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Apple blames earnings miss on next Apple iPhone and weak economy

Posted: , by Alan F.

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Apple blames earnings miss on next Apple iPhone and weak economy
"Clearly it was a disappointment. We expected a lot of consumers will probably delay their upgrade and their purchases until the iPhone 5 comes out. We saw a similar trend occur last year with the iPhone 4S."-Channing Smith, Co-Manager of Capital Advisors Growth Fund
Now that the dust has all settled, and Apple stockholders are 5.51% poorer (less wealthy?) than they were at 4pm EDT, what were the factors that led to Apple's shortfall in its fiscal third quarter earnings? An earnings miss is a rare thing for Apple because the company is known for dragging down expectations so low that it can handily beat them when the numbers are reported. For the just announced fiscal third quarter, Apple 'guided' the analysts toward a prediction that 28 million Apple iPhones would be sold in the period, but Apple could manage only 26 million.sales of its handset. That was a sharp decline from the 35 million sold in the prior quarter.

Apple CEO Tim Cook blames the shortfall on the poor economy in Western Europe which has led to lower consumer sales, and the drop in sales from Apple iPhone buyers waiting for the launch of the next model. The 6th generation of Apple's smartphone is expected to get a major makeover with a larger 4 inch screen, LTE connectivity, increased RAM (1GB) and a quad-core processor. Some say this update merely allows the Apple iPhone to catch up with Android models, most of which already have a 4 inch or larger screen and a 16:9 aspect ratio, 1GB of RAM and LTE connectivity.

Apple CEO Tim Cook

Apple CEO Tim Cook

If part of the earnings shortfall was due to those waiting for the next iteration of the iPhone to appear, wouldn't this have shown up last year as well? During Apple's fiscal third quarter earnings report in 2011, the company reported selling 20.3 million Apple iPhones versus at least one analyst's expectations of 17.53 million units. The stock soared nearly 6% on that news.

Apple feels that the poor overseas economy is making things difficult. CFO Peter Oppenheimer said, "The economy in Europe is not doing well. We think this impacted our results." Revenue in the Asia Pacific area which includes China but omits Japan, dropped 22% from the prior quarter, to $7.9 billion. CEO Tim Cook blamed that decline on "changes in channel inventory" in sales of the Apple iPhone in the Greater China region which includes Taiwan and Hong Kong. Cook also blamed the "normal seasonality after the very successful iPhone 4S launch."

As usual, Apple lowered the bar for Q4, although perhaps by a larger amount than usual. The tech titan now expects fourth quarter earnings of $7.65 a share, well below analyst's current estimate of $10.23 a share. Apple sees revenue at $34 billion vs. analysts' call for $38.03 billion in sales for the next quarter.

source: Reuters

38 Comments
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posted on 24 Jul 2012, 22:00 5

1. sudbury78 (Posts: 129; Member since: 12 Jul 2012)


Let the android robots commence their uneducated comments... In 5...4....3.....2....1

posted on 24 Jul 2012, 22:05 15

2. SugarShockFrantic (Posts: 73; Member since: 05 Jul 2012)


hmmmmmmm.....HAHAHA APPLE SUXS!

posted on 25 Jul 2012, 00:01 4

24. cheetah2k (Posts: 816; Member since: 16 Jan 2011)


Samsung have sold 10M+ SGS3's. This is the net impact, as well as the fact Apple's up-coming iPhone 5 seems not to be an "innovative" product..

posted on 25 Jul 2012, 03:36 5

31. andro. (Posts: 1954; Member since: 16 Sep 2011)


Certainly,iphone sales have been lower than predicted at 26 million and much lower than the previous level of 35 million. Are the sleeping ifans awaking from their apple induced coma,it seems so. Personally in the mobile industry I've seen a large amount of people upgrading from their 3gs or iphone 4 to one of the current top androids,as well as a massive amount of first time smart phone buyers choosing android were a few years back it would have been apple. The iphone has remained stagnant,many iphone users are starting to see this,there has been a fair amount of dismay at the very small changes in ios 6 from ifans and the next iphone by the looks of it is essentially an iphone 4$ with a larger screen and perhaps simmer. All this combined with the rapid advancement and leading design,software and hardware of android is seeing iphone starting a decline

posted on 25 Jul 2012, 06:09 1

33. darac (Posts: 2156; Member since: 17 Oct 2011)


This.

