back to article Sorry, Apple-haters, but Cupertinian doom not on the horizon

As these words are being typed, Apple's stock is taking a beating, down around 10 per cent from its $514.01 Wednesday close, in reaction to what Wall Street has clearly characterized as disappointing financial results for the first quarter of Apple's 2013 fiscal year. May your humble Reg reporter take this opportunity to point …

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  1. Anonymous Coward
    Alert

    Mac sales decline is the problem

    No matter how many gazillions of shiny iToys the company sells, the vast majority are still being hooked up to Wintel machines. Declining desktop/laptop market share and declining profit margins on the iToys are exactly what Apple should be most concerned about. Phone and tablet markets are far too volatile for such a large company to peg its future on, and Apple has done too little to build up the Mac as a ubiquitous general computing hub that would have assured their long term success. They should have made lower-cost machines available, and allowed OSX to be installed as a Windows replacement on x86 machines in order to dominate the desktop and laptop market when they had the chance.

    As it stands, they seem to be following the path of Palm, RIM, and Sony in trying too hard to ultra-specialize in expensive gadgets. Already there are better phones and tablets on the market than what Apple offers for a lower or similar price - won't be long until quarterly sales of those toys fall just like the iPod is already.

    1. Mad Hacker
      Facepalm

      Re: Mac sales decline is the problem

      As much as I lament the de-emphasis of the Mac I can't help but notice their market share is still increasing against competitors (unlike you claim) but all computers that aren't phones or tablets are taking a hit.

      I'd say the market at this point is Samsung and Apple. Even Dell looks to be losing out in this market... I mean they are solid in the data center but even Dell cites declining home sales as an excuse for their quarterly issues. And honestly, weren't home sales pretty much not important once Commodore and Atari gave up?

      1. Anonymous Coward
        Anonymous Coward

        Re: Mac sales decline is the problem

        @Mad Hacker - nope - Mac sales were down over 20% from the last quarter, while Windows 8 license sales are reportedly holding steady. The only truly "hot" item in the desktop/laptop marketplace appears to be the Chromebook.

        1. toadwarrior
          Facepalm

          Re: Mac sales decline is the problem

          You think chromebooks are the hot thing now? What planet do live on because that's not reality for earth where most people realise chromebooks are shit.

        2. Anonymous Coward
          Anonymous Coward

          Re: Mac sales decline is the problem

          Are you seriously trying to compare Windows 8 LICENSE (~ £40 - £100) sales with Mac COMPUTER (~£500 - £1500) sales?

        3. Chris 3

          Re: Mac sales decline is the problem

          Fair point; but on the other hand you haven't been actually able to buy a bloody iMac for most of the quarter, so I'm not surprised sales were dodgy.

        4. Anonymous Coward
          Anonymous Coward

          Re: Mac sales decline is the problem

          Except you miss that the new iMac only shipped in the last month of the quarter and Windows 8 sales 'holding steady' - would hope so for a brand new OS shipping on all the new machines.

          Chromebook 'hot' maybe if you are a Google fanatic - wonder how their sales are doing vs even Windows 8?

      2. Anonymous Coward
        Facepalm

        Re: Mac sales decline is the problem

        Apple is losing share compared to Google. Claiming they aren't is simply moronic.

        1. Anonymous Coward
          Anonymous Coward

          Re: Mac sales decline is the problem

          So, do I understand correctly, that your claim is that Mac sales are declining and Mac market share is being eroded by some product Google sells?

          If that is true, Bullseyed, then you are clearly demented, or at best living in a different reality.

          The Chromebook eroding Mac sales? Get a life, or visit any institution of higher learning and see what the students are using.

    2. Phormic

      Re: Mac sales decline is the problem

      "Phone and tablet markets are far too volatile for such a large company to peg its future on,"

      Oh OK. I guess they should be pegging their future on a product category that's now more than a quarter of a century old, declining rapidly, which Apple makes barely 10% of it's revenues on and which no other company in the market can make money in.

      Tim Cook will be ringing for more advice any second now.

    3. Snapper
      FAIL

      Re: Mac sales decline is the problem

      @Andy Prough

      "and allowed OSX to be installed as a Windows replacement on x86 machines in order to dominate the desktop and laptop market when they had the chance"

      And with that old, tired and incredibly stupid comment, you demolished your own credibility.

      Apple uses its OS to sell Macs, on which it makes its money. A loss-leader in fact, and a great USP.

      Microsoft (or 'Wintel' as you call them for some reason), make their money selling licenses for their OS on other people's hardware. They then make a huge amount of money selling software to run on that OS. It's Windows and Office licenses that keep Microsoft going, as most of the other things they do make very little or are huge loss-making black holes.

      Why should Apple configure their OS to work successfully with the myriad of other computers, built by other people, for NO advantage? If they actually managed the feat (which in my opinion Microsoft has never achieved 100%) they would have had to indulge themselves in an on-going R&D effort that would cost billions. For NO advantage.

      I'm sure some people have 'Market Share' tattooed on their todgers!

