Apple blames earnings miss on next Apple iPhone and weak economy

Apple blames earnings miss on next Apple iPhone and weak economy
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.

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



1. sudbury78

Posts: 136; Member since: Jul 12, 2012

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

2. SugarShockFrantic

Posts: 73; Member since: Jul 05, 2012

hmmmmmmm.....HAHAHA APPLE SUXS!

24. cheetah2k

Posts: 2227; Member since: Jan 16, 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..

31. andro.

Posts: 1999; Member since: Sep 16, 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

33. darac

Posts: 2156; Member since: Oct 17, 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.

34. dudeyoureabarista

Posts: 16; Member since: Jun 24, 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...

28. archangel9

Posts: 233; Member since: Feb 07, 2010

yes they do LOL.

3. SonyFTW2020

Posts: 311; Member since: May 03, 2012 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

35. randomguest

Posts: 20; Member since: Jun 26, 2012

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

4. Ubi2447

Posts: 131; Member since: Feb 14, 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

5. mas11

Posts: 1034; Member since: Mar 30, 2012

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

8. Ubi2447

Posts: 131; Member since: Feb 14, 2012

Lol it's so true.

14. ekia007

Posts: 61; Member since: Feb 27, 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.

36. randomguest

Posts: 20; Member since: Jun 26, 2012

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

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.

7. lubba

Posts: 1313; Member since: Jan 17, 2011

Nothing is recession proof.

9. CX3NT3_713

Posts: 2349; Member since: Apr 18, 2011

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

10. tobym6

Posts: 9; Member since: Jul 19, 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.

12. SonyFTW2020

Posts: 311; Member since: May 03, 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

16. fanboy

Posts: 38; Member since: Mar 07, 2011

Baa baa

11. ekia007

Posts: 61; Member since: Feb 27, 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!!!


Posts: 30; Member since: Jul 24, 2012


13. tobym6

Posts: 9; Member since: Jul 19, 2012

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

15. InspectorGadget80 unregistered

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.

18. -box-

Posts: 3991; Member since: Jan 04, 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: Link is relevant.

19. AndroidShiz

Posts: 154; Member since: Nov 08, 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.

20. wendygarett unregistered

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


Posts: 30; Member since: Jul 24, 2012

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

22. ilia1986 unregistered

The bigger they are - the harder they fall. I hope Apple falls hard. :)

23. Jay_F

Posts: 236; Member since: Nov 29, 2011


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