“The trade-off was outlined yesterday when Apple said profit in the current quarter will be about $11.75 a share on sales of $52 billion. That compares with $15.49 a share on sales of $55.1 billion predicted by analysts surveyed by Bloomberg,” Satariano reports. “Gross profit margin, the proportion of sales left after deducting production costs, will fall to about 36 percent, the lowest level in more than four years, Apple said.”
Satariano reports, “Apple Chief Executive Officer Tim Cook has introduced a new iPhone and iPad, while updating the iPod and Mac computer lines. The overhaul stands to give Apple products an advantage against new phones and tablets from competing electronics makers, such as Samsung, which today reported record third-quarter profit on demand for its Galaxy smartphones. It also means rising production costs and narrower profit margins. ‘They are going to have a big holiday quarter, a big March quarter, and then you have to wonder after that,’ said Shaw Wu, an analyst at Sterne Agee & Leach Inc. ‘They could be doing this to address competition.’”
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MacDailyNews Take: Shaw might be wondering, but sane people are not.