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Despite record earnings and iPhone sales that broadly surpassed analyst efforts, optimism about Apple's quarterly report was dampered by poorer-than-expected iPad sales.  (Source: Tablet Tutor)
IPad sales showed some signs of weakness, though

Another quarter has passed and Apple has yet again blown away analyst earnings predictions.  You'd think that the tired Wall Street gurus would have learned by now.

Leading the way was an incredible 14.1 million iPhones shipped.  Analysts predicted that Apple, beleaguered by fierce competition from Google's Android army and fallout from the iPhone 4's faulty antenna, would only ship 11 million iPhones during the quarter.  As usual, Apple's customers unquestioning loyalty and willingness to overlook the company's quality slip-ups proved a valuable asset.

Macs sales also looked promising, with 3.89 million units shipped, versus an analyst prediction of 3.7 million units.  The strong iPhone and Mac sales propelled quarterly revenue soaring to $20.34B USD (versus a consensus estimate of $18.9B USD).  Similarly, profits were up to $4.31B USD, handsomely surpassing estimates.

Apple's earnings did showcase some troublesome signs, though.  Particularly worrisome for Apple, its brand-new iPad. I twas forecast to move 4.7 million units, but only moved 4.19 million units, a sign of slowing sales.  And sales of iPods came in a 9.05 million units, falling short of the predicted 10 million units.

Its prediction of $4.80 (USD) earnings per share for its quarter in December also fell short of the bullish analyst consensus of $5.04.

These results led to an unusual trading pattern in Apple's stock after hours.  Despite reporting what seems a blowout quarter, these telltale signs of weakness sent Apple stock approximately $21/share, approximately a 6.6 percent drop.  This drop returned the stock to beneath $300, a mark that the stock just passed for the first time early this month. 

Perhaps such is the fate of an unusual company like Apple whose customers are fiercely loyal, whose actions are over scrutinized, and who continues to deliver plenty of surprises come earnings day.



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RE: Hit the nail on the head
By xpax on 10/19/2010 12:35:25 PM , Rating: 3
quote:
I guess the whole world is out of step, every one else is stupid, anyone buying stuff you don't like cannot be doing so for rational reasons ..... you know when you put it like that it sounds sooo plausible.

People buy Apple products because they like them, they like them because the way Apple designs and makes them. Until you accept that simple unpalatable truth you will be forever forced to rely on juvenile non-sequiters in order to explain reality.


Your response appears to contain a logic failure. Everyone else is stupid? No. From what I can tell, it's at best about 10-20%. That's hardly everyone.

I've been in this game for 30 years. Apple was a great company right up to the point when it released the first Mac. That was the beginning of the end. No longer were their products ideal for hobbyists and those with an actual interest in computing. Instead, they were targeted specifically at people who were too stupid to use any other computer. Apple decided these people were so mentally challenged that they couldn't handle more than a single mouse button.

Don't get me wrong -- from a business perspective, it was obviously the right move. The customers were happy as they ended up with a computer that was basic enough for them to actually use. Most of them were too oblivious to notice that Apple was basically treating them like students in a special ed class -- and the others didn't care.

Nobody ever went broke catering to the lowest common denominator. Apple is proof.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007














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