Apple may face first profit drop in decade as iPhone slows

“Apple Inc. Chief Executive Officer Tim Cook is feeling the heat,” Adam Satariano reports for Bloomberg.

MacDailyNews Take: Is anyone worth upwards of $400 million really feeling any heat? Sure, you want to do well, but, if you don’t… let’s just say, you’ll never find yourself boiling Ramen noodles in order to save money for the rent.

“Eighteen months after taking over from Steve Jobs, Cook is facing rising production costs, competition from Samsung Electronics Co. and slowing growth in smartphones, threatening profits for the world’s most valuable company,” Satariano reports. “An earnings report tomorrow may show that fiscal first- quarter net income slipped 2 percent to $12.8 billion, or $13.48 a share, according to analysts’ estimates compiled by Bloomberg. In all except one quarter since 2003, profit has jumped more than 10 percent. Analysts project sales will rise 18 percent to $54.8 billion, the slowest growth rate since 2009.”

MacDailyNews Take: Gee, analysts, who are almost always wrong, predict a sales increase of only 18% — in this economy, no less — and $54.8 billion generated in three months. How, we ask, how will Apple ever survive in the face of such “competition” from convicted patent infringers?

Satariano reports, “Apple’s shares have dropped almost 30 percent since September, erasing about $190 billion in market value, on concern that demand for iPhones and iPads is ebbing.”

MacDailyNews Take: Baseless “concern.” Otherwise known as fomenting.

Satariano reports, “Apple probably sold about 48 million iPhones during the quarter, according to the average of analysts’ estimates compiled by Bloomberg. Analysts also predict Apple sold 22.4 million iPads, including both the iPad mini and the model with a larger screen, and 5.1 million Macs.”

MacDailyNews Take: Selling that many Macs will be difficult with new iMac models unavailable or severely constrained throughout much of the quarter.

Satariano reports, “Ben Reitzes, an analyst at Barclays Plc, said comments from Cook and Chief Financial Officer Peter Oppenheimer on a conference call with analysts following the financial results will be the company’s most important in years. Apple needs to address questions about iPhone demand as well as whether profit margins are tightening because of the cost of making new products, he said. Apple said in October that its profit margins were lower because of the cost of overhauling its product lineup.”

Full article here.

MacDailyNews Note: As usual, we will be covering Apple’s Q113 (Holiday 2012) quarterly conference call with analysts on Wednesday, January 23rd starting at 5:00pm Eastern. Look for the article to appear on our home page around 4:45pm Eastern tomorrow.

27 Comments

    1. What is really alarming is that Apple’s increase in quarterly profits may be diminishing.
      Talk like this is about the second derivative of a very fluctuation prone sequence of earnings.
      In other news, the YoY difference in 13Q1 and 12Q1 earnings at FoBr is expected to be 10% higher than before. What a breakthrough! Time for analysts to up their estimates! Except for the fact that 13Q1-12Q1 was negative. Not so with AAPL, on the contrary.

    2. Must be frustrating knowing that every time Apple’s profits fall a mere few percentage points or if Apple fails to meet outrageously speculative profit expectations that the prophets of doom come out of the wood work and Apple shares take a hit. If this bothers you, sell all your stock or shut up and man up.

    1. Anyone can look at the new iPad mini lead time and get the real story. ALL have a 1 week lead time. Apple can not keep up with demand. I hope Apple diverts some of the common parts and production lines to start meeting the demands.

      Anyone can see this and the share holders continue to be played. We will again hear, “We would have sold more if we could have made more.” What other company continues to make that statement with BILLIONS in the bank? Analysts, “Think Different” and stop looking like an clueless idiots or a con-artists!

      1. Exactly right!

        “…slowing growth in [Apple] smartphones…”

        Wait! I thought Apple was unable to keep up with iPhone demand! So any shortfall in sales is due to what? Less demand, or low production? Slower than expected growth in sales due to production not being able keep up with demand is a problem every company wishes it had.

  1. To put things into perspective, when Steve Jobs introduced the iPad on January 28th, 2010, a scant 3 years ago, he said that Apple had its first $15 billion Christmas quarter which translated to $50 billion annual revenues.

    Now barely 3 years later, Apple is scheduled to report $52 billion in quarterly revenue as projected by the CFO. This is in no way seen as losing.

    Scroll to the 3 minute mark where Steve announces Apple’s quarterly financial performance for 1Q 2010.

      1. I don’t what the fuck it is you’re talking about but what I’m saying is that Apple’s growth story has been very, very impressive and they are now making in one quarter what they used to make in a year.

        What the fuck has that got to do with past performance?

  2. Can we focus on the companies that are losing money and do a little bashing? Why punish the ones that are do well and praise those that are poorly managed! Why? Well, maybe these lackies are just doing there jobs for their under-the-table pay checks.

  3. Fear
    Uncertainty
    Doubt

    In full force. Apple EARNED thier way to the top. NOW every and all who mocked the tinker you computer maker wishes they had HALF of Apple’s problems.

  4. A slow in the rate of growth. Oh fuck they’re doomed! It’s not even as if the results will be the same. A growth rate of same percentage is still an increase because it’s a based on a higher base level. It occurs to me that Apple could sell a phone to everyone, drive everyone else out of business, and be selling upgrades to people and analysts would complain because they’re not growing. Apple need to get to work on selling to other planets if they want to keep these analysts happy.

  5. The only story I see here is twisting of the facts. Fact, Apple is making hell of a lot of profits. Fact, it has been doing so all through out one of the worst down times in the economy since the great depression. Fact, Apple sells at a premium while others give away there products so they look like they sell more. Fact, Apple is doing really well with sales all over. Fact, Apple Mac sales are up while PC sales are down for the last 3 years. So when you look at the facts, Apple is kicking some real big ASS and hasn’t looked back. What these ANALs should be concerned with is if Apple actually loses money. Making 54 Billion in a quarter is doing great in anyones books, and that’s another fact!

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