Apple Profit Falls 22% But iPhone Sales Are Up
New submitter marcushoward writes in with news of Apple's quarterly results. From the article: "Apple on Tuesday reported fiscal
third-quarter revenues of $35.3 billion and profits of $6.9 billion, or $7.47 per share. The revenue number is basically even with Apple’s results from a year ago, but its profits were off by almost $2 billion. Revenues were mostly in line with Wall Street’s expectations of $35.09 billion and slightly above its earnings per share expectation of around $7.31. Apple itself had predicted revenues between $33.5 billion and $35.5 billion."
Compared to this quarter last year, sales of Macs are about even, iPad sales dipped slightly (14.6 million vs 16 million), and iPhone sales are up quite a bit (31 million vs 26 million).
Apple (headline) profits fall, just as they are being asked to pay tax.
The industry analysts and pundits have been predicting this for ages: that while Apple led for ages, and reaped windfall profits as a consequence, there would be a stampede into the smartphone market, and Google would barge in, turn smartphones into a commodity, and crush Apple's margins. This is not a surprise. Happens in markets all the time, and had previously happened in the PC market, where nowadays, it's impossible to make serious money on PC hardware, and the only people selling parts are people happy to sell huge volumes on razor-thin margins.
What's interesting about this story, at least for me, is that iPad sales have tanked. Maybe that suggests that Android on tablets has matured somewhat from the early days of few, clunky tablet apps, and that tablets are commodities now too.
The Samsung Galaxy phone is better and any tablet in the world is better than the iPad. As soon as people realize it has no HDMI, no micro-SD port, and no USB port for flash drives, they can go spend 5x less on a tablet that can or get the vastly superior Galaxy tablet for the same price. My long time Apple fanatic roommate just dumped is iPhone 4 for a Samsung Galaxy and admitted it was far better. Plus, his 4's soldered-in battery just failed so I think there was a valuable lesson there too. So how could their device sales possibly be going up? And with Windows 8 out, how could their desktop sales be going down?
So, where did the extra costs come from?
Does it take so much more power to run the RDF after Jobs death?
Apple's cyclic not a steady force. I'm looking forward to the Liquid Metal Iwatch. I worry a bit about the smaller iphones. On the one hand they boost new sales in foreign markets (pity Nokia) and probably spike sales everywhere. But they will canibalise some new sales of the older higher margin phones. Or will they? perhaps they will have higher margins. Or perhaps people who save money on the smaller one will pick up an ipad. Or perhaps sales of the full sized iphone are saturated anyhow so there's little to canibalize. All I know is that they won't lose money!
Some drink at the fountain of knowledge. Others just gargle.
Apple joined PRISM in October 2012. If you buy an iPad/iPhone it spies on you for the NSA.
If you really believe the NSA is tracking 800,000 suspect terrorists (and growing) and not 800,000 mostly innocent people wrongly accused by an out of control General then good luck to you with that Apple kit. Perhaps you'll be lucky. Perhaps your particular Apple kit won't be used against you. Or perhaps you'll say something bad on Slashdot and be among the 800,000.
Let me predict the future.
A bill will be introduced that required remote turn on of the microphone and camera, perhaps as a 911 requirement. What if you are injured and managed to dial the number but not speak into the phone? Or some such ridiculous idea. You will have to watch what you say around your phone, in case the microphone is turned on, or the camera is watching you.
Why not just call the next Apple product an iTelescreen?
Apple changed the Appstore from a simple list view where users could scroll through hundreds of apps, ie buying choices to a STUPID SINGLE PAGE left and right where most users only ever scroll through about 5 apps most of which they have already bought.
I mean what absolutely stupid muppet thought this was a good idea????
Knocked more than 30% off of all app sales over night.
There's their problem in a nutshell.
Sheer genius!
rgds
Ooops. Apple is in deep shit now! They've committed the sin of actually investing in their company!
Wall street is going to break out the pitchforks! Shareholder lawsuits incoming! Better fire 20% of your workforce to keep those investors happy!
What's that? New iphone imminent? One that will be sold out for 6 months after it's release, just like all the previous iphones?
Nevermind. This is a hatchet piece designed to drive stocks down before the inevitable boom that comes post product release.
The Samsung Galaxy phone is better and any tablet in the world is better than the iPad.
Nothing against the Galaxy but "better" is a pretty ill defined term. For my Grandmother, who mostly wants to play solitaire and facetime with her grandkids, the Galaxy is a demonstrably worse choice. For your needs or mine it might be the better choice. "Better" depends on what you are doing with it.
As soon as people realize it has no HDMI, no micro-SD port, and no USB port for flash drives, they can go spend 5x less on a tablet that can or get the vastly superior Galaxy tablet for the same price.
