iPad sales are least compared to other Apple Products

Apple beat expectations on earnings, revenue, iPhone sales and Mac sales in its fiscal Q4 earnings report on Monday. But the tablet unit remains a thorn on its side, missing modest expectations of 14.5 million units by a hair and coming in at 14.1 million units. This is only a minor blemish on an otherwise stellar quarter. But the sluggish tablet sales did weigh on the share price a bit in after-hours trading, where Apple’s stock immediately dropped by 2%.

It is quite likely that fear of weaker tablet margins is the main reason why Apple is so cautious in its guidance for the upcoming Christmas quarter. Apple is expecting its gross margin will fall to 36.5% to 37.5% for the ongoing quarter and Wall Street would have liked to see that bracket just a tad higher.

This gross margin guidance leaves room for a slight margin dip during the Christmas quarter despite the success of the new iPhone line. But of course, Apple may well be just setting up a soft target to beat.

Nevertheless, the iPad unit is still boxed into a corner strategically — volume growth is tough to revive with a product range priced entirely above $400, but cutting prices would create the risk of bringing overall gross margins to 35% or below.

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Apple reports $37.5b revenue for Q4 2013: 33.8m iPhones, 14.1m iPads, 4.6m Macs

Apple’s earnings are always the most highly anticipated results of the season among technology companies, and this year’s September quarter is no different. The tail end of Apple’s fiscal fourth quarter caught the launch of the new iPhone 5s and iPhone 5c handsets and while they were only available for a total of eleven days in fiscal Q4, Wall Street is still expecting Apple’s results to get a nice boost from initial sales of the company’s new iPhones. Apple announced that it sold a record-smashing 9 million new iPhone 5s and iPhone 5c handsets through the devices’ first weekend of availability alone, and analysts have been raising their fourth-quarter estimates ever since.

Heading into Apple’s report on Monday evening, consensus estimates were looking for Apple to post earnings of $7.93 per share on $36.8 billion in revenue, right near the top of Apple’s Q4 revenue guidance of between $34 billion and $37 billion. The numbers are now in and Apple crushed estimates, having managed a fiscal fourth-quarter profit of $8.26 per share on $37.5 billion in sales.

Apple’s September-quarter results certainly fall in line with the trend we’ve been seeing recently as the breakneck growth Apple has enjoyed in recent years continues to slow. In the year-ago quarter, Apple posted an $8.2 billion profit on revenue totaling $36 billion. Apple’s record profit in that quarter represented 24% year-over-year growth, and revenue was up 27% between the fiscal fourth quarters in 2012 and 2011.

The star of the show is always Apple’s iPhone lineup, of course, and analysts were expecting the company to sell 31 million units in the September quarter — though some estimates reached as high as 36 million units. Apple reported on Monday that actual FQ4 2013 iPhone sales totaled 33.8 million handsets, beating estimates.

Outside of the iPhone, analysts didn’t have tremendous expectations for Apple’s product lineup, particularly since most device lines had gone unrefreshed for so long. Consensus estimates were looking for Apple to move 14.5 million iPads in the September quarter and actual iPad sales came in at 14.1 million units. Apple sold 14 million iPads in the same quarter last year.

Apple said that Mac unit sales slid to 4.6 million units, down from 4.9 million in the year-ago quarter.

Wall Street was also looking for Apple’s gross margin to slide on-year from 40% in the fiscal fourth quarter last year to 37% in FQ4 2013 as cheaper iPhone models and Apple’s iPad mini continue to impact the company’s margins. Apple on Tuesday reported that its FQ4 2013 gross margin was in line at 37%.

Where Apple’s current quarter is concerned, analyst were looking for massive holiday-quarter revenue guidance with the consensus at $55.5 billion, and Apple said that it expects sales in fiscal Q1 2014 to total between $55 billion and $58 billion.

Apple’s full press release follows below.

CUPERTINO, Calif.–(BUSINESS WIRE)–Apple® today announced financial results for its fiscal 2013 fourth quarter ended September 28, 2013. The Company posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per diluted share. These results compare to revenue of $36 billion and net profit of $8.2 billion, or $8.67 per diluted share, in the year-ago quarter. Gross margin was 37 percent compared to 40 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue.

