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Analyst: Apple iPhone profits have peaked

Posted: , by Alan F.

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Analyst: Apple iPhone profits have peaked
Have Apple's gross profits on the Apple iPhone peaked?

Have Apple's gross profits on the Apple iPhone peaked?

Pacific Crest analyst Andy Hargreaves cut his price target on Apple's shares this morning from $670 to $645. The problem, according to the analyst, is that gross profit margins on the Apple iPhone have peaked and are coming down. According to Hargreaves, the gross profit margin on the Apple iPhone 5 will be 38.8% this quarter. At its peak, Apple was able to generate gross profit margins above 40%. The analyst is cutting his earnings forecast for Q4 to $14.76 per share, from $15.28. For  fiscal 2013, Hargreaves now expects Apple to earn $51.49 per share, down from an earlier forecast of $53.36.

From the launch of the original Apple iPhone to the Q2 of 2012, Apple increased the amount of gross profit it made on each unit sold from less than $150 to $290. But for the first time since the iconic smartphone was released, during the third quarter, Apple earned less money for each unit sold and Hargreaves expects this figure to drop even more in the fourth quarter. Part of the reason behind the slumping gross profit per Apple iPhone sold is the inclusion of an LTE radio and a larger display for the latest variant of the handset.

Even with the trimmed price target and lower earnings estimates, Hargreaves still recommends the purchase of Apple's stock.

source: Forbes

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1. Mr.Mr.Upgrade posted on 26 Nov 2012, 15:20 14 3

The coming Android storm

28. joey_sfb posted on 26 Nov 2012, 18:01 3

No, ifanboy will pay for their iGarget at any price. Apple share will keep rising up.

38. Nadr1212 posted on 26 Nov 2012, 20:12

Ur best days (of the iPhone 5) r behind u, Apple!!!!!

39. PAPINYC posted on 26 Nov 2012, 20:36

No, your iBubble has burst!

Bienvenue à la morte Pomme de Apple!!!

2. PhoneArenaUser posted on 26 Nov 2012, 15:23 9

I was reading this article and decide to check how much iPhone 5 16GB cost in my country and without any contract iPhone 5 16GB todays cost is 1252 USD... Isn't it ridiculous? :D

8. LOTR12 posted on 26 Nov 2012, 15:37 4

What country do you live in? In my country(Bosnia) they rarely sell something Apple because it's too expensive(No offence iPhans).

10. PhoneArenaUser posted on 26 Nov 2012, 15:46 1

Lithuania ( http://en.wikipedia.org/wiki/Lithuania )

19. wendygarett (limited) 3 days ago posted on 26 Nov 2012, 17:05 2 1

Wow your country is a very nice place :)
I love it

29. PhoneArenaUser posted on 26 Nov 2012, 18:01 1

Thank you. :)

18. XPERIA-KNIGHT posted on 26 Nov 2012, 17:05

it is the best joke since Richard Pryor....

36. phil2n posted on 26 Nov 2012, 18:56 1

its going down down down down.... i love it

22. htc_prep posted on 26 Nov 2012, 17:41 4

i can believe that. people are scamming U.S. carriers and getting these iphones and selling them world wide for 1000-1500 and they are only paying 150- 450 here in the states collecting major profits.

24. XPERIA-KNIGHT posted on 26 Nov 2012, 17:45 4

lol its a dirty game indeed!.......but dont worry cuz apple is most definitely recieving its due, and once the world sees them come down a little, these black market setups wont be able to do what they are doing cuz the interest level will drop dramatically thus causing the price level to do the same...

to put it simple.......people wont really care for apple anymore.......not completely! but will, without a doubt, lose interest :)

27. htc_prep posted on 26 Nov 2012, 17:58 2

true indeed, but Apple wont put the pressure on Until the big 4 in the US (who market the device with a subsidy)put some pressue on Apple to impose UDID bricking on ESNs, imei, and udids that the carriers report as lost stolen or obtained fraudulently.

even though i dont use apple the allure to the products are there and its what that mainstream know as "it" so it will be some time before the hype dies completely

31. XPERIA-KNIGHT posted on 26 Nov 2012, 18:03 2

O of course i wasnt speaking of "over night" changes, just telling what the future holds for apple :)

and even right now! .......not neccessarily what we are talking about, but dont doubt for one second that apple isnt experiencing, right now, a portion of whats to come for them

32. wendygarett (limited) 3 days ago posted on 26 Nov 2012, 18:25 1

They are hired to do so... If I want an iPhone, I will hire the agent to line up at Cupertino, and ask the agent line up and shout like a sheep and say, hey look at me, I'm a first iPhone owner...