      1. James 51
        Childcatcher

        Re: Mac sales decline is the problem

        Wintel is the term for the domination of the desktop market by Windows and Intel. I remember hearing it in the early nineties.

    4. Shagbag
      FAIL

      Re: Mac sales decline is the problem

      "Even the most rock-ribbed Apple-hater must grudgingly agree with Cook that those numbers are indeed impressive...Wall Street has clearly characterized as disappointing financial results..."

      By the author's logic everyone on Wall Street must be an Apple-lover.

  2. Anonymous Coward
    Anonymous Coward

    Competition is good.

    I would never buy an Apple product, because I like choice. If I see a better Android phone from a different company, I can buy that, secure in the knowledge that my existing Android apps will all port to it successfully. If I bought an iPhone however, I would have to keep buying iPhones, or throw away any apps that I had purchased for it. That scenario does not appeal to me.

    Having said that, however, having Apple around is potentially good for competition. Assuming they can keep up, that is.

    1. Chris J

      Re: Competition is good.

      Android is open software but the hardware it is dominated by four or five major handset manufacturers, all of whom seem inherently conservative, unable to innovate without Google's help, and as a result none of whom seem to differentiate their products significantly.

      Worse, the handset manufacturers seem to be using Android version upgrades as an excuse to shift new handsets, rather than adequately supporting their existing user base with timely, reliable updates. My Atrix was effectively "end-of-life'd" by Moto only a few months after I purchased it. Its replacement, a HTC, is stuffed with gimmicks and bloatware that cannot be uninstalled.

      On that basis, I'm not convinced that the Android ecosystem for me long term. As an Apple desktop user, I will probably move to iOS. If I were a Windows user I'd definitely move to Windows Phone, dare I say probably a Nokia. I'll be interested to see if I am representative of the market over the next 12 months.

      I agree that it is good for competition and I dearly hope that Apple will implement a more ICS-like notifications screen, and a proper 'services' hooks to allow inter-app sharing / integration like Android does so well.

      1. Bill the Sys Admin
        Thumb Down

        Re: Competition is good.

        @Chris J

        "Android is open software but the hardware it is dominated by four or five major handset manufacturers, all of whom seem inherently conservative, unable to innovate without Google's help, and as a result none of whom seem to differentiate their products significantly."

        Well considering most manufactures ship with their own spin to android i reckon they different. HTC have sense, Samsung have their own.

        "Android uses updates to shift new handsets"

        They do in some cases wont argue with that, but doesn't windows? They just canned all their old windows mobiles and didn't upgrade them to the new platform. Then gave them windows 7.8....? Bit of a bummer for the old mobile users. Also apple and Siri? Not all phones could upgrade to Siri? Same thing. Also if your phone is deemed not fit for the new upgrade do it yourself. That the beauty of android, its open source. My Desire HD was cut off a year after i bought it. Didn't stop me upgrading to ICS and Jelly Bean.

        "all of whom seem inherently conservative"

        What features do these manufactures not offer that others do? I don't think at all they are conservative. And of course google are going to push the ideas out there they are the software designers...?

      2. Ian Yates
        Pirate

        Re: Competition is good.

        "unable to innovate without Google's help, and as a result none of whom seem to differentiate their products significantly"

        I'm not sure I agree with this. There is a lot of innovation going on in the hardware, it's just that the market (read: "consumers") have all decided that they like the candy-bar style with few physical buttons; a design that Apple helped to convince the majority is best.

        You can't say that the Note and Note II weren't an innovation from what was around at the time. And the concept hardware that flies around every year is interesting, it's just that the manufacturers don't see enough interest to complete the R&D to market.

        If anything, the complaint should be that none of them are willing to take a risk.

      3. This post has been deleted by its author

      4. Anonymous Coward
        Anonymous Coward

        Re: Competition is good.

        "My Atrix was effectively "end-of-life'd" by Moto only a few months after I purchased it."

        Probably shouldn't purchase end of life products then. Motorola has no control over when you choose to buy a product.

        "Its replacement, a HTC, is stuffed with gimmicks and bloatware that cannot be uninstalled."

        Ignoring the fact that you'd obviously not doing any research before buying phones, it can be easily uninstalled if you root your phone. The "bloatware" is installed by the carrier, not by the phone manufacturer. It is not HTC's fault that the carrier YOU selected puts crap on the phone.

        There is a lengthy list of apps that cannot be removed from Apple products, and further you can't even delete the icon off your home screen.

    2. Anonymous Coward
      Anonymous Coward

      Re: Competition is good.

      How quickly they forget... or much more likely: never even knew.

      If only the fanboise apologists had been aware of the cool stuff companies like HTC and E-Ten already had on the market when Apple announced their plans for the jEsusphone to the devoted. How I laughed at the time... gosh, last year's glofiish with an incrementally improved touchscreen and all the cool stuff removed... coming next June... for twice the price! No thanks.

