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back to article Apple misses earnings targets, Street reacts

Apple released its earnings report for the third quarter of its 2012 fiscal year, and its numbers came in well below most Wall Street moneymen's projections – largely, it seems, on a steep quarter-to-quarter drop in iPhone sales. Shares in after-hours trading took an immediate hit, down from just over $600 per share before the …

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No 'slide'

There is no 'slide' in sales. They are up on the year-ago quarter. So they are up, not down.

What's clear here is:

1. The Register has no idea on financial reporting

2. The 'analysts' that cover Apple have absolutely no clue and should, apart from that one guy that got it almost right, be fired immediately.

Did anyone notice that Apple beat THEIR OWN projections?

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Re: No 'slide'

There is a Slide in iphone sales, party cause samsung S3 and nexus but a big chunk is due to next iphone being rlsed in about 2 months. no one gonna pay full price for old model when new one is a few months away.

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Re: No 'slide'

but.... the.... graph ... ?

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WTF?

Re: No 'slide'

And down heavily on the quater before... hence a slide?

Good grief, this post must rank as exhibit A in any discussion on the effects of fanboyism.

Full disclosure: my first smartphone was an Apple, then I moved onto an HTC Desire and I'd buy a nice Nokia Win Pho if they'd just enable external storage support (my brother has one and seems to really like it).

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Facepalm

Re: No 'slide'

Who cares if it's down from last quarter if it's still up from the previous year? It's no fucking wonder out finances are so messed up.

Tbh I'd expect almost no iPhone sales for most of the year. Who the hell would buy a 4S given the rumours of 5 coming out anywhere from June onwards? I'd hardly call it an upgrade over iPhone 4 and certainly not worth a contract.

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Re: No 'slide'

Presumably you're claiming that there are seasonal variations that result in fluctuations in sales throughout the year - hence the "drop" in the recent quarter is justified. The problem is that a year ago (the year which you claim demonstrates that "they're up, not down") indicated growth throught the same period of 2011 (before a slight "dip" in sales). The graph also demonstrates growth through the same period in 2010. And 2009, and 2008.

Using my (admittedly basic, but not much worse than the analysts in the story) financial forecasting skills, one would expect, excluding unforseen market pressures, the climb to continue (maybe drop back a bit, as the story stated). Instead, they plummetted - probably due to fanbois waiting for iphone5, and also possibly Apple's customer loyalty base eroding somewhat, as people buy one of the better phones that have hit the market in recent months.

As for the analysts, applying the same rigour to the historical accuracy of predictions made by *any* analyst would probably result in them all being shot - something which, I believe, we can all agree would be a good thing.

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Re: No 'slide'

As some one who works in sales analysis, Henry's logic is as sound as can be. No FMCG company that I have worked for or have working knowledge of uses quarter-to-quarter as a key business indicator (at least not above the following), they will look at year-to-date (YTD) versus prior year-to-date (PYTD) and last quarter versus the same quarter prior year for reasons that have already been stated, such as seasonal sales etc.

I know very little about network administration so I choose not to criticise with no knowledge base, those who claim to.

I'm not a fanboi, I once owned many of their products but am no longer keen on them and have been "de-apple-ing" my home for the last five years. I now only have a six year old iPod.

I love Apple bashing, but see nothing to hit here (apart poor journalism - i.e., if you can't understand financial / sale analysis, then stick to IT or find someone who can).

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Re: No 'slide'

Companies should always aim to beat their own projections. As a general rule:

- companies who are successful publish lower forecast numbers so they look good when they beat them

- companies who are very successful publish what they thought were realistic numbers and still beat them

- companies who are struggling miss their own targets

Apple consistently provide low revenue guidance for future quarters, probably more than some other companies. Most analysts ignore Apple forecasts except as another bit of paper they have to file in the bit bucket.

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Facepalm

Re: No 'slide'

FFS, according to the chart they sold over 70 million iPhones in the two previous quarters. That's roughly one for every 100 people on the planet, how many more were they supposed to sell? I'm sure there was a good deal of upgrading and folks who finally caved because it could do "4G" on their carrier of choice. If it isn't a slide, it's certainly been a bubble. Frankly now that those two groups are mostly up to speed I have to believe the pundits claiming 80 million iPhone 5s have got to be smoking something growing wild in the reality distortion field. Sure there will be a big first week surge as the "gotta have its" go nuts but until there is another large breakthru, 2πG perhaps, it's bound to cool as there wouldn't be much benefit of going to the 5. Hell, sans the aforementioned breakthru I'll wager it drops again slightly next quarter. I know what you're thinking, it's either; "oh wise sage, what will be the number of iPhones sold?" or "alright smart arse, how many?". Sure, it's exactly 23,141,593 +/- nπ/4 for some values of n and that's as accurate as any other number you'll hear.