Most of the Cupertino liners don't shout it from heart... They shout it for profit from us :)

23. zuckerboy posted on 26 Nov 2012, 17:43

lol at my country ip5 costs 1600 $ :D

25. PhoneArenaUser posted on 26 Nov 2012, 17:52

What country do you live in? :)

30. zuckerboy posted on 26 Nov 2012, 18:02 1

Turkey :D and galaxy s3 750 $ :D

35. cretinick posted on 26 Nov 2012, 18:50 1

In my country (Brazil), the iPhone 5 don't arrive yet. But the 4S 16GB, in the Apple Store, cost ~960 USD.

41. zuckerboy posted on 27 Nov 2012, 05:25

we have no apple store in my country :D 4s 16 gb 1000 $ :D
but people doesn't complain about smartphones price :D galaxy s3 and iphone 4s sales like hot cakes :D

3. mas11 posted on 26 Nov 2012, 15:26 11

I agree. Hopefully this is the year WP becomes popular.

13. Just_a_boy posted on 26 Nov 2012, 16:22 2

We hope so, because M$ is burning cash in advertising, and the carriers are working to push Windows Phones sales.

4. user312 posted on 26 Nov 2012, 15:30 10

Apple's downfall begins........

7. Commentator posted on 26 Nov 2012, 15:35 4 2

If I had a nickel for every time I've seen someone post that exact phrase on PA (with a differing amount of ellipses at the end, of course), I'd have a sh*t-load of nickels!

Incidentally, if I had a nickel for every time I've posted what I just said above, I'd have two nickels!

9. androiddownsouth posted on 26 Nov 2012, 15:38 4 1

So true. I'm willing to bet when the chips are down, Apple will step up and come up with something pretty sweet. Until then, it's sue, sue, sue!

20. XPERIA-KNIGHT posted on 26 Nov 2012, 17:08 1

the only way they would be able to retain their glory would be to adapt to what and where technology is heading......in which is really a "pick your poison" type of situation, because adapting can also mean copying and we all know where copy cats end up..................................in the court room!

21. androiddownsouth posted on 26 Nov 2012, 17:20 3

I was just saying that I'm sure Apple is capable of coming up with cool stuff, but clearly their focus is not on doing that, and that can and likely will come back to bite them in the a$$.

26. XPERIA-KNIGHT posted on 26 Nov 2012, 17:53

...... :)

5. androiddownsouth posted on 26 Nov 2012, 15:33 1

WP8 is a quality phone. I really like the HTC 8X, and the OS is very user friendly and intuitive. A very worthy competitor, and the last coffin nail for BB, imo.

6. rusticguy posted on 26 Nov 2012, 15:34

As people get wiser with their money Apple profits are bound to come down. Since profist come down litigation will increase as apple wants money by hook or c(r)ook.

11. switza93 posted on 26 Nov 2012, 15:56 1 6

Apple< Android.... Plain and Simple

12. darac posted on 26 Nov 2012, 15:58 3

Of course Apple has to reach its peak.. it is how natural dynamics work and there is no exclusions.
But thinking that Apple will collapse any time soon is really foolish.
They have an unprecedented cash reserve that can do just pretty much anything

14. wendygarett (limited) 3 days ago posted on 26 Nov 2012, 16:23 2 2

I really enjoy this article :)

15. _Bone_ posted on 26 Nov 2012, 16:33 3

And they haven't even paid for the LTE patents, which they will.

16. rudlie posted on 26 Nov 2012, 16:44 4

bad analysis. apple share now up and approaching $600 again

17. bojan posted on 26 Nov 2012, 17:00 2

this what happens when there is no jailbreak for iphone 5 everyone damp iphone and no one buys anymore because iphone without jailbreak is like the old blackberry

33. cncrim posted on 26 Nov 2012, 18:31 1

what come up must come down. Fruit company need to come up new that revolutionary product and I'm sure they will. Average revolutionary come every 7-10 years, that mean we will still see the same old Iphone UI for next 2 years.

34. MC1123 posted on 26 Nov 2012, 18:36

ouch to apple!! hope they realize that buying iDevices will cost more global crisis!

37. InspectorGadget80 posted on 26 Nov 2012, 19:37

HAHAHA their stock drop a few dollars.

40. yajia1 posted on 26 Nov 2012, 22:31

That is why they are starting to get their profits in the court. Sue sue sue sue sue sue. And sue. Amd because American juries are all stupid. They are gonna win win win win win win. And win.

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