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  (Source: Goodfon)
Apple's profit is flat due to higher manufacturing costs

While Apple managed to surpass analysts' profit forecasts for the fiscal 2013 first quarter, the company's stock took a tumble as investors worry over Apple's ability to maintain steady growth with new products.

Apple reported a revenue of $54.5 billion for the quarter ended December 29, 2012, compared to $46.33 billion in the year-ago quarter. The tech giant just missed analyst expectations of $54.73 billion.

Apple also earned a net profit of $13.1 billion ($13.81 a share) compared to $13.1 billion ($13.87 a share) a year ago. Profit clearly remained pretty flat, but it exceeded analysts' expectations of $13.44 a share.

The iDevice maker also noted that it had record iPhone sales for the quarter at 47.8 million (compared to 37 million in the year-ago quarter). It also had an uptick in iPad sales, from 15.4 million in the year ago quarter to 22.9 million in the most recent quarter.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

While Apple did okay for the quarter, investors are concerned with the company's flat profit due to higher manufacturing costs and also worry whether Apple can keep up its momentum with product popularity. Many new devices are hitting the market at lower prices and offer newer, better features. For instance, the iPad's market share was bested by Google's Nexus 7 tablet in Japan mainly due to cost differences.

Apple's stock has lost nearly 25 percent of its value since September 2012 ($170 billion in market value).

In after-hours trading today, Apple's stock fell over 10 percent.

Looking forward to fiscal 2013 second quarter, Apple expects a revenue of between $41 billion and $43 billion.

Earlier this month, it was reported that Apple had cut iPhone screen and component orders by 50 percent for the first quarter of 2013.

Source: Apple



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RE: Flat
By TakinYourPoints on 1/24/2013 1:49:39 AM , Rating: 5
Everything you mention has nothing to do with sales figures.

I could mention things like the iPhone 5 having fastest hardware, best displays, best battery life, best apps, but it doesn't matter.

All that matters is that Apple made the same net profit on hugely increased gross revenue from the prior year, that's it. Their gross margins took a massive hit because the iPhone 5 costs so much more to produce than the iPhone 4S. It happens with most new products, it happened with the iPhone 4 and it'll happen with the iPhone 6. The "S" models are where Apple historically makes their profit.

The iPad though is a different story. iPad Mini sales are cannibalizing iPad sales, and improving margins won't help since they'll throw a retina display in there as soon as they can. Average profit might have taken a permanent hit on the tablet side.


RE: Flat
By EasyC on 1/24/2013 7:34:03 AM , Rating: 2
quote:
I could mention things like the iPhone 5 having fastest hardware, best displays, best battery life, best apps, but it doesn't matter.


You could, but you'd be wrong...


RE: Flat
By retrospooty on 1/24/2013 7:46:08 AM , Rating: 2
Never in his mind... Never. LOL.

Ill give him fastest GPU and best apps by a small margin. It's all the other things its missing entirely that I was referring to.


RE: Flat
By maugrimtr on 1/24/2013 11:24:35 AM , Rating: 2
He lost me at the lightening cable. It's non-standard, expensive to buy, requires adapters to keep using docks and other peripherals (incl. in-car support and other non-replaceables), and the specification is so tightly held that most of the reliant market missed out on Holiday season sales of new products


RE: Flat
By TakinYourPoints on 1/24/2013 3:49:33 PM , Rating: 2
http://www.anandtech.com/show/6330/the-iphone-5-re... http://www.anandtech.com/show/6330/the-iphone-5-re...
http://www.anandtech.com/show/6330/the-iphone-5-re...
http://images.anandtech.com/graphs/graph6330/50475...

Mmmhmm

In any case, it still doesn't matter, they released a phone during their holiday quarter with drastically reduced profit margins than the prior one. The last time they made a major revision to the iPhone it was released during the summer quarter.


RE: Flat
By Cheesew1z69 on 1/24/2013 8:23:49 AM , Rating: 2
=
quote:
I could mention things like the iPhone 5 having fastest hardware, best displays, best battery life, best apps, but it doesn't matter
You do, almost every post...

SQUAWK SQUAWK! POLLY WANT A CRACKER! SQUAWK SQUAWK!


RE: Flat
By maugrimtr on 1/24/2013 11:28:42 AM , Rating: 3
Started laughing when he mentioned the S version of phones being historically the profit makers. You mean the history of one other phone, the 4s? One data point, a trend does not make.


RE: Flat
By retrospooty on 1/24/2013 11:58:14 AM , Rating: 2
LOL... Ya, he's kind of lost in this iMentality, where he needs to prove its the best. Logic and reason seem to go out the window in favor of trying to prove a point at all costs. I think it makes him feel better about his purchases... I dunno. Whatever.


RE: Flat
By Cheesew1z69 on 1/24/2013 3:42:46 PM , Rating: 2
"not an ifan"

but sure defends like one...


RE: Flat
By TakinYourPoints on 1/24/2013 3:44:29 PM , Rating: 2
Its true though. The move to the iPhone 4 was reflected in a drop in profit margins due to new manufacturing process while margins improved with the iPhone 4S. Same happens with any of their other new products.

Hell, the same happens in all sorts of industries, tech in particular, just look at chip fabs when they go to a new process. This isn't rocket science.


RE: Flat
By Nortel on 1/24/2013 4:53:35 PM , Rating: 2
Lol, who was the guy who gave you a vote? There have only been a handful of iPhones and you forgot about the "iPhone 3s".


RE: Flat
By augiem on 1/24/2013 5:36:11 PM , Rating: 2
3Gs


RE: Flat
By TakinYourPoints on 1/25/2013 6:02:45 PM , Rating: 2
This place is a circlejerk, always some idiot fanboy who'll upvote a terribly reasoned post because hurr durr Apple


RE: Flat
By Cheesew1z69 on 1/26/2013 7:59:32 AM , Rating: 2
And you are a loser, your point?


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein














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