      Of course, iTards, being rather insular technophobes, they had never heard of E-Ten, HTC, et al, so rushed out bought Apple's phone offering in droves.. and now they appear to be trying to rewrite history to exclude the things they were ignorant of. Some sort of mass-denial to conceal/excuse the mass-hysteria perhaps?

    3. Joerg
      Thumb Down

      Re: Competition is good.

      Google Android is a fraud just like Facebook, Youtube. That is new economy bull at work.

      Companies using Linux cheat on customers. Giving no real support.

      Android is a huge mess. Low quality OS. Low quality hardware. No real standard so any developer to create apps properly would need to buy 30 to 100 devices just to do some beta testing.

  3. Malcolm Weir

    I'm sure that there will be plenty of people who see either the good or the bad in these results, depending on their prejudices.

    However, for me the key points are:

    1. The iPad mini is being sold at a lower margin than (e.g.) the iPad, which is a bit of a problem for those who would like a cheap iPhone: if they can't manage the margins on the lower-spec iPadMini, the outlook for a lower-spec iPhoneCheapo seems lower.

    2. If the demand for the iPhone 4 products is still high, then that says not-so-good things about the iPhone 5.

    3. Either their forecasting or their manufacturing processes need work, because there is no reason that product should be in short supply this long after launch UNLESS demand is enormously higher than anticipated, which (based on the numbers) it wasn't.

    1. James R Grinter
      Facepalm

      the lower-spec "iPhone Cheapo" *is* the "high demand" iPhone 4.

    2. James 51

      I agree with points one and two but as for three, there's an old trick of deliberately undersupplying the market when you've got it cornered (in this in the new shiny) to keep your cool/scarcity factor in place and justify the high asking price.

      1. Intractable Potsherd

        Cool/scarcity factor

        I was talking with a reasonably tech-savvy friend the other day, and she was saying that she wants something that can be used as a tablet that can be docked to a proper keyboard for real work. She said she has tried the iPad, but " ... it doesn't feel nice, and everyone has one." She then went on to say that she is tempted by the Galaxy Tab, because, amongst other things, "... it is different". * I was amused then, but it may well be a real problem for Apple if that is a deeper feeling.

        *This friend isn't much for style for styles' sake - after months of looking she is changing her mid-range Ford for a mid-range Vauxhall!

        1. Anonymous Coward
          Anonymous Coward

          Re: Cool/scarcity factor

          "it doesn't feel nice, and everyone has one."

          Guess that's a good reason for wearing bright green jeans and everyone else wears blue.

    3. Don Jefe

      Re: iPhone 4 Demand

      The iPhone 4 is free. That's why there is so much demand for it. iPhone 5 starts at $399. The demand curve has nothing to do with device itself, other than cost. There really aren't any huge innovations between 4 & 5 that aren't offset by the low cost (free) version except for the most die hard iFool.

      1. Anonymous Coward
        Anonymous Coward

        Re: iPhone 4 Demand

        >The iPhone 4 is free. That's why there is so much demand for it.

        Tis true, they can give them away - though it turns out nowhere near in the numbers they were predicting.....

        1. Anonymous Coward
          Anonymous Coward

          Re: iPhone 4 Demand

          The iPhone 4 is not 'free' - it's free after the phone company subsidises it but APPL are sure still making $$$'s on it - plus $$$'s when people buy apps and $$$'s when people buy an iPads to go with it and $$$'s when they buy apps for that as well and then an Apple TV box etc. etc.

          Samsung sell you a phone then you belong to Google. Next time you may buy a Samsung but equally a Sony or HTC or ?? Samsung are in a much more precarious position.

          1. Don Jefe
            Meh

            Re: iPhone 4 Demand

            It is free or it isn't free? You are talking all over yourself man. Slow down and vent your spleen in a rational way.

        2. Anonymous Coward
          Anonymous Coward

          Re: iPhone 4 Demand

          Apple doesn't give phones away - operators do.

      2. Anonymous Coward
        Anonymous Coward

        Re: iPhone 4 Demand

        Only a total idiot would think it's free....

        Realy, where do these people come from.

        An iPhone is £600 to £840 depending on how much money your network is screwing you. £35/month for 2 years is typical (£840)

        A SIM-Free Nexus4 on the other hand is £260 and £5 a month for a unlimited data, unlimited landline calls, and 100 other minutes contract with T-Mobile.

        Who is the real idiot???? I can even afford to throw the Nexus4 in the bin in 12 months time and buy next years great Android, and still be quids in.....

        1. Anonymous Coward
          Anonymous Coward

          Re: iPhone 4 Demand

          £5 a month for all that you are having a laugh - the cheapest on offer SIM the have was £10 with a paltry 250mb.

    4. csumpi
      Stop

      "The iPad mini is being sold at a lower margin than (e.g.) the iPad,"

      Just keep telling yourself that until you believe it. However you could do the math yourself: an iPad mini costs $300, a similar specced non-Apple tablet is half of that. So even if we assume that the non-Apple tablet is sold at cost (which you should also keep telling yourself), then Apple still has 50% margin. But of course the margin is higher than that.

