Print 63 comment(s) - last by TakinYourPoint.. on May 7 at 1:45 AM

It may not be able to do so in the future, though

Apple managed to meet analyst expectations regarding its second quarter earnings report, and even plans to dole out additional cash to investors. 

For Q2 2013 that ended March 30, Apple posted a net profit of $9.5 billion ($10.09 per diluted share). However, profit was down 18 percent compared to the same period last year; this was Apple's first year-over-year profut decline in nearly 10 years. Revenue came in at $43.6 billion, which was a boost from $39.2 billion in the year-ago quarter. 

Analysts expected around $10.07 per share on revenue of $42.5 billion.

Second quarter sales were at 37.4 million iPhones, 19.5 million iPads and a little under 4 million Macs. 

“We are very fortunate to be in a position to more than double the size of the capital return program we announced last year,” Tim Cook, Apple’s CEO, said in the statement. “We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases.”

Apple now has $145 billion in cash, and the board announced that it will return an extra $55 billion in cash to shareholders as part of a capital program that was introduced in March 2012. The board said it will double the $45 billion cash-return program, intending to up the spend on share repurchases and buybacks to $100 billion through the end of 2015.

For Q3 2013, Apple expects sales of $33.5 billion-$35.5 billion and gross margin is expected between 36 percent and 37 percent. Analysts were anticipating Q3 sales of $39.34 billion and gross margin of 38.8 percent. 

Many investors weren’t expecting the best figures to come from Apple’s quarterly earnings report this time around, mainly because the Cupertino-based company has had a pretty tough year – and it shows in the company’s stock price. Apple shares have fallen from $702.10 in September to $406.13 at the time of this article. The stock price plunged to $400 after supplier Cirrus Logic Inc. warned investors that its margins had weakened. This is indicative of Apple’s weak sales of flagship devices because Cirrus's chip stock fluctuates mainly with the sales of Apple's devices – since that’s its largest customer.
Apple ditched Google Maps as its main iOS maps app in favor of its own in-house service last year. Apple Maps debuted with the iOS 6 launch in September, but the application failed miserably when it came to navigation and geography. Apple CEO Tim Cook was even forced to apologize for the mishap.
Beyond the mapping issues, Apple had a huge executive shakeup in 2012. In October, Apple Vice President of iOS Software Scott Forstall was booted from the company as a result of the poor job on the maps app. John Browett, head of Apple Retail, was fired at the same time for orchestrating a failed retail hiring formula. A month later, Richard Williamson -- manager of the Apple mapping team – was fired as well.
Competition from Google’s Android operating system and it’s key hardware maker Samsung has posed a huge threat toward Apple, too. Apple's iPhone only represented about 19 percent of worldwide smartphone shipments in 2012 while all Android-powered smartphones accounted for about 70 percent. Android will even beat Apple in the tablet sector this year, according to a new report from IDC.According to IDC, iPad shipments are expected to make up 46 percent of the tablet market for 2013, down from 51 percent in 2012. Android-powered tablets are expected to increase their market share to 49 percent in 2013, up from 42 percent in 2012.

Samsung is expected to break another profit record for its fiscal Q2 2013 quarterly earnings, with an earnings guidance of $7.7 billion USD profit (up from $5 billion USD in the year-ago quarter).

Apple and Google are even branching out to another competitive realm in mobile electronics: wearable technology. Google is now offering its Google Glass headset (which is an augmented reality device) for $1,500 to early adopters and Apple is developing a smart watch, which could be released as early as this year. Microsoft is said to be working on a smart watch, too.
Apple showed a bit of fear in March during the eve of the Samsung Galaxy S IV launch. Phil Schiller, Apple's senior vice president of worldwide marketing, told The Wall Street Journal that Android's fragmentation was "plain and simple" and that Android-powered devices are the kinds of phones that are given as free replacements to feature phones. He also said that iOS is a much more smooth experience because Apple is responsible for both the hardware and software.
While Apple clearly had a ton of problems to contend with over the year, one of the major worries that investors have is whether Apple can continue to create innovative products and keep up with the likes of Samsung/Google. Many have complained that the iPhone has only had very minimal changes over the years, and that competitors are taking greater risks as far as hardware/software design and functionality.

Apple is looking to improve, however, with recent efforts like bringing hardware and software design teams together for greater collaboration. This could mean greater, more innovative products on the way.

