Apple plunges 5pc as iPhone sales dip disappoints Wall St
APPLE reported a rare miss in quarterly revenue that fell short of Wall Street's estimates on lower than expected sales of its flagship iPhones, sending its shares down 5pc last night.
Apple sold 26 million iPhones during the quarter compared to an expected 28 million to 29 million as buyers held off ahead of the latest version of the smartphone, which will be released in the autumn.
By contrast, the company sold 35.1 million iPhones in the March quarter.
The most valuable US technology company said fiscal third-quarter revenue rose to $35bn, much lower than the average analyst estimate of $37.22bn, according to Thomson Reuters I/B/E/S.
Gross margin for the quarter was 42.8pc, also lower than the expected 43.68pc.
Few were expecting Apple to deliver a blowout quarter as they remembered that chatter over the launch of a new iPhone last year caused Apple to miss quarterly expectations in the autumn - the first time in years. The economic slowdown in Europe and China also made many investors nervous.
As iPhone fans awaited the release of a new model, they delayed purchases and caused Apple, the world's largest company by market value, to post its slower sales and profit growth in more than two years.
Analysts had expected that sales of iPhones - Apple's biggest source of revenue - would slide in the fiscal third quarter from prior periods.
While analysts predict that the next iPhone will be the best-selling smartphone yet from Cupertino, California-based Apple, the purchasing delays weighed down results until the device hits stores.
"People are waiting," said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. Apple was expected to sell about 25.4 million iPhones, compared with 35.1 million in the previous quarter.
A similar slowdown occurred ahead of last year's iPhone 4S release in October, causing Apple's shares to slide when the company reported profit that fell short of analysts' estimates for the first time since 2003.
Apple hasn't said when it will unveil a new iPhone, and has given no details about plans for the product. Yet the dip in unit sales underscores how speculation about Apple's plans, including a slew of websites dedicated to publishing rumors about new devices, can lead potential buyers to wait. (Reuters)
"Customers are increasingly tech-savvy and they want to have the latest and greatest," said Anthony Scarsella, the chief gadget officer at Gazelle.com, a website that buys and sells used iPhones and other consumer electronics. He said people wind down trading in their iPhones about four to six months ahead of an iPhone release. "It's something we definitely see year after year."
Apple is preparing to overhaul the look of the iPhone and has placed orders with suppliers for screens that are bigger than phone's current 3.5-inch screen. (Reuters)
, people with knowledge of the matter said in May.
Jim Ferrer, a commercial insurance broker in San Francisco, is among those waiting for the next iPhone. He bought the first model - known just as the iPhone - when it was released in 2007 and has held on to it ever since.
Ferrer considered getting the iPhone 4S, and then decided to delay the purchase when he saw that the newest model may be lighter and have a stronger processor that will make applications run faster.
"There are so many changes that keep coming out that I want to make sure I get the right one," he said. "Then I'll stick with it." Ferrer browses the Internet several times a week to check out the latest rumors about the next iPhone.
Another potential barrier to near-term sales is a weak global economy that's crimping consumer spending, as well as changes by carriers including Verizon Wireless that extend how long a customer must wait to get a subsidy for a new device, said Pacific Crest's Hargreaves.
Apple also is facing competition from rivals including Samsung Electronics Co., which according to NPD Group is the world's biggest seller of smartphones. Samsung released the Galaxy S III phone in May.
(Reporting By Poornima Gupta; Editing by Bernard Orr)