Apple’s price fell below $600 within one day of selling for the first time since July, following a disappointing earnings report on Thursday and lower-than-expected projections for the company’s profit margins for the December quarter, Mashable reports.
Apple CEO Tim Cook told analysts on a conference: “The latest iPhone 5 was heavily backlogged but the company had mostly worked out kinks in its supply chain.”
According to Reuters, Apple Inc. shipped 26.9 million iPhones in the last quarter, more than anyone predicted, but sold only 14 million which is well below any forecasts for the tablet. The reasons may be the weak economy and consumers` anticipation of the iPad mini, which will appear next month.
Tim Cook suggested that the lower profit margin is due to Apple`s addiction to making new products with higher prices. While Apple has troubles with selling, South Korean rival Samsung Electronics Co sold 56.3 million smartphones in the quarter, according to research firm IDC, it gave the company 31.3 percent of global market share, more than double that of Apple.
Analysts claim the real test for Apple will come during the crucial year-end holiday shopping season, when competition will reach fever-pitch against new gadgets from Amazon.com Inc, Google Inc and Microsoft Corp., Reuters says.
“Going into earnings we were wondering if the slowing economy will catch up with Wall Street, and it has,” said Channing Smith, co-manager of the Capital Advisors Growth Fund.
Then he added:”Apple is very well positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative, but that’s not surprising. Err on the side of caution is a proven formula.”
Apple’s second-largest market in China pleased the company with the rise of quarterly revenue by 26 percent, and jumped nearly 80 percent to $23.8 billion over the full year, contributing 15 percent of Apple’s total, Cook told analysts.
Apple plans to launch the iPhone 5 in China in December, hoping to staunch market share loss in what is set to become the world’s largest smart phone market this year.
For the December quarter, Apple forecast revenue of $52 billion, below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S. And it expects margins of 36 percent, far lower than analysts’ expected 43 percent.
As Reuters says, Chief Financial Officer Peter Oppenheimer mostly ascribes the lower margin and conservative guidance to a stronger dollar, higher costs associated with new products, and the fact that Apple’s next fiscal quarter has one less week than the same period a year ago.
Supply constraints hold up sales of the iPad, Apple had difficulties with delivering large quantities of the iPhone 5 since its launch in late September, it had the waitlist for the device sometimes stretching to three weeks.
Cook said:”Our supply output is significantly higher than it was earlier in October,” referring to the iPhone 5. “And I’m confident we’ll be able to supply quite a few during the quarter.”
Cook also mocked at Microsoft’s new Windows 8-based Surface tablet.
“I haven’t personally played with the Surface yet, but what we’re reading about it, is that it’s a fairly compromised, confusing product. I suppose you could design a car that flies and floats, but I don’t think it would do all of those things very well.”
Despite the troubles of the fourth quarter Apple ended its fiscal 2012 with a 45 percent increase in revenue to $156.5 billion, while net income was up 61 percent at $41.7 billion.
The company ended the quarter with $121.3 billion in cash and securities, of which $83 billion was offshore.