There is a market for tablets with those connectors but it is, for better or worse, a minority. My several of my family members have iPads. Most of them would never use any of those ports and in fact most of them don't even know what an HDMI or micro-SD port is. That's not to imply that a tablet with those ports would be pointless. For someone like me they might actually be an attractive feature but I have no illusions that most iPad buyers would need or want them. Furthermore those extra ports add cost, complexity and opportunities for hardware failure. Furthermore there are other ways to accomplish things like file transfer, video display, etc without those ports so it is unclear why they would be necessary in most cases. You don't need HDMI to display video. You don't need USB to store or transfer files. I'm sure some people appreciate those ports but I'd wager a tidy sum that most of the time they go completely unused.
People are waking up and buying products from other manufacturers. Samsung's profits were up in the current reported quarter about $8.5B, guess at who's expense and the fact that Apple isn't doing well in China doesn't bode well for them.
Yeah, I think unless Apple comes out with a line of adult sex toys, it'll see profits fall. iVibrator anyone? What it'll have rounded edges!
Plus, it's lost the recent price fixing case in books, yet they'll appeal so I'd rate Apple as underperform.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
The industry analysts and pundits have been predicting this for ages
Ages huh? 15 years ago Apple was “beleaguered”
that while Apple led for ages
The iPhone went to market only in 2007. *Six* years ago, Apple was late to that game. It was only that the other players were caught with their pants down.
reaped windfall profits as a consequence
Their insane margins were more a testament of Tim Cooks logistics expertise, the reason Steve Jobs hired him.
Google would barge in, turn smartphones into a commodity, and crush Apple's margins
Maybe in bizarro land. Apples only competitor is Samsung. The rest of Android phones replace the feature phones of old.
the PC market, where nowadays, it's impossible to make serious money on PC hardware
Uhm, except for Apple?
What's interesting about this story, at least for me, is that iPad sales have tanked.
Tanked. Yeah, right. Yoy 16 to 14.6 million. With FQ3/12 being the quarter with the brand new retina iPad.
Wish /.mods would cut back on dope.
Which is better, iPhone or Android?
It depends on what your needs are. Apples mail client and calendar app are VASTLY superior to Android. You have to go all the way back to IOS ver 2 to have a worse mail client than Android 4.22. However, Firefox (and plugins) rock on Android. And Swype is a killer app.
For me, the decision to abandon my investment in IOS apps was easy when I went to a prepay phone. My Nexus 4 was half the cost of a new iPhone. The iPhone certainly is not twice as good.
This is excellent trolling, please mod up.
Here's to hot beer, cold women, and Glaswegian kisses for all.
1) 31.2 million iPhones sold...well ahead of estimates.
2) 14.6 million iPads sold...well below expectations.
Here's my theory on the iPhone sales. I think that many people had earlier models of the iPhone and when it came time to upgrade they decided to try Android phones, were unsatisfied, and switched back to an iPhone on the next upgrade cycle. Android has a lot of nifty features but I have to admit that the iPhone is a lot slicker and easier to use. For a lot of people, ease of use wins out.
I suspect we might see the same thing occur with the iPads in the near future. There are a lot of cheap Android tablets out there and most of them are crap. The exception being the Samsung Galaxy, which is very nicely done. I think that a lot of people that really wanted an iPad settled for a cheap Android tablet and are discovering that you get what you pay for.
This is also the reason why manufacturing industries in America have shipped their jobs overseas. Once a company has reached its peak growth in sales, leadership is under pressure from investors to continue to demonstrate growing profits. So, they look around and quickly seize on their own labor force as ballast.
The American workers are / were thrown overboard to expand profit margins and satiate investors' demand for "growth".
$5 / month hosted VPS on linux = awesome!
I wonder how many people are in the same situation as I am? I'm a self confessed Apple fanboy, but there just wasn't much reason for me to give Apple any money last quarter.
I won't replace my iPhone 4 just now because there is bound to be a new model along soon. I can't replace my 2008 MacPro because they don't sell them in Europe any more, and even if they did, it would be foolish to invest in another cheesegrater when the black bin has already been pre-announced. I like the idea of a tablet, but I'm waiting on the inevitable retina iPad mini. For me Apple isn't tanking, they are just deferring revenue.
A pizza of radius z and thickness a has a volume of pi z z a
using anything other than MacOS on the desktop/laptop right now, but as Jobs himself once said, the post-PC era is upon us, and weirdly, that's where Apple is struggling a bit. After a burst of market innovation during the second half of the '00s, they've basically said "pass" the last several product cycles.
My first iPhone absolutely floored me and there was nothing else like it on the market. Same with my first iPad. But early this year I replaced my iPhone 4 with a Samsung Galaxy Note simply for features reasons (large display, widgets) and ended up going with a 7-inch Galaxy Tab rather than an iPad mini because the Galaxy tab can be had for less than half the price but offers "good enough, similar enough" functionality to the iPad Mini for me.