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Re: No 'slide'

"I love Apple bashing"

Kudos for the honesty. If only more folks on both sides of the fence were just a little bit more open about it.

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Anonymous Coward

Re: No 'slide'

But the 4S is a nice upgrade from the 3GS in my pocket. Since it will likely be the last iPhone that will fit correctly in my boombox, a 4S is my most likely upgrade when this one is EOL.

The entire world is not driven by contract renewals, and not everyone sees the need to buy a new toy every year.

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Facepalm

Re: No 'slide'

'Most analysts ignore Apple forecasts except as another bit of paper they have to file in the bit bucket.'

And most sensible people ignore analyst forecasts except as another bit of paper they have to file in the bit bucket.

Seriously, does nobody ever bother to actually look at the accuracy rate of most analysts? Most of them would dream of being as accurate as people predicting the weather by looking at pinecones.

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Anonymous Coward

So the bit on the graph that comes down quite sharp is not a slide then ?

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FAIL

You think?

I waited an extra half a year for the 4S, "and to avoid the 4" I expect a lot of people are holding off for the next phone. Nobody wants to be locked into a two year contract for last years phone.

With the contract phone system its purely "buy in haste, repent in leisure" I bought in just before a new release ONCE. Never again.

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Stop

I think the title needs to be fixed.

There is no need to further placate the "analysts". If you want to say they missed street numbers, thats fine, but stating analysts guidance numbers as if they are "real" when they have no real insight into the workings of the companies is wrong, potentially even misleading.

Also, when dealing with such a predictable product cycle as Apples, It would seem that YoY numbers are the ones to really pay attention to. In that light I think they did quite well.

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Re: I think the title needs to be fixed.

Exactly what I was thinking- I'm not Apple's number one fan but this does seem to read that 'Market Analysts Get Their Sums Wrong (what a surprise)' or 'boo-hoo-hoo, Apple fails to make rich scum richer'

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Megaphone

4S was all profit

So the 4S sales are down, big deal, the entire year of the 4S is pure profit because they didn't even have to make a new model or change anything. Apple was years ahead so taking 1 year out of the 5 years ahead to make billions is surely a good move. Heck they could bring out the 4SS and make billions for another few years before lifting a finger about a new model.

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Re: 4S was all profit

Yes, that business plan is called complacency and it's the way to ruin.

In case you hadn't noticed, Apple has recently seen it's smartphone business being eroded with increasing rapidity as Android in particular gains serious traction worldwide. Apple needs to do something truly magical to avoid becoming an also ran in the near future, not rest on it's laurels.

It's also looking like the same could happen to tablet devices before too long. That Nexus thingy looks damn good...

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Re: 4S was all profit

You mean the nexus tablet which no one even wants one of the models and it's screen bugs out leaving half of it useless among all the other complaints about things like freely loose screens on google message board?

The nexus tablet is over priced given its poor build quality. I'm sure apple isn't worried about it

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Anonymous Coward

Re: 4S was all profit

"In case you hadn't noticed, Google's only revenue source is advertising and with ad click rates declining 16% in their latest report Google needs to do something truly magical to avoid becoming an also ran in the near future.

With useless overpriced junk like the Nexus Q on offer, Motorola is losing more money than ever and Google taking a bath on thousands of returns on faulty low margin Nexus 7 will sure make for some interesting times ahead."

TFIFY

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Paris Hilton

New processor and much more powerful GPU (7x pixel fill rate of the 4) , new camera with 1080p video, faster 14.4Mbps HSPA and two multiplexed antennas,plus hidden little gems like Bluetooth 4 (about to come on the Arduino)

You have to be a bit shallow and not see beyond the external design to miss the new stuff.

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Meh

"New processor ... more powerful GPU (7x pixel fill rate) ...1080p video, ...14.4Mbps HSPA ... multiplexed antennas ... Bluetooth 4".

Consumers don't care (or understand) about tech specs (ans why should they?) unless they can see what those specs can do for them i.e. the user experience.

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Anonymous Coward

You're right they don't care about specs, but they see a faster phone, much better photos and video, faster web browsing, better call quality and compatibility with HR monitors, bike computers and other gadgets.

