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Businesses Apple

Apple Profit Falls 22% But iPhone Sales Are Up 251

Posted by Unknown Lamer
from the everyone-needs-five-iphones dept.
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).
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Apple Profit Falls 22% But iPhone Sales Are Up

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  • Margin compression (Score:3, Insightful)

    by benjfowler (239527) on Wednesday July 24, 2013 @09:20AM (#44369951)

    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.

  • by earlzdotnet (2788729) on Wednesday July 24, 2013 @09:27AM (#44370011)

    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. 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

  • by poetmatt (793785) on Wednesday July 24, 2013 @09:33AM (#44370061) Journal

    tablet's are a partial novelty, but they do have a specific function; they replace the need for portable computing (notebooks, laptops, etc). To think that it's just some toy people purchase is extremely ignorant of the usage.

  • by Nadaka (224565) on Wednesday July 24, 2013 @09:41AM (#44370139)

    Its not a replacement for portable computing... Its a replacement for portable netflix, web browsing, and stupid little kiddie games/apps.

  • Re:Cynic...? (Score:5, Insightful)

    by mmcxii (1707574) on Wednesday July 24, 2013 @09:55AM (#44370263)
    While this article was brought to Slashdot for flame war fodder there is another reason this is news elsewhere. 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.

    I'm not one of these people who beat on the idea of capitalism but I do see it as a failing of the perception in that endless growth just isn't possible in the long term. Sadly it's endless growth that drives a majority of today's investors. Most of today's investors don't see their dollars as a building block to better companies with long term goals and good public relations, they see their dollars are something they need to "flip" fast to make it worth their time. That's been a failing of the Wall Street economy for several decades and it only gets worse as time trods on.

    Apple will take a hit because of this. It's not because they're technology is weak but because there is enough competition in their field that push investment dollars to the short term gains. And this isn't to say other players in the field aren't really offering anything but their long term outlook is secondary to what they'll offer up in the next quarter or two. Apple hasn't planted itself well enough as a long term solutions company to keep the market interested like IBM, Oracle and Microsoft did. They'll survive and maybe make a bigger comeback some day but they will have to suffer through this lull like every other market leader has to from time to time.
  • WTF? (Score:5, Insightful)

    by Udo Schmitz (738216) on Wednesday July 24, 2013 @09:57AM (#44370283) Journal

    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.

  • Re:Cynic...? (Score:2, Insightful)

    by Anonymous Coward on Wednesday July 24, 2013 @09:57AM (#44370293)

    Yes, you will have things like the weaker app market, however Apple is offering iPhones going back to the iPhone 4 yet which is free on contract. So while Apple still gets paid for that phone the amount they are making from the sales of the iPhone 4 and iPhone 4S to the carriers is likely significantly less than the iPhone 5.

    I'd suspect a lot of the increase in iPhone sales likely came on the lower profit margins for the iPhone 4 and 4S which would work to eat in to the overall profit of the company. Still they are making a decent margin and plenty of money, many companies would love either the nearly 20% margin or nearly 7 Billion in profits.

  • Re:I don't get it (Score:5, Insightful)

    by ericloewe (2129490) on Wednesday July 24, 2013 @10:06AM (#44370365)

    As much as I dislike Apple's products and philosophy, I absolutely hate Samsung's philosophy. In my experience, it's either copying (much more than would be reasonable) successful products or throwing tons of crap at the wall to see what sticks (the galaxy cameras come to mind). Either way, their products are designed to what seem to be very poor standards with atrocious quality control.

    Out of 11 Samsung products:

    Two were dead on arrival (Ativ Smart PC Pro, a camcorder whose model I don't recall) - they did turn on, but were not in a condition anyone would call useful (dead touchscreen and autofocus, random stability issues, not to mention the fact that the tablet's replacement, like all other units I've seen, had plastic covering one of the keyboard dock's pins and a misaligned speaker grille).

    One (40" LCD) developed some unusual dark areas on the screen.

    One (Refrigerator) suffers from an ice dispenser button that gets stuck if operated with a single finger, its shelves' plastic is cracking and there's rust developing on some parts of the outside finish.

