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  (Source: Reuters)
Apple still logs record profit, but sees shareholder confidence shaken by miss

The good news Apple, Inc. (AAPL) fans is that Apple is forecast to be the most profitable American company for 2012 [source].

The company's calendar Q2 2012 (fiscal Q3) results, just reported, revealed a 20 percent spike in profits on a year-to-year basis, soaring to $8.8B USD on a revenue of $35B USD, a profit of about $9.32 USD/diluted share.

The bad news is that Apple's iPhone sales slumped, moving only 26 million units versus an analyst consensus of 28.4 million units.  Analysts had already scaled back their expectations earlier in the month from 30.5 million units.

Apple's arch-rival, Android phonemaker Samsung Electronics Comp., Ltd. (KSC:005930) is believed to have sold around 50 million smartphones for the quarter.  In other words, it is out-selling Apple -- by itself -- approximately 2-to-1 in unit sales.  In fact, Samsung's flagship Galaxy S III smartphone reportedly alone moved 19 million units.  That means that Samsung's sales of just its top model are already approaching Apple's total sales.

Analysts had expected $2.2B USD more in profit (revenue of $37.2B USD).

iPhone 4S
Samsung left Apple's iPhone in the dust in Q2. [Image Source: The Tech Journal]

The remaining good news for Apple is that it moved 17 million iPads, versus the analyst expectation of 15.4 million.

Mac sales fell slightly short of the expectation -- 4 million units versus the consensus of 4.3 million.  iPods -- largely marketed today as "kiddie iPhones" -- settled in at 6.8 million units, just above the 6.6 million unit consensus.

The good news regarding iPods and iPads was not enough to convince investors to overlook the profits and iPhone sales miss.  Stock was down $27 USD in after-hours trading and is expected to open lower tomorrow.

The sixth generation iPhone is expected to follow a pretty straight-forward formula -- larger HD screen, LTE, and faster processor.  The iPhone's current screen, processor, and modem are quite dated compared to those found in the Galaxy S III International Edition [source].  The iPhone does manage a draw on battery life, though, besting its Android rival in web-browsing life, but getting beat in talk time [source].

But the phone was a no-show in June, indicating Apple likely would continue to release handsets in October, following the slipped iPhone 4S launch.  Some analysts had hoped Apple would "catch up" with an accelerated sixth generation launch, returning to June product announcements and late June/early July product launches.

There's background noise to the investor fear as well -- some worry that the death of iconic CEO and visionary Steven P. Jobs may make Apple unable to stay ahead of the curve.  Indeed, Apple remains untested, in a sense, in that it has not released a major new product line since the death of Mr. Jobs.

Apple is relatively desperate to try to stop Samsung in court, seemingly unable to stop Samsung on the market.  It has seen some success scoring sales bans on the Samsung Nexus smartphone and Samsung Galaxy Tab 10.1 tablet.  But it failed to secure its most hoped for ban -- a kill shot on the Galaxy S III.

Apple attorney Josh Krevitt sums up his company's plight, remarking, "Samsung is always one step ahead, launching another product and another product."

Indeed, Apple looked a step behind in Q2.

Sources: Apple, Bloomberg, Reuters



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iPhone inferior in every way
By B3an on 7/24/2012 7:27:41 PM , Rating: 2
quote:
The iPhone does offer slightly better graphical power in most benchmarks, and better battery life, though.

Not compared to the international Galaxy S3. Faster CPU and faster graphics... http://images.anandtech.com/graphs/graph5810/46302...

The international GS3's battery also lasts longer in most reviews i've seen.




RE: iPhone inferior in every way
By JasonMick (blog) on 7/24/2012 7:43:14 PM , Rating: 3
quote:
Not compared to the international Galaxy S3. Faster CPU and faster graphics... http://images.anandtech.com/graphs/graph5810/46302...

The international GS3's battery also lasts longer in most reviews i've seen.
Fixed!

You're wrong about the battery life, though, I think.

http://images.anandtech.com/graphs/graph5868/48204...
http://images.anandtech.com/graphs/graph5868/48205...
http://images.anandtech.com/graphs/graph5868/48206...

Looks like more of a draw.

Apple wins on web browsing, but Samsung has superior talk time (though the international version was not included in that test).


RE: iPhone inferior in every way
By Reclaimer77 on 7/24/2012 8:13:41 PM , Rating: 2
All that tells me is that if the iPhone had to power the same size display as the G3, it would get trounced on battery life.


RE: iPhone inferior in every way
By nofear4COMment on 7/24/2012 8:39:44 PM , Rating: 2
You are definitely correct! Apple stock is not going to be near as predicted, say $1000 per share. I'm highly doubt that and it's not going to happen. Dream on Apple!


RE: iPhone inferior in every way
By leviathan05 on 7/25/2012 8:19:22 AM , Rating: 2
I wouldn't jump to that conclusion so quick. Apple has developed incredible brand loyalty since the release of the iPod, and those numbers have continued to climb. Couples with the fact that Apple's profit margins are about the best in the world, and I can see their stock continuing to appreciate in value even though they are being outsold in the phone market.


RE: iPhone inferior in every way
By ven1ger on 7/25/2012 9:07:23 PM , Rating: 2
I agree with you on their profit margins, but I think those will soon shift. Unless Apple can come out with the next hot seller, in which they can charge exorbitant prices. But those profit margins are fading with each product cycle as they are being out-done by the competition in both better hardware and cheaper costs.


RE: iPhone inferior in every way
By B3an on 7/24/2012 9:27:00 PM , Rating: 2
The US version drains battery quicker from what i've seen (but its hard to find decent comparison benchmarks), mainly because of the inclusion of LTE in the US GS3. LTE is always a battery hog. Thats why i said the international version lasts longer.


By ScotterQX6700 on 7/25/2012 2:20:18 AM , Rating: 1
And Google's new voice actions show up Siri in every comparison I've seen.


RE: iPhone inferior in every way
By Natch on 7/25/2012 8:16:33 AM , Rating: 2
This is the true story of Apple lawsuits. If you can't sell a competitive product, with better features all around, and are getting stomped in sales by the competition, simply accuse them of violating your ( inane, never should have been awarded ) patent, take them to court, and have their product banned from import!

Look how well it's worked for them, so far.


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