  4. Herby

    Now if the stock will hurry up...

    ...and get back to $700/share we would ALL be nice and cozy. Still its hovering around $500 (+-) isn't bad for year over year price.

    Yes, my wife DID buy an Iphone 4S about a year ago, and likes it very much! Me? I sometimes want to be away from all things connected at times, and just want a "phone" (nothing fancy). But that's just me.

    So, go buy them Jesus Phones and fondleslabs!

  5. Dana W
    Meh

    Mac sales are still going up while PC sales are drooping. People can ignore that all they want, but its still there.

  6. Anonymous Coward
    Boffin

    Mac sales are down by a million units

    @Dana W - Mac sales were down from 5.2 million units to 4.1 million for the quarter: http://www.forbes.com/sites/connieguglielmo/2013/01/23/apples-holiday-sales-q2-forecast-miss-estimates-shares-fall-live/

    Regardless, that sales figure is anemic compared to Wintel, with Microsoft already selling in excess of 60 million Win 8 licenses in its first 10 weeks on the market. Mac had a chance to dominate the market the past few years, but I think that chance has passed them by. Windows and Chrome offer far superior cloud connected services for the desktop and laptop. Chromebook might be the platform that will ultimately challenge Windows, but at this point I don't think it will ever be Mac.

    1. Anonymous Coward
      Anonymous Coward

      Re: Mac sales are down by a million units

      It won't be Mac or Chromebook that challenges Windows. It'll be iOS and Android. If you consider a smartphone to be a "computer", they already outsell Windows. If you only count tablets, they'll likely outsell Windows in a few years. 2013 is already predicted to the year when tablets outsell laptops.

      Some will complain that tablets (and especially smartphones) are consumption only devices, but the majority of PC users are data consumers not data producers. There are many people who only bought PCs to join the email & web revolution in the mid to late 90s, but they don't particularly need a PC - or certainly don't need more than one which many now have.

      In addition, before long you'll be able to connect your iOS or Android phone to a TV/monitor, and combined with a bluetooth keyboard/mouse run a traditional non-touch desktop to allow stuff like writing long emails, typing in papers, organizing photos, etc. That's what will really damage Windows, and why Microsoft is frantically scrambling around trying to figure out a way to get more than a few token percentage points of share in the phone market.

      The desktop GUI layer may look/act like OS X on iPhone and Chrome on Android, but since the hardware people are running it on won't be the desktop/laptop hardware Microsoft dominated for so long, their existing relationship with the OEMs will be meaningless. That's why they're willing to screw their poor OEMs over so overtly, by making a relationship with Nokia, releasing their own brand tablets, and now rumored to be buying a chunk of Dell.

      1. Malcolm Weir

        Re: Mac sales are down by a million units

        Doug, "before long" is "for most of the past year"...

        While the pro-Apple lobby like to proclaim that companies like Samsung cannot innovate, companies like Samsung have been selling docks for their high-end handsets that deliver HDMI and USB outputs, supporting just the CONOPS you describe.

        It may not be a common thing to do, yet, but I agree with you that it's a "watch this space" thing!

        1. Anonymous Coward
          Anonymous Coward

          @Malcolm

          While its true that Samsung (and other Android vendors) have come out with their own spin on this idea, it has been terribly implemented. Connecting a phone to an HDMI display and displaying the touchscreen interface on a large screen has very limited usefulness. It needs to present a proper desktop (OS X GUI on iOS, Chrome on Android being probably the best of lackluster Linux GUI possibilities) and be done by Google for Android as a whole, rather than only certain vendor/product combinations being able to do it.

          It is nice that Samsung has tried to do this, but doing something poorly is not that much better than not doing it at all. When Apple does it, it will be pretty well polished and useful, and they will have a simple way for OS X apps to be able to run on it (cross compiled to ARM or something) There is already a ton of Linux apps that could work on the Chrome GUI, but some of them require a certain geek quotient to figure out. If Apple beats Goggle to the punch, Android fans will scream they are just copying Samsung, but fair or not, when Apple does it it will draw a lot more attention - not just to Apple but to the danger this poses for Microsoft.

      2. Anonymous Coward
        Anonymous Coward

        Re: Mac sales are down by a million units

        "It won't be Mac or Chromebook that challenges Windows. It'll be iOS and Android. If you consider a smartphone to be a "computer", they already outsell Windows. If you only count tablets, they'll likely outsell Windows in a few years. 2013 is already predicted to the year when tablets outsell laptops."

        What is a "saturated market" and why have you never heard of one?

      3. The Godfather
        Happy

        Re: Mac sales are down by a million units

        @dougs - spot on...accurately summarized...

    2. Chad H.

      Re: Mac sales are down by a million units

      Chromebook? The only place I've seen them is on the odd banner ad. As far as the real world is concerned, they might as well not exist.

      Also, when you have problems getting stock into stores/warehouses, as Apple did with the iMacs, etc, sales going down is quite natural.