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Happy

Specs

Exactly - If I said to the average person in the street "Are you excited about a quad-core phone with 7x the pixel fill-rate and more GPU texture pipelines?", they'd probably give me a blank state. But show them what you can do with those things and it's a different matter.

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Apple will have no problems

Projected iPhone5 sales of 8 billion units at a profit of about 125$ each and on top of that another 6 billion new iPad S sales at just under 100$ will make a revenue of more than 1.5 trillion $ in the 4th quarter. This will enable the company to buy into a significant amount of the US and provide the correct legislation for continued expansion, profit and well-being for all.

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Re: Apple will have no problems

I was looking around for the joke icon, but I can't see it, or is my sarcasm radar broken?

Where on Earth have you got your numbers from? "8 billion iPhone5" sales? So more than one per person on the entire planet? "6 billion iPad's"? - all this in one quarter?

Do you run a Spanish bank/city by any chance?

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Anonymous Coward

Re: Apple will have no problems

Cruel, but fair ...

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Coffee/keyboard

@ JibberJabberBadger - Re: Apple will have no problems

Sarcasm radar broken? yep.

I didn't think that figures like that would need an additional 'joke' marker to be seen as a joke.

Can you enjoy standup comedy without a laughter reel? Just kidding, mate...

The numbers are gained from a dream I had after I snorted the same powdered mushroom that most of the Apple fanbois snort. I think it just induces feelings of W O R L D D O M I N A T I O N!!!11! Arrrgh.

Time for more dried frog pills.

Thanks for your time.

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Mushroom

Re: Apple will have no problems

@Andreas Koch:

I have some beach-front properties in Fukushima that you might be interested in.

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Re: Apple will have no problems

Then I read your subsequent comment. Consider my earlier comment withdrawn, sir!

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Re: @ JibberJabberBadger - Apple will have no problems

I'll make sure I get it fixed...

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this and that, maturing Android

Like many here, I suspect the lull in sales is due to many iPhone users waiting for the iPhone5. Some may feel that Android is maturing, too.

I take no sides here - I've only recently got my first smartphone, ICS update promised next month- but I had noticed that far more music-creation applications are available for iDevices. Looking into this* it turns out that that iOS has minimal latency compared to current Android versions (reminiscent of how PowerPC macs were better suited to music creation than Pentium PCs were at the time), but that it is something Google says is fixed for Jelly Bean. Obviously most people won't be using their phone or pad for musical knob-twiddling, but it seems representative of the polishing Google are giving Jelly Bean.

*source was a digital audio creation news site, interviewing developers and asking when they might make stuff for Android... the other reason they gave (besides latency) was that android tablets came in too great a variety of hardware.

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Anonymous Coward

Re: this and that, maturing Android

iCS promised next month - that tells a story - how long has ICS been available??

Apple release a new version of iOS - everyone gets it - you rely on your manufacturer caring enough to still release updates or for the phone to be able to take them. A friend of mine was 'promised' ICS for well over 6 months (probably nearer 9) and just got it a couple of weeks ago - disgrace. Then when he did get it some of the custom stuff he installed did not work / work properly - just don't need this faff.

I have other colleagues and friends who bought a new Android - then within a year it was basically dropped - no updates so without rooting it (which to be frank most people are not going to do) it became a security risk or quickly 'aged'. On the other hand a friend has a (over) 4 year old iPhone 3GS that is still going strong and runs the latest iOS (with just a few features missing due to the older hardware).

Work out the TCO of an iPhone vs Android phone over perhaps 3-4 years (as no everyone is a 18-24 month contract whore) and iPhone probably is a lot cheaper.

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Anonymous Coward

Apple exceeds earnings targets, street analysts fail, bad mouthing continues

Apple continue to do well in continuing growth of phone and tablet business. Wall street continue to predict the impossible, setting up for disappointment as competition to phones/tablets continues to grow in 2013-14 making the analyst predictions of a trillion dollar market cap look crazy.

The bad. Insulting statements from Cook like "Economic turmoil may push us from side to side, but we're going to stay focused on making the best product. We've seen again and again over the years, that this is when we distance ourselves further from people who don't innovate." to add to his stolen ip quotes. Apples application of the theory if you repeat lies often enough people will believe you, along with anti-social use of the courts, sets the stage for a backlash down the line.

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Facepalm

Its just a matter of time. Apple's line of mediocre, overpriced tat will eventually fall back in with the rest of the pack.