“We’re pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones”

The Company sold 33.8 million iPhones, a record for the September quarter, compared to 26.9 million in the year-ago quarter. Apple also sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter. The Company sold 4.6 million Macs, compared to 4.9 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on November 14, 2013, to shareholders of record as of the close of business on November 11, 2013.

“We’re pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones,” said Tim Cook, Apple’s CEO. “We’re excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS.”

“We generated $9.9 billion in cash flow from operations and returned an additional $7.8 billion in cash to shareholders through dividends and share repurchases during the September quarter, bringing cumulative payments under our capital return program to $36 billion,” said Peter Oppenheimer, Apple’s CFO.

App developer: Apple commits an ‘unjustifiable’ crime in iOS 7 design

When it comes to Apple’s huge redesign in iOS 7, feelings have certainly been mixed. iOS 7 is a huge renovation of Apple’s popular mobile platform and while we found it to be the perfect blend of new design and familiar functionality, others were not so impressed. The new mobile software has taken several beatings from respected designers, and some app developers and user experience experts aren’t terribly fond of iOS 7 either. The latest critique comes from Jared Sinclair, who has released several sleek iOS apps including Riposte and Whisper for App.net, and he doesn’t mince words at all. Sinclair has many complaints about iOS 7, but there is one in particular that he describes as an “unjustifiable” design error that forgoes rudimentary design principles and makes for a very bad user experience.

Sinclair says that iOS is all about touch and earlier versions of the mobile software always made touch targets clear. Buttons, for example, looked like buttons. But in iOS 7, Apple removed all of the platform’s button borders and instead uses only text and icons to indicate button locations.

“iOS 7’s designers have abandoned bordered buttons in favor of borderless colored text,” Sinclair wrote in a post on his blog. “I think this choice is unjustifiable. It is the root cause of my deep dislike for how it feels to use iOS 7. It introduces unnecessary tension and makes everything less usable than it ought to be.”

He continued, “Color alone simply cannot be the way to identify a button. You don’t touch a color. You touch an area. To activate a button, you must touch a spot inside of its boundary. Text floating in the middle of vast whitespace doesn’t define a boundary. Only borders define boundaries.”
The developer goes on to compare iOS 7 to iOS 6 and he makes a very strong argument that Apple’s new design is a serious step backwards where logic and usability are concerned.

Here’s why Apple didn’t announce Gold iPads

We knew just about everything there was to know about Apple’s new iPads heading into last week’s unveiling, but Apple did have a few surprises in store. For one thing, the Retina iPad mini is more expensive than we thought it would be. For another, Apple eliminated yet another go-to Apple blogger argument when it debuted the new second-generation iPad mini without announcing a release date. This is a practice Apple bloggers loved panning Apple’s rivals over, and now Apple has done it for the second time this year — the first being the company’s June unveiling of the Mac Pro, which still doesn’t have a firm launch date. Another surprise was that the gold iPad mini we saw leak several times leading up to Apple’s press conference was never announced, and neither was a gold version of the tablet’s larger counterpart, the iPad Air.

We know Apple tested gold iPads to match its new iPhone 5s. We have seen them. Daring Fireball also confirmed as much in a recent post about last week’s Apple event. According to the blog, however, Apple didn’t like the look of either iPad in gold and so it decided to scrap them.
“One other thing the 5S offers that the new iPads do not: a gold option” Daring Fireball’s John Gruber wrote. “My understanding is that they tried it, and it just didn’t look good bigger. It works on the iPhone because the iPhone is so much smaller — more like jewelry.”

Apple also tested the iPad Air in black, as we saw in a leaked photo from back in January, but decided to launch the new full-size iPad and the Retina iPad mini in space gray instead.

New iPhones to arrive on Nov 3rd (Earlier Nov 1st) in Dubai and Israel, Nov 15th launch for Phillipines

Following the debut of the iPhone 5s and iPhone 5c in several new countries late last week, Apple will begin rolling out the new devices in several countries during the month of November. Apple previously indicated that it would ship the devices on November 1st in Albania, Armenia, Bahrain, Colombia, El Salvador, Guam, Guatemala, India, Macedonia, Malaysia, Mexico, Moldova, Montenegro, Saudi Arabia, Turkey and UAE.

However, it appears that plan has slightly changed. As noted on Apple’s website for the UAE, the iPhone 5s and iPhone 5c will be shipping in the region (which includes Dubai) on November 3rd.