  7. thickasthieves
    Happy

    owin', Owen, and oan

    Rik, like the long-past Minoan civilization, or the modern-day Pacific Island Samoan societies, the word Cupertinoan is best used to describe the culture of Cupertino.

  8. JEDIDIAH
    Linux

    Inherent contradiction.

    This entire article is a refutation of it's premise. If things are going so well, then why do you need to engage in the cheerleading? I am pretty indifferent to the recent earnings news either way. Since I am not a stockholder in any of these companies, I don't see why I should care.

    You're trying to kid yourself. That's a bad sign right there.

    1. Steve Davies 3 Silver badge
      Coat

      Re: Inherent contradiction.

      Do you have a pension or money market fund?

      Then you are indirectly investor in all sorts of companies including Apple even if you are a rabid apple hater.

      You could change 'apple' to any one of a hundred other companies btw.

      Mines the one with a copy of the FT in the pocket.

  9. Local G
    Childcatcher

    Fruity Bookkeeping

    <As Apple's CFO Peter Oppenheimer, who shared the call with Cook, pointed out, the quarter reported on Wednesday had 13 weeks; last year's Q1 had 14 weeks. >

    Why don't you tell us when Apple's first quarter begins and how any quarter of one year can have more or less weeks than another year? Quarters usually begin on the first day of one month and end on the last day of the month two months later.

    Is Apple claiming a Leap Week to explain these numbers or is Apple giving its friends who shorted it at $700 an opportunity to cover at $500?

    1. Frankee Llonnygog

      Re: Fruity Bookkeeping

      "Once every six years Apple adds an additional week to the first fiscal quarter to better align fiscal quarters with calendar quarters. Apple's fiscal quarters are usually 13 weeks in length. "

      http://seekingalpha.com/article/318471-apple-s-monster-quarter-will-deliver-monster-sized-results

    2. Malcolm Weir

      Re: Fruity Bookkeeping

      For every US company I've every worked for or with, while quarters and years are the reporting periods, "months" are the data points. Months usually are subdivided into weeks, and have either 4 or 5 accounting weeks; and there are either 52+1/7 or 52+2/7 weeks to a year. Therefore there will always be at least 4 months with 5 weeks, and every 6 years or so you'll get an extra week, making 5 months with 5 weeks.

      So, yeah, last year may well have been had a "leap (accounting) week" to reconcile the fact that we don't have an exact number of weeks in any year, yet accountants like working with weeks (largely because we all do).

      1. Yet Another Commentard

        Re: Fruity Bookkeeping

        Some places eschew calendar months and have 13 sets of 4 week periods. IIRC Rolls Royce does that. It makes the accounting a bit easier, but if your salary arrives on a 4 week schedule it can make home budgeting a pain in the neck.

        The spurious use of "Q1 2013" is a result of Apple having a 30 September year-end. So it classes Oct, Nov, Dec 2012 as being in 2013. I could say "Q1 of the 2012/13 financial (or fiscal as our US friends tend to say) year".

  10. Anonymous Coward
    Anonymous Coward

    Revenue is up. but profit is the same. Which suggests their costs aren't under control.

    1. Steve Todd
      Stop

      Because Apple is doing ...

      what the commendards are saying they should be doing and introducing cheaper products (iPhone 4 and 4S at discounted prices & iPad Mini). Where's all the talk about "they should be aiming for market share" now?

      1. Malcolm Weir

        Re: Because Apple is doing ...

        Ummm... I don't think anyone ever suggested that they should expand their market share at the expense of their high-end product.

        What seems to have disappointed the analysts is that the demand for the products seems to be shifting (NOTE: not "has shifted") away from the brightest-and-best, towards less capable products (e.g. demand for iPhone 4 and iPad Mini seems to be better than for iPhone 5/New iPad).

        1. Steve Todd

          Re: Because Apple is doing ...

          There's no way that a company can introduce cheaper products and it NOT effect sales of their higher end kit. There are always going to be a proportion of people who buy the cheaper device instead of the premium model they would have purchase otherwise. The only thing they can do is hope the result will be net positive.

          In the current financial climate coming out with about the same growth in profits as Google (the 14 week vs 13 week thing equates to about 7% growth) isn't bad, but cheaper devices command lower margins.

    2. Anonymous Coward
      Anonymous Coward

      "Which suggests their costs aren't under control."

      Of as they said substantial CAPEX or perhaps they took on huge stocks of (paid for) components which they were unable to build and sell. Might also explain rumours about cutting orders to certain factories.

  11. localzuk Silver badge
    Thumb Down

    Tablet bubble.

    As far as I can see, the current surge in sales of tablets is very much like that of the 'netbooks'. Its a bubble that will inevitably burst. Working habits haven't changed. People still work in cubicles. Kids still do their homework sat at a table. Teachers invariably still stand at the front of a classroom projecting onto a board while the kids look on.

    They don't do anything particularly "new", but they do less of the "old".

    I just don't see the trend continuing for a huge amount of time. Couple more years, 4 at tops.

    1. Frankee Llonnygog

      Re: Tablet bubble.

