Apple attributes growth slowdown to sluggish economy, rumors of new products
Despite posting $8.8 billion in profits and selling a record 17 million iPads, Apple's third quarter of fiscal 2012 is seen by the market as a disappointment. When asked what challenges the company faced during the quarter, a weak global economy and rumors of new products were cited by executives as two of the biggest headwinds faced by Apple.
Apple Chief Financial Officer Peter Oppenheimer said the poor economy in Europe had a particularly large impact on Apple's sales during the June quarter. In addition, resource-based economies in countries like Australia, Brazil and Canada also struggled during the three-month span.
Another issue is rumors of Apple's anticipated next-generation products, in particular regarding a sixth-generation iPhone.
"We're reading the same rumors and speculation that you are about a new iPhone," Oppenheimer said.
Apple Chief Executive Tim Cook said he has the sense that there is "incredible anticipation" for Apple's next generation of products. While he said he can't exactly quantify the effect rumors have had on sales, he said it's likely a "reasonable amount."
New product rumors also played a part in relatively flat Mac sales during the June quarter. The timing and availability of Intel's latest Ivy Bridge processors forced Apple to launch its latest MacBook Pro and MacBook Air models with just three weeks left in the third quarter, limiting sales in the three-month span.
Cook revealed that weekly Mac sales were actually down year over year before Apple's annual Worldwide Developers Conference, when the new MacBooks were announced. Sales of those new portables were so strong in the last three weeks of the quarter that it offset any reductions.
Apple also wasn't able to launch its third-generation iPad with Retina display in China until this month, as an ongoing trademark dispute with Proview stood in the way. Apple also had to wait for its new MacBooks to gain regulatory approval from China's government before they could go on sale.
Finally, Oppenheimer also cited a strengthening U.S. dollar as a factor that had a negative impact on Apple in the quarter. He said the dollar has improved against most currencies around the world, which has resulted in reduced revenue.
Though analysts may view Apple's third fiscal quarter as a disappointment based on market expectations, Apple executives insisted that they are pleased with the results they saw.
"We're very happy with how the business performing, and we're excited about the new product pipeline," Oppenheimer said.
And Cook said while rumors of new products may negatively impact sales of currently available devices, the ability of people to speculate is one of the hallmarks of free speech in the U.S., so he has no intention of attempting to stop those rumors.
"I'm glad that people want the next thing," he said. "I'm super happy about that... I'm not going to put any energy into getting people to stop speculating. I don't think that's going to amount to anything."
Apple Chief Financial Officer Peter Oppenheimer said the poor economy in Europe had a particularly large impact on Apple's sales during the June quarter. In addition, resource-based economies in countries like Australia, Brazil and Canada also struggled during the three-month span.
Another issue is rumors of Apple's anticipated next-generation products, in particular regarding a sixth-generation iPhone.
"We're reading the same rumors and speculation that you are about a new iPhone," Oppenheimer said.
Apple Chief Executive Tim Cook said he has the sense that there is "incredible anticipation" for Apple's next generation of products. While he said he can't exactly quantify the effect rumors have had on sales, he said it's likely a "reasonable amount."
New product rumors also played a part in relatively flat Mac sales during the June quarter. The timing and availability of Intel's latest Ivy Bridge processors forced Apple to launch its latest MacBook Pro and MacBook Air models with just three weeks left in the third quarter, limiting sales in the three-month span.
Cook revealed that weekly Mac sales were actually down year over year before Apple's annual Worldwide Developers Conference, when the new MacBooks were announced. Sales of those new portables were so strong in the last three weeks of the quarter that it offset any reductions.
Apple also wasn't able to launch its third-generation iPad with Retina display in China until this month, as an ongoing trademark dispute with Proview stood in the way. Apple also had to wait for its new MacBooks to gain regulatory approval from China's government before they could go on sale.
Finally, Oppenheimer also cited a strengthening U.S. dollar as a factor that had a negative impact on Apple in the quarter. He said the dollar has improved against most currencies around the world, which has resulted in reduced revenue.
Though analysts may view Apple's third fiscal quarter as a disappointment based on market expectations, Apple executives insisted that they are pleased with the results they saw.
"We're very happy with how the business performing, and we're excited about the new product pipeline," Oppenheimer said.
And Cook said while rumors of new products may negatively impact sales of currently available devices, the ability of people to speculate is one of the hallmarks of free speech in the U.S., so he has no intention of attempting to stop those rumors.
"I'm glad that people want the next thing," he said. "I'm super happy about that... I'm not going to put any energy into getting people to stop speculating. I don't think that's going to amount to anything."
Comments
This is a good article on the highlights, including the last minute comments from the conference call. It's interesting that Apple exceeded it's guidance and yet people aren't happy. Apple had record profits for this quarter and still people aren't happy. With the late introduction of the IvyBridge CPU, the new Macs were only available at the end of the quarter and barely made it a record quarter in Mac sales.
All this tells me is that the next quarters are going to be much better with all the product lines.
Quote:
Originally Posted by gatortpk
This is a good article on the highlights, including the last minute comments from the conference call. It's interesting that Apple exceeded it's guidance and yet people aren't happy.
People are accustomed to Apple blowing everyone away 7 times over.
It's only 4 times over this time.
That said, Apple doesn't need to give any reasons for any "slowdown." Why call attention to it? It's APPLE. This slowdown will be a faint memory a few quarters from now, when they'll be back to posting insane results.
Every company (including Scamsung) would LOVE to have that kind of "disappointing" quarter. All this means to me is yet another AAPL buying opportunity.