As for Apple's excuses, it's the same old reality distortion - weak economy didn't stopped Samsung's high end lineup from steep growth in sales.

posted on 25 Jul 2012, 10:30 1

34. dudeyoureabarista (Posts: 16; Member since: 24 Jun 2012)


Apple says their sales decreased because of the Galaxy line. Now, they're saying it's because of the weak economy. Seriously make up your mind...

posted on 25 Jul 2012, 01:47 1

28. archangel9 (Posts: 230; Member since: 07 Feb 2010)


yes they do LOL.

posted on 24 Jul 2012, 22:09 8

3. SonyFTW2020 (Posts: 305; Member since: 03 May 2012)


hahahaha.....you know, its amazing how apple is suing android for copying and all kinds of other stuff, but take a look at what the new iphone is supposed to have, a 4in screen! Who are they copying? none other than android my friends. The new iphone will look "prettier" but we ALL know that unless they reshape their entire os to look and perform like android, it will be like putting new tires on an old car :(

But apples slogan should be "When you got em, You got em". Basically all apple has to do is polish up the hardware a little bit and give it a new name, and BAM! people go "WOOOOOW, this is the best phone ever!!" .....well at least thats what majority of the women are saying :(

Iphone = womens phone

posted on 25 Jul 2012, 22:08

35. randomguest (Posts: 20; Member since: 26 Jun 2012)


What does it matter to us? We can have our Android phones regardless of their sales :P

posted on 24 Jul 2012, 22:17 7

4. Ubi2447 (Posts: 131; Member since: 14 Feb 2012)


I see the blind Apple Fanboyisms have begun early.
It would have nothing to do with the fact that everyone was wishing that iOS6 was something worth buying an iPhone for.
Apple could put out a phone made of gold and a screen of diamond, but if it's the same OS that we've been looking at for the past 5 years then I'm not interested. Have fun with no stock turn-by-turn. :P

posted on 24 Jul 2012, 22:25 19

5. mas11 (Posts: 1029; Member since: 30 Mar 2012)


Aww Tim Cook is continuing Steve Job's legacy of blaming others when it's their own fault. You're buying it wrong!

posted on 24 Jul 2012, 22:27 7

8. Ubi2447 (Posts: 131; Member since: 14 Feb 2012)


Lol it's so true.

posted on 24 Jul 2012, 22:47 11

14. ekia007 (Posts: 61; Member since: 27 Feb 2012)


Who is going to buy the product that has the same design? Nobody really care your additional feature with "S" at the end. We want new design, new function & etc... There is no doubt that majority of users want to switch to Android because of lack of innovation. Who care your Siri ? It would be weird to use at public. Besides, Siri is not as good as Google NOW.

posted on 25 Jul 2012, 22:23

36. randomguest (Posts: 20; Member since: 26 Jun 2012)


LOL @"You're buying it wrong", thanks for the laugh :P

posted on 24 Jul 2012, 22:26 10

6. MeoCao (unregistered)


At first glance Apple's sales was up from last year, but we should not forget that iPhones now has far more selling agents than last year too. All big carriers in US, China...

Weak economy, really? looking at GS3 sales I think people are doing just fine.

posted on 24 Jul 2012, 22:26

7. lubba (Posts: 1310; Member since: 17 Jan 2011)


Nothing is recession proof.

posted on 24 Jul 2012, 22:36 10

9. CX3NT3_713 (Posts: 1901; Member since: 18 Apr 2011)


Weak sells due to OUT OF STYLE!!!! ifhones aren't cool anymore lol

posted on 24 Jul 2012, 22:38 3

10. tobym6 (Posts: 6; Member since: 19 Jul 2012)


Oh man making more money than anybody and being debt free is a bad thing? A year old phone still selling more than the S3. I think Apple will be just fine, and in 2 months all sales records will be crushed again.

posted on 24 Jul 2012, 22:42 8

12. SonyFTW2020 (Posts: 305; Member since: 03 May 2012)


yea buying the new iphone is like going to a carnaval for a hot dog year after year except strangely you do something you never did before this year, you turn around and see they're severing stakes on the other side... :(

android ftw..... again

posted on 24 Jul 2012, 22:55 1

16. fanboy (Posts: 38; Member since: 07 Mar 2011)


Baa baa

posted on 24 Jul 2012, 22:41 9

11. ekia007 (Posts: 61; Member since: 27 Feb 2012)


Of course, because you, Apple, introduces new iPhone every 2 years. Don't add "s" to your every iPhone model with additional feature. I bet no one wants it. Apple you are lack of your innovation compares to other competitors. You don't what customers want. Because of losing sales, doesn't mean you have to sue over patent on your competitors. Overall, Apple products are suck!!!

posted on 24 Jul 2012, 22:57

17. SEUL8TR (banned) (Posts: 30; Member since: 24 Jul 2012)


Agreeeee.