      Working habits may not have changed yet but leisure habits have.

    2. csumpi
      WTF?

      Re: Tablet bubble.

      "Working habits haven't changed. People still work in cubicles."

      Yes they have. Workers might still be in cubicle, but instead of working they are updating their facebook profile.

      "Kids still do their homework sat at a table."

      Ummm... wrong again. Kids are not sat at the table because their parents are too busy playing angry birds on their tablets on the couch. The only reason a kids would sit at a table is to play angry birds on their tablets because there's no more space on the couch.

      "Teachers invariably still stand at the front of a classroom projecting onto a board while the kids look on."

      Well, ok, you might have a point there. But this point is nullified by the above.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tablet bubble.

        This is more like the future of schools:

        http://news.bbc.co.uk/1/hi/programmes/click_online/9522379.stm

  12. unwarranted triumphalism
    Thumb Down

    Don't care

    Apple will never amount to anything and is obviously going down the drain. The best thing to do is break it up and give the money back to the shareholders.

    1. Steve Todd

      Re: Don't care

      You are Michael Dell and I claim my £5.

      No? Then remember what happened after he said that last time.

      1. Anonymous Coward
        Anonymous Coward

        Re: Don't care

        It may have been irony?

        1. fandom

          Re: Don't care

          No need to remind him, Steve knows very well what irony means:

          adj. sort of like iron

  13. Anonymous Coward
    Anonymous Coward

    Market manipulation..

    Which is it?

    "He also noted that sales of the iPhone 5, iPhone 4S, and iPad mini also suffered from supply constraints"

    Yet Apple are vastly cutting the forecasts for components.. Seems they know that demand for iPhone is dwindling, as users are finding better quality (or better value) phones in Android.

    1. the-it-slayer
      Facepalm

      Re: Market manipulation..

      Yet Apple are vastly cutting the forecasts for components.. Seems they know that demand for iPhone is dwindling, as users are finding better quality (or better value) phones in Android.

      That's an opinion, not fact. Obviously Apple have reached a saturation point where new sign-ups (first time iPhone users) are reducing and replacements are on a slow uptake because people don't want to replace (4 / 4S users) or the few that go off to another manufacturer. Stop fandroiding and get real here.

      1. Anonymous Coward
        Anonymous Coward

        Re: Market manipulation..

        They are surely approaching a plateau as more people have bought iPhones than, one would think, have the disposable income to replace them every year.

        iPhones are expensive for what they are. There are virtually no Android products that compete directly. They concentrate on bigger screens, more features or lower price, and are thus aiming at new markets. (Anyone with a 5 inch or above phone is likely to be someone who doesn't want to have to pay for both a phone and a tablet, for instance, so they are a lost sale to Apple both for phone and tablet). Outside the US, where the price tends to be less carefully hidden in the contract charges, even a "cheap" iPhone 4 looks a bit old compared to comparable Android products.

        The nearest anyone seems to be going to a direct head to head is RIM, with the Blackberry 10 platform. They seem to be trying to capitalise on people for whom an iPhone 5 is now a bit too common and want something different. But they are hedging their bets by aiming to keep the old keyboard form factor as well.

        So Apple's problem is a bit like Rolls-Royce cars, till they were taken over; the risk is of market saturation and the only product alternatives in your range being older and cheaper variants of the top of range product, with no benefits other than price.

    2. Steve Todd
      Stop

      Re: Market manipulation..

      Firstly the rumours of Apple cutting screen orders were wildly overstated. The estimate is they actually cut orders from about 17 million for this quarter to between 12 and 15 million. Secondly you're assuming that the screens were the cause of the supply constraint. It's pretty likely that there were other factors and they now have overstock of screens waiting to be used, hence the cut in orders.

  14. DavCrav

    What's happening is simple: the old stock price factored in massive future growth. At some point people in Wall St realized that you cannot keep growing at 50% a year for the next twenty years, and so the price came down. That's all.

    1. Anonymous Coward
      Anonymous Coward

      Oh well if that's all - go get your jobs at Goldman's then.

      How about this - market cap less cash puts they at a PE of about 6 - that is dirt cheap. If they were factoring in massive future growth they would trade on a PE much, much higher - try comparing Apple's PE with Amazon (ha ha) or Microsoft or even Google etc.

      If I were Apple think I would spend some of that cash on significant share repurchases - they could buy back 1/3 of themselves from their own reserves.

      1. DavCrav

        I'm not saying that other companies aren't more overvalued... *cough* Facebook still *cough*

    2. Dana W

      Finally, someone who gets it. The money people thought that level of expansion could go on FOREVER, and when they found out it wasn't an endless parade of free money they had a hissy, took their toys and went home.

  15. Charlie Clark Silver badge
    Thumb Down

    CEO 101

    we thought it useful to point out that Apple's sales would have been higher had Cook & Co. better managed that task

    Rik, that is exactly why Apple is considered to have underperformed in that quarter. It was what the board is paid for to get right. Personally, I don't buy the constrained supply argument too much; the flat profits look like a shift to the slightly lower margin products. This is fine except it does beg the question: when is the next high-margin device coming?

