“Apple’s third quarter is typically its slowest. It’s sandwiched between the Dad-and-grad shopping season, and the back-to-school and iPhone launch. Yet Apple on Tuesday posted a quarter that most of its rivals would be ecstatic to report,” Shara Tibken reports for CNET. “Its revenue was a third higher than the same period last year. It sold 47.5 million iPhones, 35 percent more than a year ago. Sales in China more than doubled. And Apple said it would generate $49 billion to $51 billion in revenue in the current quarter.”
“Then Apple’s shares dropped 6.9 percent to $121.80 in after-hours trading, wiping away roughly $52 billion in market value,” Tibken reports. “Welcome to the world of Wall Street, a.k.a. the game of heightened expectations. Apple, by far the world’s most valuable company, plays by a different set of rules, one where investors aren’t impressed unless they see a blow-out quarter — every quarter. Instead of taking a victory lap, Apple CEO Tim Cook found himself on the defensive during the company’s quarterly conference call with investors.”
“For Apple — which also happens to have $203 billion in cash — more success leads to more questions,” Tibken reports. “It also means more ways to disappoint, well, just about everyone. ‘In a vacuum, Apple’s results were good,’ Wells Fargo analyst Maynard Um said. ‘However, relative to expectations, results and guidance were disappointing, particularly with respect to iPhone units.'”
Read more in the full article here.
MacDailyNews Take: Guess what? People know that new iPhones are coming in a couple months. The current iPhones are now 10 months old. People know to wait for the next-gen iPhones. Go figure.
Also, this is a “s” model year. Regardless of Force Touch and other improvements, the excitement simply won’t be the same as it was for Apple’s first properly-sized iPhones, the 6 and 6 Plus. Investors are worried, as always, about growth.
Apple’s iPhone 6/Plus penetration among iPhone owners is a mere 27%. That means there are 73% primed for upgrading to the iPhone 6s/Plus. And, that’s not counting those fleeing from fragmandroid to quality in ever-increasing numbers… PC sales have a far longer replacement cycle than smartphones, which turn over every two years (and even that’s declining rapidly with new carrier plans that do not lock subscribers into hardware for two years). And iPhone has 99% user satisfaction. Every year or two, there are hundreds of millions of iPhone users waiting to upgrade…
Apple Watch’s best month last quarter was the last month of the quarter, in June, as supplies finally hit stores and could begin to satisfy demand. Demand that is sure to grow as we approach the holiday shopping season.
“iPad Pro” (likely) and, indeed, true iPad multitasking for iPad Air 2 and newer (also to debut this fall), await in the wings, with iOS 9 set to arrive in a few months. Older iPads need not apply. Cue the first real round of iPad upgrades!
According to IDC, Apple’s Macintosh has 13.5% market share in the U.S. and 7.5% worldwide. Apple’s Mac has outgrown the PC market for the last several years. The Mac has headroom of a mere 86.5% in the U.S. and 92.5% worldwide.
We won’t even get into Apple TV, Apple Pay, or Apple Music, much less Apple Car.
There’s your growth.
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Apple pulverizes the Street with record third quarter results – July 21, 2015