If there's only one thing I agree with is that everyone (including me) is waiting for the new stuff to come out. Wait for this quarter to finish. With the retina MacBooks, refreshed iMacs, and of course the new iPhone is going to please...
Of course, the analysts are going to project 1.21 gazillion devices... like they would know.
Quote:
Originally Posted by Quadra 610
People are accustomed to Apple blowing everyone away 7 times over.
It's only 4 times over this time.
That said, Apple doesn't need to give any reasons for any "slowdown." Why call attention to it? It's APPLE. This slowdown will be a faint memory a few quarters from now, when they'll be back to posting insane results.
Apple usually guide low so they can easily beat but when it is a miss means something went wrong
Samsung sells 10 million GSIII's in 2 months and everyone is blown away.
Apple sells 26 million iPhones in 3 months and it's their worst quarter in years. And let's not even discuss tablet sales.
Yup, Apple is sure doomed
Quote:
Originally Posted by sflocal
Every company (including Scamsung) would LOVE to have that kind of "disappointing" quarter. All this means to me is yet another AAPL buying opportunity.
If there's only one thing I agree with is that everyone (including me) is waiting for the new stuff to come out. Wait for this quarter to finish. With the retina MacBooks, refreshed iMacs, and of course the new iPhone is going to please...
Of course, the analysts are going to project 1.21 gazillion devices... like they would know.
I think apple will be just fine.
To me, there won't be trouble till an iphone launches and fails to outsell the previous launch (i.e. fails to set a new record). That's when the alarm bells will start ringing.
But i do not see that happening for a LOOONG time.
As for the analysts. Its the way the game works, miss their estimates and the stock goes down. Its the same rule for EVERY company.
If you ever needed proof that the markets aren't following company profits anymore and that they are deliberately engineering a recession for profit by short selling then this is it. Apple's shares drop when they post a profit which exceeds their projections and Microsoft's shares gained last week when they posted their first ever loss.
Just figure out how to deal with it, and move on.
Quote:
Originally Posted by Quadra 610
People are accustomed to Apple blowing everyone away 7 times over.
It's only 4 times over this time.
That said, Apple doesn't need to give any reasons for any "slowdown." Why call attention to it? It's APPLE. This slowdown will be a faint memory a few quarters from now, when they'll be back to posting insane results.
Actually, the odds of a Euro implosion are going up considerably, which would definitely affect European sales.
Quote:
Originally Posted by GadgetCanada
Samsung sells 10 million GSIII's in 2 months and everyone is blown away.
Apple sells 26 million iPhones in 3 months and it's their worst quarter in years. And let's not even discuss tablet sales.
Yup, Apple is sure doomed
yeah its 8.8B vs 5.9B
Quote:
Originally Posted by GadgetCanada
Samsung sells 10 million GSIII's in 2 months and everyone is blown away.
Apple sells 26 million iPhones in 3 months and it's their worst quarter in years. And let's not even discuss tablet sales.
Yup, Apple is sure doomed
If people expected Microsoft to sell 100 Windows Phones and they sold 1,000 the market would go ape. That's really how it works with these people.
Quote:
Originally Posted by GadgetCanada
Samsung sells 10 million GSIII's in 2 months and everyone is blown away.
Apple sells 26 million iPhones in 3 months and it's their worst quarter in years. And let's not even discuss tablet sales.
Yup, Apple is sure doomed
The difference is that the iPhone is the ONLY iOS phone whilst the Galaxy S3 is just one of a MULTITUDE of Samsung and Android devices available.
Do you understand the difference? Android phones outsell Apple phones by 3 to 1. It's no time to get complacent, it's really not.
If not suggesting one is better than the other - but most independents agree that the S3 is a genuine threat to the iPhone over time. I hope they come out fighting with the iPhone 5.
Quote:
Originally Posted by Shaun, UK
The difference is that the iPhone is the ONLY iOS phone whilst the Galaxy S3 is just one of a MULTITUDE of Samsung and Android devices available.
Do you understand the difference? Android phones outsell Apple phones by 3 to 1. It's no time to get complacent, it's really not.
If not suggesting one is better than the other - but most independents agree that the S3 is a genuine threat to the iPhone over time. I hope they come out fighting with the iPhone 5.
but do you get that android = many many manufactures while iOS = 1 = Apple
Apple still has single most popular phone in the world
Quote:
Originally Posted by Rogifan
Apple and Samsung are on different product cycles. The flagship device for each is probably always going to be 3-6 months newer/older. So Apple is a bit down when Samsung is up, and in Q4 Apple will probably post huge numbers and Samsung might be soft.
Well yes and no. Apple only has 1 cycle for phones while Samsung has many
Quote:
Originally Posted by anantksundaram
Boo hoo hoo. Stop whining about rumors, Apple. It's been that way for over a decade now, and it's worked out fine. Any other company would kill for that kind of attention and interest.
Just figure out how to deal with it, and move on.
I would agree with you. I know - don't laugh lol.
It's a bit lame to blame the rumours. We've had the same rumour mill around Apple products for many years.
I do have one criticism of Apple though. What I've noticed is that once one iOS device comes out the rumour mill shifts to the next likely upgrade. So in Jan/Feb it was all iPad rumours and then the March/April launch before things quietened down and the rumour mill moved on to the iPhone. If Apple had maintained it's annual update in June instead of Sept/Oct we would only have had one month's worth of rumours in May to put people off. But now we have May/June/July/Aug to stoke up all the rumours and put people off buying the current model. Four months instead of one. It's just a thought.
Quote:
Originally Posted by daylove22
Apple usually guide low so they can easily beat but when it is a miss means something went wrong
What "miss": They didn't "miss" THIER guidance.