    The rise in reserves is also not that impressive: companies with large cash piles are generally considered to be inefficient as returns on that cash are much lower than on products. This explains the current trend for cash-rich companies to buy shares back. There are likely to be calls for Apple to do something with that cash - either a share buy-back or a big acquisition.

    Apple's business is still extremely healthy and anyone who doesn't envy it obviously isn't interested in money. However, it will be interesting to compare sales and profits growth with Samsung when they become available. Part of Samsung is now competing more or less directly with Apple but better able both to meet demand and sell higher-margin devices.

    Finally, share price movements alone should be taken with a pinch of salt. You need to know the volumes and, if possible, the buyers and sellers. On and around numbers days the market is distorted by those making a quick buck.

  16. Anonymous Coward
    Anonymous Coward

    Rik!

    Who cares?

  17. Anonymous Coward
    Stop

    Sorry Apple Lovers

    Your favorite designer fruity status symbol company has lost it's mojo and are running around releasing any old shit, in the hope that some of it sticks.

    They have no answer for Android. Android beats them in features, performance price and style at the top end, and value at the bottom and mid end. There is an Android for you, regardless of your requirements (big screen or small, waterproof, drop proof, keyboard or touchscreen, you name it, there is one).

    The same is now happening on tablets too, the latest 7in Android tablets piss all over the iPad Mini, as does the 10in Android tablets over the iPad, and not only are they better, they are also cheaper too.

    1. Dana W
      Meh

      Re: Sorry Apple Lovers

      Barry Shitpeas, the man who is to tech news what Fox is to political reporting.

  18. Trustme
    IT Angle

    Revenues be damned

    The revenues in this context are only important to investors and therefore have a direct impact on it's share price and thus it's market capitalisation, but those things are transitory and largely emotionally reactive. What Apple should really be worried about (and the rest of the IT world rejoicing about) is that they are already throwing themselves headlong into everything they did last time Jobs exited the company that drove it to near extinction, the things he reversed or stopped outright when he took over again. This time he won't be coming back to save them from the mistakes they are already gleefully holding press conferences to promote.

    1. HandleOfGod

      Re: Revenues be damned

      I wouldn't be rejoicing about the prospect of the demise of Apple if I was you - not that I believe what we're seeing here is the beginning of the end by any stretch of he imagination. More like it's a stock market reality check. But anyway, about rejoicing the demise of Apple - exactly how good would Android be if Apple didn't exist? It is the pressure of the competition which has driven the evolution of Android into the product it is today, the constant need to catch and pass the market leader (a moving target). As I understand it, Android entered development before iOS yet it has spent most of its time playing catch up (until ICS really). Apple set the bar and they set it high and the Droid OEM's, along with Google, were forced to up their game to compete. This is a good thing.

      Now the media working itself into a lather and the iOSomething evangelists do my head in, not to mention the ignorance of some Apple users about Android [1] - I am no Apple fan, believe me and my Nexus 10 arrives today, but a market as utterly dominated by Android in the future as it was by iOS in the past is not something we should welcome. I'd like to see Apple cut down to size a bit more but nothing more than that. Whether MS will ever be a serious player in this market is an interesting one - I am not sure if there is even room for 3 major players (and certainly not more so I think it'll be bye bye RIM).

      [1] - Got a new HTC One X hours before going away for the weekend. When meeting up with some friends I went to check something on my phone and realised that much of the new phone still was not set up. She happily informed me that if I'd only got an iPhone then all of my contacts, calendar events etc would just synchronise back through iCloud.[2]

      1. SoFl_G
        Happy

        Re: Revenues be damned

        Not sure what you went from phone wise to your new phone. If you jumped across platforms, then, no most of your phone setup is not going to just happen. I have been across several builds of android on my 2+ year HTC HD2 and every time I log into gmail on the phone, most everything is just there. Got a new Note 2 and 3 minutes after logging in, most stuff was there. Had to tell play store to re-download my apps, but that was about it. It works very well to resync on android.

  19. streaky
    Facepalm

    "other factors held down revenues, and therefore net income. A shortage of iMacs, for example"

    Yeah and bad management pisses off the market, go figure. I'm probably the world's biggest Apple hater (they and their customers literally aggravate me to rage despite knowing several past and current employees) - but I know their share price is irrelevant in the same way it was irrelevant when it was at it's high.

    Share price fanboys need to get a grip.

  20. derv
    Trollface

    What proportion of the iphone sales were for the 5?

    That's the interesting question

  21. Tringle
    Happy

    Et alors?

    I can wait.

  22. ChrisInBelgium

    Strange though

    Apple's Mac sales dwindling? Could be of course, probably depends where you are. I know several colleagues who, in the last year, having the need for buying a new computer, have switched to Macs, mostly Macbooks, one even a Macbook Pro, a lot of people around me have iPads and iPhones, and I still have to meet the first unhappy one about their purchase.