Honestly, some of the Apple fans here should listen to themselves. Desperately listing profit projections and possible new features. Why the hell does it matter to you so much?

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WTF?

"Its just a matter of time. Apple's line of mediocre, overpriced tat will eventually fall back in with the rest of the pack."

Eh? No different to berks like you predicting their immenant downfall.

"Why the hell does it matter to you so much?"

I'd ask you and your ilk the very same…

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Facepalm

And...

Thanks for proving my point. Getting all butt-hurt when someone insults your precious.

Also, try and spell 'imminent' correctly. I would of thought your magical I-Device would have corrected that for you.

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Headmaster

Re: And...

"I would of thought" - I would HAVE thought...

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Gimp

Not generally a fan of Apple products

But yeah, up from a year ago is pretty good. The poor analysts don't really know where to go with Apple estimates as Apple was consistently beating them by so much it was making them look bad. So they started padding their estimates to compensate, at the same time Apple started bringing their projections more in line.

They earned almost nine billion dollars profit in the quarter. I think financially they're doing fine. 17 million iPads and 26 million iPhones is a whole lot of product for three months - especially three months that are typically slower and at this point in the product launch cycle.

Not going to cry for them.

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Holmes

Upgrade cycles

Are most phones worldwide sold wth 1- or 2-year contracts? Which means the iPhone 5, if released wher rumoured, will be a potential upgrade when a lot of people's iPhone 4 and 4S contracts expire...

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Anonymous Coward

Re: Upgrade cycles

Problem is, there is a MAJOR assumption that they will want another iPhone.

Unless they are so locked in by all their purchased content, they are far more likely to get a better Android device like the Galaxy S3 or the Xperia S.

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Anonymous Coward

Re: Upgrade cycles

References required.

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Pint

Re: Upgrade cycles

This thing with contracts is a US / Europe thing. And Canada. The rest of the world buys their phone at the retail price, and their cellular service separately, and those few aren't "most of the world". Frankly, the rest of the world gets a better deal overall.

Most of iPhone sales are not US / Europe, so the answer to your question: "Are most phones worldwide sold with 1- or 2-year contracts?" is "No. Globally most people who buy iPhone pay retail off contract."

/Not a fan of the product, but in awe of the execution.

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Anonymous Coward

It's so obvious you can only really compare sales over the quarter in the previous year - imagine you sold [insert anything seasonal]. Are these 'analysts' really worth their money...? Good time to buy Apple shares I reckon.

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Anonymous Coward

Everyone will talk them down - no of course they can't keep going at this rate - the reality is you compare quarters 12 months apart not previous quarter as many businesses are seasonal. I bet the market for skiing holidays in Europe sees quite a boost from December through April but lo-and-behold a massive slide in the next 2 quarters...

The sales were well up on the year before - that is the important point. iPad sales doing well and a new iPhone anywhere from 1-3 months away - would you buy an iPhone 'now' with a new model our any day. Yes some people will but many will be holding out.

Also people forget about any new things they may release later this year - smaller iPad perhaps, Apple 'TV' (not just the set top box), subscription music service perhaps, payment service...? The thing about Apple is they keep it well under wraps (surprisingly) and these analysts are just guessing and frequently get it wrong.

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Anonymous Coward

The problem with analysts and stockbrokers etc. is they win when the markets go up or down - so volatility is a big pay day for them as people slosh in and out of equities - in and out of cash etc. So set the bar high - people buy the shares - the companies miss their excessive target - shares get sold - all the time the analysts / stockbrokers win.

These analysts should be fined when they get it badly wrong as (some) people (perhaps wrongly) trust their opinions and may lose as a result.

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Black Helicopters

Analysts

Analysts get paid by hits on their website. I'm going to set up a site that forecasts the downfall of Apple, Google, Microsoft, Cisco and HP in a vast IT cataclysm - predicting their demise in specific ways. You all will hate me, the predictions will be wrong, but you'll click and my kids' college will be paid for, which is the point.

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FAIL

apple hurting

arg poor little apple hold on let me get the tissues out lol I couldn't give a toss if there hurting in fact I couldn't care less if they went belly up as a company. they have horrible practices anyway there OS and phones are all the same locked down junk people are only paying for them just cause there apple and it has a half bitten apple logo. and guess what on apples next iPhone the iPhone 5 all your accessories will be useless cause apples changing the connector for the next phone its a ploy so apple can get more money out of you. good job I ant touching any apples never liked them anyways.

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