If Apple wants to stay on top of the post-PC game, they're going to have to:
(1) Tackle the mid-level market more directly or at least differentiate themselves from it, and
(2) Pay attention to the features that the market is paying for
I'm a big believer in Apple quality and Apple design, and in the Apple ecosystem, so it's a bad sign that right now (a) there is no iPhone that I prefer to this hunk-of-junk Android phone whose quality pales in comparison, and (b) the price difference in other lines is so significant (more than 2x — $180 for a Galaxy Tab w/40GB and higher display density but just-as-good build quality out the door at retail, vs. $350 for an iPad Mini w/16gb) that I just can't justify the Apple premium.
STOP . AMERICA . NOW
What it comes down to is that businesses, regardless of actual profit, are largely looked on as weak by investors if they're not showing growth.
Apple did show growth - 1%. That's after about half a year with no new products introduced. And of course there are a large array of things coming up in the fall, you'd have to be a fool to not see the real growth has merely been displaced.
Apple will take a hit because of this.
Stock's higher than it has been in weeks. Even institution investors cannot continue to ignore the growth ahead.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Fuck, they've hardly got any reason to even bother staying in business any more.
Comment removed based on user account deletion
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What's interesting about this story, at least for me, is that iPad sales have tanked. Maybe that suggests that Android on tablets has matured somewhat from the early days of few, clunky tablet apps, and that tablets are commodities now too.
No, it rather means that people are finally understanding that a tablet is a novelty.
No. You are being subjective here. What is a novelty for some (you), it is a commodity for others.
The only time I hear someone talking about how great their iPad (or other tablet) is when they are talking about how much their (less than 10 year old) kid enjoys it
So, it is a commodity then. It has a function, though not one that was originally envisioned (and which goes in tandem with typical definitions of marketable products as items with potentially alternative uses.
Also, how many people (ordinary people that is, not of the otaku kind) talk how great their laptop is, or their lawnmower, or car, or I dunno, vibrator? In opposition to your original premise, when things stop being a novelty and yet retain some time of value or alternative usage, then it becomes a commodity, an item that renders some utility and value that you now take for granted and yet you wish to keep.
For me, I rarely use my either laptop or development desktop at home anymore (both development environments with relative powah!). I simply use my tablet to do what I typically used to do with a laptop or computer at home before - consume information, email, facebook, banking, tracking my sells and purchases on ebay, amazon and gunbroker.com, reading my kindle books, etc.
I've also find my internet consumption more productive since the restricted nature of a tablet prevents me from engaging in thread discussions (compared to the rate I used to before I had a tablet.) One thing that certainly has suffered is my rate of producing content (blogging, mostly.)
It is no longer a novelty, and it has become a commodity, and quite an invisible one to say the least. I've seen other people engaging in similar patterns of media consumption with their tablets (be them ipads, galaxy tabs or whatever.)
And I never really talk about how awesome my tablet is. I don't think I ever did even when the technology was just a novelty. People who have tools that they use successfully and transparently for doing things that are now part of their mundane, daily lives, they don't talk about them. That's a fanboi geek trait (from a particular view of geekery), not a trait of general living.
Max Keiser @maxkeiser 14m
Apple could move manufacturing to U.S. and pay workers in $50 bucks an hour and still have more than $100 bn. in cash sitting idly in bank.
If you compare a quarter just after a new iPad model was introduced to a quarter where the last new iPad model is anticipated in the near future.
How could it be otherwise? What is interesting or meaningful about that?
The real story here isn't about the lower revenue or the increase in iPhone sales. The real story here is the drop in iPad sales. in a time where tablets are supposed to be eating the PC's lunch, the iPad is dropping in sales faster than the PC. Why wasn't that the headline?
Does Airplay and iCloud make the user dependant on outside services, or a protocol being ubiquitous? Taking something that already exists and making it seem new is sad. Sorta like when compressed music files became iTunes and sending them over an interweb connection became a podcast... decommoditizing -> Monetization - the new genius. Seems Aapl users are guided into a dependant role whereas connectors (predictable ones like HDMI and USB) guide a user into a more adaptable usage. Did they really need to change the base connector? How did that make everyone feel? Sure the predictability of the iOS experience is tightly controlled, and perhaps is more stable, but, co-opetition is better for an evolving ecosystem. Having replaced the earphone jack on iPhone 4s, I've not been impressed by the Design-for-manufacture. Modularity could be much better. Might Android be buggier? Shame on Googles development process. Is seems like another Cathedral vs. Bazaar story...
Time for a new Political party in the US (or two!) One is off the rails Other cant pony up a leader.
Probably the most impressive thing about the report was that mac sales were flat...which doesn't seem impressive until you realize how much the rest of the industry is shrinking.
Monstar L