    I switched over 5 years ago, when I bought a second hand Mac Mini, which is now seven years old, but is still doing fine and in use daily. We bought a 21" iMac 5 years ago, running today Mountain Lion and is the main machine in our house, being used by the whole family. Still running as well as it did when bought.

    Windows 8 on the other hand, I've just seen on TV for now. Would love to see a machine on which it runs to have a look at it - does look interesting, but haven't met anyone who has actually bought one yet.

  23. Spoonsinger
    Coat

    What the Register needs is....

    a dedicated Apple forum. Oh Wait.

  24. rcorrect
    Megaphone

    Popcorn

    We seriously need a popcorn icon. Especially for any story related to Apple.

  25. Anonymous Coward
    Anonymous Coward

    share price

    has more to do with hedge funds view on where it will be in the next few milliseconds than with the real-world prospects for the firm.

  26. Anonymous Coward
    Anonymous Coward

    Where's the Nokia front page story then? they've returned to profitability when most people had written them off.

  27. bkedersha
    Alien

    The Stock Selloff

    The stock is being right priced, based upon future growth, which will slow.

  28. Anonymous Coward
    Anonymous Coward

    Apple's stock price is down from $705.07 in September to $461.35 today. That shows a decline of 34.5% in stock price in four months.

    Impressive.

  29. Steve Mann

    Bah!

    I'm not a fan of Apple kit myself, but I don't want to see them hounded out of the business either.

    The real problem for the writer of this article is that he wants the stock market to work as it did before, well, Apple led the wave of computerized transactions.

    People used to buy a product that impressed them, or see one in action, or use one, or ride in one, and they would buy the stock, get real stock certificates which they would hang onto for life because their money would be safe in a company that made such obviously better goods.

    That isn't what happens today by a long chalk.

    People buy stock electronically. there is no point to having a certificate because the stock was bought as a quick return money-earner, and the value of the stock under those conditions is decided by how panicky people are in any given moment.

    You'd think in a world where transactions of this sort move faster than they can be traced, short-selling would be more tightly controlled than it is, but the mentality is that short-selling "worked" in the trad shout-and-paper trade world, so it just works, 'kay? (Ollie White's MRP classes had a great take on what happens when you computerize a 'working" paper system. If you can find them, they are worth a look.)

    It isn't about how shiny or better the product is, it is about how much money the board was told would be piling up set against what is actually being shoveled out of the way when the sums are done.

    Shocking. But, you know, life. I honestly wonder sometimes why some companies go public, given that the abrupt (and necessary) shift in company goals must pose a serious risk of whiplash injury and the predators who can break a company just for the hell of it without serious investment or oversight.

    1. johnnymotel
      Thumb Up

      true irony...

      if the share price became depressed to such a point that Apple just took all their cash and went private. I for one would applaud such a move, it would stick one on all these Wall Street guys.

    2. Dapprman

      Re: Bah!

      Problem is, if you were correct, then there would be big fluctuations in each direction as shorters and market makers effectively manipulate the market. This would be a daily or even hourly thing.

      The reality is that the share price has been in a steady decline for 4 months now, there's been no spikes or dips, so no real shorting. Apple had been a favourate with long term inverstors and investment houses (think pensions) as they have been safe, reliable, and always rising. For the stock to drop over 30% in just four months shows signs of the big players selling and getting out, or at least offloading larger chunks of their investments. A furtehr 10% today shows that Cook's performance has not imperssed the city.

      I do not think they will collapse, but I have said for a long time that the stock was seriously over-priced and I think what we're seeing at present is a reballancing towards a more reasonable price, at which point it will level out once more (unless there's a major screw up - successes rarely cause big price rises). Apple with carry on as before and the only peopel hurt will be those who got carried away on god like stock.

  30. Slumberingjournalist
    Unhappy

    Plus another reason, perhaps...

    I've been happily using and buying Apple product since the early 90s. However...

    This year I DIDN'T spend at least $8000 AUD on a Mac Pro because Apple decided to not bother significantly updating what is already an old product line; I DIDN'T replace my waterloggged v4 iPhone with a v5 because the dis-benefits (new iOS "features" I dont want and a new connector that won't match my audio devices, etc) outweighed the benefits; I've STOPPED renting movies thru iTunes because Apple's servers often take literally hours to transfer the content to me over my metropolitan Melbourne ADSL2 line; and when my massive matte Apple Cinema Display finally dies (it's becoming unwell, sadly) I WON'T be replacing it with a glossy "mirror" screen.

    Sheesh, I hope Apple knows what it's doing!

  31. Tom 13

    The last time I checked,

    29% was a good bit more than 0%, and 48% was a tremendous bit more than 0%. And you'll note these are within the same time frame so a week or two twitch between reporting periods is irrelevant. Which means Apple are shifting more units for less in order to keep even on profits. Which means they are on a downslope that has to end. Whether it ends with an upswing or a crash is the question. Given that St. Jobs is no longer around to create miraculous upswings, best to put on your crash protection gear.

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