apple's quarterly conference call. "That, however, doesn't stop people from speculating or wondering and will never do that. So, it's a great thing about this country, people can say what they think and so forth, and so, I'm not going to spend any energy trying to change that."
Cook said part of the slowdown in iPhone sales was also due to a balancing of the company's inventory of iPhones. He said that iPhone sales in the United States and China were relatively solid and not impacted by macroeconomic concerns, but that "the geography that did not perform well was Europe." He said concerns over the European economy slowed sales of the iPhone.
During the company's earnings call, Cook again addressed questions about carrier iPhone subsidies and lower-cost iPhone products. On subsidies, he said, "I think that the carriers will be motivated to provide that [the iPhone] to their customers." He didn't provide any specific commentary about subsidies and how they might change with the release of a new iPhone, which is widely expected to be released in the fall. The new iPhone is rumored to have a larger screen and LTE network technology.
On lower-cost products for emerging markets, Cook said, "I firmly believe people in emerging markets want great products," a sentiment he has offered before. He said Apple is focused on making good products, and if it can do so with lower prices the company will do that.
Still, even with the sluggish iPhone sales, Apple's finances remain above and beyond those of most other companies. Apple posted quarterly revenue of $35 billion and quarterly net profit of $8.8 billion. In the year-ago quarter, Apple reported revenue of $28.6 billion and net profit of $7.3 billion.
In Apple's upcoming quarter, the company forecast $34 billion in revenues and margins of 38.5 percent.
As for iPads, Apple reported selling 17 million of the tablets in its most recent quarter, an increase from the 11.8 million iPads it shipped in the prior quarter. Apple's iPad shipments were likely juiced by the release of the company's newest iPad iteration, which supports LTE networks. However, Apple executives said the new iPad did not arrive in China until the end of the quarter, which likely means that Apple's iPad shipments will get a boost in its next quarter from sales in China.
Finally, Apple executives offered an update on the statistics of the company's mobile ecosystem. Apple has sold 410 million iOS devices so far, and it counts 650,000 apps in its App Store, of which 225,000 are designed for the iPad. Apple has made $5.5 billion in payments to developers, and counts 150 million iCloud users.
For more:
- see this release
- see this Morningstar transcript
- see this Reuters article
- see this Wall Street Journal article
Special Report: Wireless in the second quarter of 2012
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