{"id":3027,"date":"2013-07-24T10:00:53","date_gmt":"2013-07-24T14:00:53","guid":{"rendered":"http:\/\/blog.nccomputertech.com\/?p=3027"},"modified":"2013-07-24T10:00:53","modified_gmt":"2013-07-24T14:00:53","slug":"record-iphone-sales-and-reduced-margins-dominate-apples-third-quarter","status":"publish","type":"post","link":"https:\/\/nccomputertech.com\/techtalk\/2013\/07\/24\/record-iphone-sales-and-reduced-margins-dominate-apples-third-quarter\/","title":{"rendered":"Record iPhone sales and reduced margins dominate Apple\u2019s third quarter"},"content":{"rendered":"
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\n
achimh<\/a><\/div>\n<\/figcaption><\/figure>\n

Apple dropped its financial results for the third quarter of fiscal 2013 today, and the news was decidedly mixed. Apple reported a quarterly record for iPhone sales (31.2 million, up from 26 million iPhones for the year-ago quarter), but iPad, iPod, and Mac sales were down slightly, and profits were down despite flat revenues from the same quarter last year.<\/p>\n

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\n
Apple reported $6.9 billion in profit from $35.3 billion in revenue. The revenue was near the top of Apple’s guidance for the quarter, but Apple’s margins are down significantly.<\/div>\n<\/figcaption><\/figure>\n

The dip in profits can be tied directly to lower profit margins on Apple’s products\u2014gross margins fell between 36 and 37 percent this quarter, down around six percent from 42.8 percent margins a year ago. According to Apple CFO Peter Oppenheimer and CEO Tim Cook, the dip in margins is due in part to strong sales for the iPhone 4 and iPhone 4S, which have lower margins than the high-end iPhone 5. While Apple’s latest flagship continues to sell well, aggressive pricing on the iPhone 4 in emerging markets made the older phone a larger part of Apple’s product mix than the iPhone 3GS was in last year’s lineup.
\nThis, incidentally, makes a decent case for a lower-cost iPhone<\/a> that sells for about the same price as the current iPhone 4 but is built to have higher margins than the aging aluminum-and-glass phone. Note that I don’t mean a “cheap” iPhone aimed directly at prepaid customers, but a new product built to Apple’s hardware quality standards that’s purpose-built for customers currently served by the older flagships. During the analyst question and answer session, more than one analyst attempted to draw information from Cook and Oppenheimer about a lower-cost iPhone (as well as other teased “new product categories”), but neither would share any new information. The new Mac Pro was said to be coming “later this year” and both iOS 7 and OS X 10.9 were teased for “this fall,” all information that we’ve had since WWDC. Apple refused to comment on release dates for either all-new products or new products in existing lines except to say that releases would begin in the fall and run through 2014.<\/p>\n

\"\"<\/figure>\n

Apple’s other major product lines were all down in unit sales compared to a year ago. The drop in Macs was relatively small\u2014Apple sold 3.8 million Macs in the quarter, compared to four million a year ago. That drop is shallower than the 10.9 percent drop that IDC reported<\/a> for the wider PC market earlier this month. The iPod segment also continues to dry up at a steady clip, with just 4.57 million of the music players selling this quarter compared to 6.8 million a year ago. This is the continuation of a trend that began not long after the iPhone launched and has only accelerated in the last two years as smartphones have become more popular.
\nThe iPad’s sales drop was a bit more troubling, given that it’s still one of Apple’s big growth drivers. The company blamed the drop\u201414.6 million units, down from 17 million a year ago\u2014on the third-generation iPad, which was enjoying strong sales from its first full quarter of availability at this time last year. Both the fourth-generation iPad and the iPad mini were introduced back in November of 2012. So while new tablets are widely expected later in the year, the current models are mid-cycle.<\/p>\n

\"\"<\/figure>\n

Apple’s fiscal fourth quarter is expected to be slightly stronger than this one\u2014Apple’s guidance predicted revenue between $34 and $37 billion and margins that fall within the same 36 and 37 percent window as this quarter. Quite a few of Apple’s marquee, high-end products\u2014the Mac Pro, the Retina MacBook Pros, the flagship iPhone, and both iPads\u2014should all be seeing refreshes before the end of the year, and we’d expect these products to boost Apple’s numbers toward the end of the fourth quarter of 2013 and going into the first quarter of 2014.
\nFor more on Apple’s earnings, including its tax rate, cash hoard, and stock buyback, you can consult the company’s press release<\/a>. You can also listen to the call in full for the next two weeks by downloading it from iTunes<\/a>.
\nvia Ars Technica<\/a>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

achimh Apple dropped its financial results for the third quarter of fiscal 2013 today, and the news was decidedly mixed. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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