In addition to the UAE, Apple will launch the new iPhones in Israel on that same date. Reports from this morning have indicated that the iPhone will arrive in Israel on November 15th, but the major carriers in Israel have announced that the rollout will occur on November 3rd. From this information, it appears that the fourth iPhone launch wave will occur on November 3rd, not November 15th as reported by many news outlets this morning.

Following the November 1st and November 3rd international rollouts, the next launch wave will be on November 8th in the United States. The high-profile Boost Mobile and U.S. Cellular carriers in the United States will begin selling the iPhones on their networks on that date. This rollout is especially notable as this will be the first time that those two carriers will offer Apple’s smartphones.

Following that rollout, Apple will launch the iPhone in the Philippines. Two carriers from the country, Globe and Smart Communications, have indicated that it will launch the phones on November 15th. Based on Apple’s past international iPhone rollout patterns, there has been some speculation that the November 15th iPhone launch will also occur in the following nations:

Antigua and Barbuda, Bahamas, Bolivia, Brazil, Chile, Costa Rica, Cyprus, Ecuador, Grenada, Indonesia, Israel, Jamaica, Jordan, Kuwait, Panama, Paraguay, Philippines, Qatar, South Africa, and Venezuela.

Based on Israel actually launching approximately two weeks earlier, it is unlikely that this speculation will fully play out accurately. It’s possible that at least some of the countries listed above could see the new iPhones on November 15th, but it will be best to wait for official confirmations from Apple and/or the local cellular network providers.

More evidence suggests that the iPhone 5s sales holds almost a 9 to 1 edge over the 5c

There’s still a question that repeatedly keeps arising in our mind. Is the iPhone 5c a flop? That’s tough to say without knowing Apple’s internal expectations for the device but if the company expected that a cheaper iPhone would sell at equal or higher volumes than the iPhone 5s then it was sorely mistaken. The latest numbers from Localytics estimate that the iPhone 5s now accounts for 3.8% of all iPhones in use worldwide while the iPhone 5c accounts for just 1.7%. This suggests that the 5s has outsold the 5c by a ratio of around 2.23 to 1, which is somewhat surprising given that the 5c was billed by many as a lower cost alternative that would appeal to more budget-minded consumers. Going forward it will be interesting to see whether more aggressive pricing helps push the iPhone 5c’s volume upward compared to its more expensive counterpart.

Source: Localytics

Apple’s first store in Brazil to open by March 2014

Image of the mall where the Apple Store will be located

Apple currently plans to expand its retail store presence to Rio de Janeiro, Brazil early next year, according to information provided by a source. This person says that Apple is targeting a store opening between February and March 2014, but delays due to construction and staffing are always possible.

Approximately one year ago, Apple confirmed to various media outlets in Brazil that it is planning to open a store in the country. However, Apple has remained mum on when this store would open. “We look forward to the opening of the first Apple Store in Brazil, where we have long standing customers and hope to win many more each day,” the company said last year.

The source says that Apple’s retail expansion into South America is a high priority, and the company will begin seeking Apple retail employees from its U.S. stores to relocate to Rio de Janeiro for several months in the first half of 2014. Apple is said to want the U.S. employees to work in the new store in order to demonstrate and teach Apple’s retail practices. These America-based employees will also serve as temporary employees that can assist customers during this time period.

A second source added that Apple had originally planned to open the store in July of this year, but issues relating to hiring enough people to manage the store caused a delay. Though this type of delay could re-occur, the March timeframe is currently being targeted the launch window.

The opening of the Apple Store in Rio de Janeiro during this time period, a source added, is perfectly scheduled to occur in the few months before the 2014 FIFA World Cup. The internationally-watched sporting event takes place between June and July of 2014 at a stadium in Rio de Janeiro. Tourists visiting the event from across the globe will likely bring an uptake in visits to the new Apple retail in the region. This move would not be unprecedented: in the months prior to the 2008 Beijing Olympics, Apple opened up a flagship store in the city.

The Rio de Janeiro store will be located in the Village Mall shopping center, and the store has been under construction since 2012. This Brazil-based store will not be the only notable Apple Store launch in early 2014 as Apple is planning to open up its first Tokyo store since 2005.

Apple’s connection to Brazil has expanded over the past few years with the company’s collaboration with Foxconn to move some iOS Device production to the region.