“Given the bad news Apple CEO Tim Cook had to deliver last week — about the first of what could be several consecutive quarters of declining iPhone sales — we shouldn’t be surprised that he tried to shift attention Tuesday from Apple’s falling revenues to the turmoil in the currency markets,” Philip Elmer-DeWitt reports for Fortune.
“According to Cook,” P.E.D. reports, “Apple’s anemic 2% revenue growth in the December quarter would have been more like 8% it hadn’t been for the rising value of the dollars Apple pays suppliers for iPhone parts and the falling value of the currencies that overseas customers use to buy those iPhones.”
“What should matter to investors is how management deals with the challenge. The company’s response so far has been to raise prices in markets where local currencies are weakening. As a result, Apple will probably sell fewer devices in those markets, but it should come out of the crisis with its profit margins intact,” P.E.D. writes. “And that, it seems, is what matters to Tim Cook.”
Read more in the full article here.
MacDailyNews Take: Apple just posted a $18.4 billion quarterly profit, the largest ever recorded by a single public corporation. We think the company will manage to survive past the current quarter’s tough compare in terms of iPhone unit sales.
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