Apple iPhones Outsold by Samsung 2-to-1 in Q2, Profit Suffers
July 24, 2012 5:30 PM
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Apple still logs record profit, but sees shareholder confidence shaken by miss
The good news Apple, Inc. (
) fans is that Apple is forecast to be the most profitable American company for 2012 [
The company's calendar Q2 2012 (fiscal Q3) results, just
, 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. (
) 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).
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.
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 [
]. The iPhone does manage a draw on battery life, though, besting its Android rival in web-browsing life, but getting beat in talk time [
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
Samsung Galaxy Tab 10.1 tablet
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.
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RE: $27 drop
7/24/2012 8:59:49 PM
It is a reasonable response given that the stock ran up bigtime into earnings.
If a stock runs up into earnings, high profit is already being baked into the price. If a stock goes down into earnings, it is potentially being undervalued. This is why you often see companies go down on "good news" (ie - 20% growth and tons sold) and companies go up on "bad news".
Context and the big picture is important.
On the plus side, the AAPL August 650/655 call option spread I opened to sell on Friday is going to do VERY well for me. >:)
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