posted on 24 Jul 2012, 22:45 3

13. tobym6 (Posts: 6; Member since: 19 Jul 2012)


I hope the next iPhone is better than ekia007's grammar skills.

posted on 24 Jul 2012, 22:55 4

15. InspectorGadget80 (Posts: 6497; Member since: 26 Mar 2011)


And Apple greedily ask court to force Samsung 2 billion dollars just because no one isnt buyingba lot of iphones/ipads just to keep up their poor stock.

posted on 24 Jul 2012, 22:58 6

18. -box- (Posts: 3797; Member since: 04 Jan 2012)


In short, consumers are aware of choice, and are not choosing the iFail. Voice assistant gimmick doesn't outweigh the stale design, limited OS, outdated UI, and crummy user restrictions.
I see Windows Phone 8 taking apple's position as number 2 behind Android in the next two years.
Also:http://theoatmeal.com/comics/apple. Link is relevant.

posted on 24 Jul 2012, 23:11 3

19. AndroidShiz (Posts: 145; Member since: 08 Nov 2011)


They somehow forgot to mention the elephant in the room that is also dipping into their earnings....... ANDROID. Let's just be real here.

posted on 24 Jul 2012, 23:17 7

20. wendygarett (unregistered)


As expected... European is giving up overpriced iPhone...

posted on 24 Jul 2012, 23:28 2

21. SEUL8TR (banned) (Posts: 30; Member since: 24 Jul 2012)


The world should be
giving up on the midrange good for nothing restricted
hyped overpriced phone.

posted on 24 Jul 2012, 23:52 5

22. ilia1986 (unregistered)


The bigger they are - the harder they fall.

I hope Apple falls hard. :)

posted on 24 Jul 2012, 23:59 2

23. Jay_F (Posts: 236; Member since: 29 Nov 2011)


Dumb.

posted on 26 Jul 2012, 16:52

37. SugarShockFrantic (Posts: 73; Member since: 05 Jul 2012)


teehee...Applesauce :P

posted on 25 Jul 2012, 00:15

25. remixfa (Posts: 13907; Member since: 19 Dec 2008)


so if its "the bad economy", how comes Samsung is raking in the dough like a mad mutha?? If everyone is "waiting for the i5", then how comes the i4s has been its biggest seller to date, which puts more people in contract?

More like 3.5 inches and a 3 yr old design with a nearly unchanged 5 yr old OS is played out. Dont forget about all the negativity coming out of Apple with these crazy rectangle lawsuits.

All the biggest "non iphone" smartphone sales have been 4.3 inches and up. I wonder if its pure coincidence.

posted on 25 Jul 2012, 00:17

26. bransablan (Posts: 22; Member since: 19 Jul 2012)


The big question still remains, we know what the new iPhone will be sporting, 4" inch screen, 4g lte, and other goodies that many Droid phones already have... but the big question is this it for apple? How much innovative can you say you.are if you are still catching up.to what's been out...? I'm not an iPhone hater nor a Droid hater just facing facts, the iPhone 5 or iPhone lte will be a phone everyone wants but with s3 already making a big run on customers and also with impatient customers still coming in stores to get the 4s only a decent amount of people will be eligible for their upgrade come iPhone 5 launch...

Where does apple go after the iPhone 5?...

posted on 25 Jul 2012, 00:36 2

27. achangavi (Posts: 21; Member since: 25 Jul 2012)


in Asian countries like India, the iphone 4s sells for about 45,000 INR
in contrast to the galaxy sII, which sells for 26,000, and the galaxy sIII, which sells for 38,000

do the math.

posted on 25 Jul 2012, 02:13

29. TheLibertine (Posts: 484; Member since: 15 Jan 2012)


It goes so:
- If Android fails, (look at the statistics of people interested in buying a Galaxy SIII and an iPhone - two percent against fifteen or seventeen) the fanboys find explanations for it, in much cases they are quite weak. While the Android manufacturer itself has no excuse whatsoever. But everybody is happy.
- If Apple kinda fails, Cook gives a very good explantation (yes, people know when the next iPhone will launch an aren't that stupid) then Android fanboys start to flame like hell. Everybody is happy again. You are just ridicolous.

posted on 25 Jul 2012, 05:58 1

32. akita256 (Posts: 80; Member since: 26 Jan 2012)


Seems Apple is just playing catch-up all right to the other phones already out there. No creativity any more it seems. And of course, they would never see what they are doing as copying the other phone makers!!! What a joke!

posted on 26 Jul 2012, 18:32

38. .TRADE.MARK. (banned) (Posts: 4; Member since: 26 Jul 2012)


hellllo

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