What's next for Apple? All eyes on the holidays
If history is any indication, we could be in the midst of a quiet time for new Apple gear. So what is there to look forward to in the interim?
Apple's rare, driven by a falloff in iPhone sales, dinged the stock and led Wall Street analysts to reassess their expectations and financial models for Apple's current quarter.
The situation is an odd sort of problem. Sure, iPhone sales dipped in the latest quarter -- selling 26 million versus expectations of 29 million -- but the company stressed that its fan-base is simply iPhone 5) comes out.until the new version (read: the
And that -- along with many other product upgrades -- leads us to look ahead not to the current quarter, but to the holiday quarter (Apple's Q1). But first, let's review the fact that the current quarter falls during a peculiar chunk of time, which may make it a bit of a snoozer.
If last year's product cycle was any indication, the company's fourth quarter -- which runs through September -- could be especially light in product announcements. During that three-month stretch last year, Apple rolled out OS X Lion and updated a number of its Macs with speedier processors and Thunderbolt I/O technology. But that was it.
In the quarter we're in right now -- Apple's fourth -- the company is pulling the same trick with the release of OS X Mountain Lion, Mac lineup -- its portables -- got their big update last month, with new versions of the MacBook Pro and MacBook Air.. Though what's arguably the most important part of the company's
For this quarter, Apple has projected sales of $34 billion and earnings per share of $7.65. That would be a 20 percent jump in revenue from the year-earlier period, but until yesterday Wall Street had been looking for Apple to post sales of $38 billion and to earn $10.22 a share. Those estimates are already changing.
A bit of a silver lining for Apple: the iPad, which has very quickly begun to pick up some of the slack. Apple sold 17 million iPads during the quarter that just wrapped up, and could post a bigger tally in the next quarter if last year's growth was any indication. More importantly, Apple has chosen spring as the time to launch new iPad models, which has helped fill out these lagging quarters where sales get hurt by those holding off on buying iPhones.
Something that is expected to bolster Apple's iPad sales during the quarter is the company's cheaper model, the $399 iPad 2, which Apple yesterday described as a boon to its sales. Apple could also roll out updates to Macs that didn't get attention in the company's hardware update last month. That includes the iMac and the Mac Mini, which are both overdue for updates.
The iPhone holiday
That brings us up to Apple's first quarter of 2013, which kicks off at the beginning of October. If Apple follows the same schedule it did last year (and yes, that's a big if) it's all about the iPhone.
As was to be expected, Apple fended off a handful of questions about its next iPhone during yesterday's earnings call, though CEO Tim Cook not-so-subtly dropped the hint that there's a "fall product transition" that has been built into its guidance for the next few months of sales.
And not to be forgotten as part of that quarter is a refreshed iPod lineup. Yes, that's a business in decline (which is Apple's fault) but it's still bringing in billions to Apple. In this just-reported quarter, the company sold 6.8 million of the gadgets, bringing in $1.06 billion.
Looking ahead to updated Apple products seems simple enough, but of course there are other things at play behind yesterday's lower-than-expected earnings report. That includes economic weakness in regions outside the Americas, like the Asia-Pacific region, which was down 22 percent compared with the prior quarter, as well as in Europe, which was off 6 percent.
During a conference call yesterday, Cook responded to concerns about further weakness from those regions, saying that Apple would keep its focus on the products, and keep prices "aggressive."
"We've seen, again and again throughout the years, that...these type of periods are where we distanced ourselves further from people that don't innovate, and it increases the gap between us, and so that's what we're focused on," Cook told analysts.
However, there are still concerns about just how long Apple can continue to rake in the same kind of profits on the iPhone that it has enjoyed since the product's launch. And more importantly, whether it can stay competitive with Google, Microsoft, and Samsung. Some of the same concerns have manifested in Apple's tablet business, with the rash of new 7-inch tablets, from rivals, that undercut the iPad by hundreds of dollars.
"The most important thing for Apple by far is to continue making the best products in the world, and we are very deeply committed to doing this and we're maniacally focused on it," Cook said.
We'll find out soon if consumers will regard Apple's next offering as the best in its category. But we probably won't find out during this quarter.