Friday, October 26, 2012

Apple Inc. (NASDAQ:AAPL): iPad Dims Even Though iPhone Shines

Apple Inc. (NASDAQ:AAPL) has regained some impetus in its fourth quarter, selling more iPhone than expected while triggering some concerns about the iPad.

However, the results ratcheted up the stress on the company for the present holiday season. The company is preparing to market a new set of products and is struggling with making enough iPhones.

Apple said it sold 26.9 million iPhones, up 58% from the same quarter recorded previous year. The September quarter included a week of sales of Apple’s new iPhone 5.

Apple sold 14 million iPads, up 26% from previous year but less than several estimates.

On the whole, the company’s revenue increased 27% in the quarter, while profit increased by 24%. However, the iPhone figures were not enough for investors to be happy. Also, concerns surrounding profit margins were weighing on them. Apple issued revenue guidance for the quarter ending in December of $52 billion, which is nearly $3 billion less than the expectations of an analyst.

The results have left analysts and investors looking forward to the holiday for more lucidity about whether Apple can keep up its streak. Tim Cook attributed the deplorable iPad sales to have happened because customers are waiting for the iPad mini.

An analyst at ISI Group, Brian Marshall said that there are no secrets regarding Apple anymore. He was the one who said that customers appeared to have been delaying iPad purchases.

There were new questions surrounding the iPad, however the iPhone remained Apple’s most crucial product. Mr. Cook said that with analysts demanding for new iPhone is immensely robust. He feels that Apple is in a critical state of backlog at the moment. He added that the company’s productivity has improved exceptionally since earlier this month.

The iPhone still is the engine of growth for the company. It represents 47.6% of Apple sales in the quarter. The smartphone also has wider strategic importance. Apple depends on users of iPhone and their loyalty to drive sales of Macs and iPads.

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