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Record iPhone sales disappoint

Monday, Jan 27, 2014 - 02:11

Jan 27 - Apple posted record iPhone sales, but not enough to top market forecasts thanks to competition from Samsung in the U.S., leaving investors wondering when will Apple come up with something innovative to re-energize the stock. Conway G. Gittens reports.

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When you're the world's most valuable tech company - sometimes even a record just won't do. Apple beat earnings and revenue forecasts with sales of nearly $58 billion - but it's where those sales came from that's disappointing. iPhone shipments came in at 51 million during the key holiday season; that, however, was millions less than Wall Street was looking for. And despite a new China Mobile deal that is supposed to have waves of Chinese customers flocking to its stores, Apple's sales forecast for the current quarter left analysts on the other end of the phone saying - huh? The results show stepped up competition in the high-end smartphone market is making sales harder to come by, says Ross Rubin of Reticle Research. SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "Clearly we are moving into a period of higher smartphone penetration here in the U.S. We saw that 68 percent of Apple's revenue was made outside the U.S. this quarter and in addition many more of those smartphones are being sold to less affluent consumers, which is really not Apple's forte. The challenge for them is to build upon the installed base that they have with new products, new services." But Apple has yet to do that - leaving the stock to languish and tumbling after-hours. Shares were up only 5 percent last year, compared with a near 30 percent rally for the S&P 500. That's left the door open for much speculation about wearables… And an entry into the mobile payments business since Apple already has access to millions of credit card accounts through iTunes. Apple, however, is leaving consumers waiting for the next new big thing in gadgets. SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "I think we are on the cusp of a number of new technologies right now that are in a similar place to where music players were before the iPod or where smartphones were before the iPhone and in some respects the industry is looking to Apple for validation of these spaces to excite a user base to, to excite an industry." And so that leaves consumers with just a tweak here and there on the iPhone and that is clearly not enough.

Record iPhone sales disappoint

Monday, Jan 27, 2014 - 02:11

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