Source: Yahoo News

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RE: Tony's pwned
By Tony Swash on 4/24/2013 6:13:12 AM , Rating: -1
What is likely is that Apple will "plateau" and remain extremely profitable. If they keep stagnating, it will slowly drop and if they go back to innovating it will rise...

You see stagnation I see a company whose growth and profits have gone from almost unprecedentedly spectacular to just plain very good. Of course compared to the anaemic Android OEM community, sans Samsung, Apple's profits are still stellar.

The issue of whether Apple's rate of innovation has slowed and if so how important that is for the future health of the company is an interesting one. I have posted before, and I will again if anyone is interested, a simple chronological list of Apple key breakthrough product releases with dates and it clearly shows that the speed of innovation at Apple appears erroneously fast in the rear view mirror and that the gap since the introduction of the iPad in 2010 is not anomalous.

But let's consider the worst case scenario and that Apple has nothing up it's sleeve except the continuous iterative improvement of it's broad product and service lines. How bad is that scenario? Certainly looking back at the PC era one can see that by around the late 1980s pretty much every major innovation, except for the internet, that shaped the PC era was already in place and that other than internet related innovations nothing very new appeared in the PC arena other than simple continuous iterative improvements. That still didn't stop the industry, and those that were successfully in it, such as Intel and Microsoft, from growing hugely in the two decades after 1990.

It's certainly possible that the key features of the mobile device revolution, flat, powerful and networked devices in various sizes that you touch with your fingers, is now in place and all that one will see from now on for many years is continuous iterative improvements (lighter, faster, better batteries, UI tweaks, more bundled services etc). If that is the case then Apple seems, on past performance, to be able play that game as good as anyone.

There is lots of speculation and teasing about the next step to wearable devices but nobody has anything that looks like a breakthrough innovation in that field yet, so all that there is right now is just speculation and we have seen that before (web TV, gaming consoles as gateway devices in the living room, blah, blah). When a paradigm shift happens, such as the PC, the Internet and the arrival of powerful mobile devices, innovation and change happens very quickly and during such periods of paradigm shift it's easy to come to believe that the rate of innovation of the transitionary period will continue into the stable growth and consolidation phase but once the shift is over it becomes clear that the pace of innovation has slowed to a much more sedate pace, until the next big shift comes along. Big paradigm shift don't happen that often, the PC happened in the early 1980s, the internet happened in the mid to late 1990s and the mobile revolution started in 2007. I would love for the next big shift to happen sooner rather than later but it might not.

RE: Tony's pwned
By themaster08 on 4/24/2013 7:06:20 AM , Rating: 3
it's broad product and service lines.
This made me laugh.

Apple TV
iTunes/App Store

Hardly broad if you ask me.

RE: Tony's pwned
By themaster08 on 4/24/2013 7:06:53 AM , Rating: 2
I Don't know how I managed to delete iPhone from that list.

RE: Tony's pwned
By retrospooty on 4/24/2013 8:30:05 AM , Rating: 1
"You see stagnation I see a company whose growth and profits have gone from almost unprecedentedly spectacular to just plain very good"

That is because you are looking at money and I am looking at products. Not to obnoxious and point out the obvious but product comes first, product drove that profit, but its a wave, not an endless spicket. Apple had something big in 2007 - 2011, and that was a HUGE advantage over the competition. They were are the best platform our there by a longshot. They got big for that reason, but that wave of profits lags behind the tech lead time and public view. 1st you have a great product, then you build marketshare and then you get profit. If you stop, you still have momentum and marketshare, but that dwindles. The simple fact is now that Apple no longer has the superior platform and if (note I said if) they dont come out with some better products, the profit lead will dwindle as well. Simply regurgitation wont cut it any longer now that the competition has caught up. If you are looking at feature parity, the competition has far surpasses Apple.

RE: Tony's pwned
By paydirt on 4/24/2013 9:48:48 AM , Rating: 2
Who has the superior platform for the mainstream consumer?

RE: Tony's pwned
By retrospooty on 4/24/2013 11:34:06 AM , Rating: 2
I would say the one that sells 5x the amount has the "mainstream" in step pretty well. More devices, more options, more price points more sizes, qwerty, small ones, big ones and every step in between.

RE: Tony's pwned
By Scott66 on 4/26/2013 5:31:15 PM , Rating: 2
Until the makers of all these options go out of business because they are broke Only one Android smart phone maker is making money.

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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