    One (Monitor, Syncmaster 940BW) has a driver issue (seriously. Google it and wonder how it's possible...) under Windows 7 where a driver is automatically installed that includes a bad color profile that causes White to be displayed as Yellow in color-corrected applications, unless a different profile is manually chosen.

    One (Dual-SIM phone with crappy resistive touchscreen) was never a decent phone, but its touchscreen decided to crap out one day, for no apparent reason, making it impossible to use.

    Another phone (Wave I think it was called... ) was a phone whose hardware showed potential but was running Bada or whatever that OS was called. Not pleasant to use.

    Only 4 / 11 Samsung products never gave any reason for complaint (besides limitations that were obvious when buying it - like a screen that is at a fixed height - those were knwon and expected, so there's no reason to blame Samsung): Two 830 SSDs (one 128GB and one 256GB), another monitor (Syncmaster BX2450) and a Blu-Ray drive.

    I'm sure someone can give me a comparable amount of Apple horror stories, but I'd bet that most of them are actually limitations that one knows they're buying - like support for newer versions of OS X / iOS being a gamble. The products themselves don't tend to start failing in unpredictable ways, most failures are predictable, in my experience.

    tl;dr I won't be buying Samsung again anytime soon (and I wouldn't buy Apple anyway, so don't bother with that angle)

  • Re:Cynic...? (Score:5, Insightful)

    by Anubis IV (1279820) on Wednesday July 24, 2013 @10:19AM (#44370525)

    In addition to that, their product lineup has changed since a year ago. The iPhone 5 has significantly lower margins due to the higher cost of manufacturing than the iPhone 4S that it replaced, and the iPad mini, which they introduced to fend off competing small form factor tablets, has lower margins than its big brother. As you said, they've been advising investors right from the start that this would be happening.

    On top of that, the retina iPads were still recent in the year-ago quarter, so it's actually pretty astounding that sales were even as good as they were this quarter, considering that they haven't had a major product releases in any of their product lines (other than MacBook Air) for a number of months now. Typically they space product releases throughout the year, but they've acknowledged that they're going to have a packed autumn this year, which could work out for them since they'll likely have a number of new product releases going into the holiday season.

  • by Sockatume (732728) on Wednesday July 24, 2013 @10:39AM (#44370741)

    That's a bit like arguing that a computer's a terrible content creation tool because it's no good as a woodworking lathe or sewing machine. No, a tablet's no good for doing multi-track video editing. (Most single-display computers aren't any good at it either.) However it's a remarkable tool for gathering, organising and triaging information. (Papers, the science literature tool, is its killer app in my environment.) It's the swiss army knife of desk references. It's an x-windows client I can pass around at a scientific meeting. It's the world's least annoying way to deal with email.

  • right on the money (Score:5, Insightful)

    by SethJohnson (112166) on Wednesday July 24, 2013 @10:43AM (#44370779) Homepage Journal

    I'm not one of these people who beat on the idea of capitalism but I do see it as a failing of the perception in that endless growth just isn't possible in the long term. Sadly it's endless growth that drives a majority of today's investors.

    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".

  • by Andy_R (114137) on Wednesday July 24, 2013 @10:48AM (#44370827) Homepage Journal

    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.

  • Re:WTF? (Score:4, Insightful)

    by Anubis IV (1279820) on Wednesday July 24, 2013 @10:51AM (#44370853)

    Sorry, but HTC hasn't been able to keep up with demand for the One

    Sorry, but that's because they had manufacturing issues with the camera, not because demand is insanely high. In fact, sales [bloomberg.com] were below expectations [dailytech.com], causing them to lose a rank or two in the smartphone market, and the One's sales are actually expected to drop off sharply in the next quarter [gsmarena.com], which would lead to an even greater decline. The One had a lot of promise, but has failed to deliver on it.

  • by Anonymous Coward on Wednesday July 24, 2013 @02:13PM (#44372971)

    And the iPhone 5 obsoleted all of my accessories.

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