Apple ships record 47.8 million iPhones and 22.9 million iPads in Q1 2013

Apple's blockbuster revenue growth is slowing drastically, as iPhone sales plateau and the company finds itself lacking revolutionary new products.
The company's warning, issued Wednesday as part of its financial results for the holiday quarter, sent Apple Inc.'s stock plunging by more than 10 percent, wiping out a year's worth of gains.
Analysts said the warning suggested Apple can no longer sustain its growth without some completely new products. Its last revolutionary creation, the iPad, was launched in 2010. Co-founder Steve Jobs, who was the engine behind the creation of the iPod, iPhone and iPad, died in 2011.
"It has been an overriding concern with Apple that they would not be able to generate revenue growth just rolling out new versions of old products," said Jeff Sica, president and chief investment officer of SICA Wealth Management. "Now they've proven it in their numbers."
On a conference call with analysts, Apple CEO Tim Cook rebutted that idea, but as usual, gave no details.
"We're working on some incredible stuff. The pipeline is chock full," he said.
Before he died in 2011, Apple co-founder Steve Jobs told biographer Walter Isaacson that he had figured out how to create a groundbreaking, easy-to-use TV set. Since then, company watchers have been waiting for the company to bring out something in that vein to re-energize sales. Cook said the company was still working on it.
"I tend to believe that there's a lot we can contribute in the space, and so we continue to pull the string and see where it leads us," he said.
Apple said it expects sales of between $41 billion and $43 billion in the current quarter, which ends in March. That would usually be little cause for concern, even though analysts were expecting $45.6 billion, because Apple usually lowballs its forecasts. But Chief Financial Officer Peter Oppenheimer said the company is changing its practices and providing a reasonable range rather than a single, easily achievable number.
That means Apple is looking at sales growth of about 7 percent from last year's January to March quarter, a striking number for a company that's posted double-digit increases in every quarter except one since 2008.
Apple's stock fell $55.58 to $458.43 in extended trading, after the release of the results. The shares are down 35 percent from their all-time high, hit Sept. 21, when the iPhone 5 launched.
Fueled by earlier versions of the iPhone, Apple's market capitalization decisively overtook that of Exxon Mobil in early 2012, making it the world's most valuable company. With Wednesday's drop, Apple is worth just 5 percent more than Exxon.
Apple's enviable profit growth also hit a wall in the October to December quarter. It said net income in the fiscal first quarter was $13.1 billion, or $13.81 per share, flat with a year ago. That still beat expectations, as analysts polled by FactSet had forecast earnings of $13.48 per share.
Revenue was $54.5 billion, up 18 percent from a year ago. Analysts were expecting $55 billion. Sales were held back by the fact that the latest quarter had 13 weeks, one less than the corresponding 2011 quarter.
Apple shipped 47.8 million iPhones in the quarter, about 1 million less than analysts were expecting, and 22.9 million iPads, also about 1 million short.
Most surprisingly, Mac sales were also 1 million short, at 4.1 million. That's a 22 percent drop from shipments a year ago. Oppenheimer said this was because Apple couldn't get the new iMac desktops out before December.
Cook said iPhone supplies were short too, and the company could have sold more of both the iPhone 5 and older iPhone 4 if it had been able to make more.
Most technology companies would be ecstatic if they posted 18 percent sales growth and $13 billion in profit for a single quarter, but Apple is held to a high standard, set by the shocking, iPhone-propelled success of the last few years.
"Apple has been growing tremendously and that level of growth can't be sustained by any company," said Sarah Rotman Epps, senior analyst at Forrester Research.
Investors have already been concerned that Apple's strategy of keeping the price of the iPhone high means it's losing out on sales, particularly overseas. Consumers are instead opting to buy cheaper smartphones running Google Inc.'s Android software, which has propelled South Korea's Samsung Electronics to the world's largest maker of smartphones. The average wholesale price of the iPhone is $640, hundreds of dollars more than smartphones with comparable hardware.
There's speculation among company watchers that the company will produce a cheaper iPhone, but that would cut into its profit margin and could tarnish the company's image as a purveyor of premium products.
Apple had warned that the holiday quarter's profits would be lower than Wall Street was initially expecting, because it had so many new products coming out, including the iPhone 5 and iPad Mini. New production lines are more expensive to run and yield more defective products that need to be redone or thrown out rather than sold.

Sam4sammy :: iPhone 5 hits China as Apple shares slide further

The highly anticipated release of the iPhone 5 in China, Apple Inc's second-biggest market, failed to stop the recent share slide of the world's most valuable technology company on Friday, and analysts said Apple's longer-term China hopes may hinge on a partnership with the country's top telecoms carrier.
Apple's latest iPhone, sporting a larger 4-inch screen and 4G capability, was launched in the United States and 30 other countries in September, when the company sold more than 5 million of the devices in the first three days.
Apple's shares, however once among the most desirable of portfolio holdings have headed steadily lower since September on growing uncertainty about the company's ability to fend off unprecedented competition. This year saw a surge in sales of Amazon.com Inc's cheaper Kindle Fire and Microsoft Corp's first foray into the tablet market with its Surface.
Unlike the crowds that the iPhone 5 debut drew in many cities around the world since September, just one person was waiting at the Apple store in Shanghai's financial district when its doors opened at 9 a.m. on Friday.
"Some of our Chinese sources do not expect the iPhone 5 to do as well as the iPhone 4S," UBS analyst Steven Milunovich wrote in a note to clients.
China is Apple's fastest-growing market, bringing in about 15 percent of total revenue.
"In absolute terms, this (iPhone 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don't believe it will move the needle enough in market share," said Shiv Putcha, a Mumbai-based analyst at Ovum, a global technology consultant.
Apple shares were down 3.6 percent at $510.55 on the Nasdaq on Friday afternoon. The stock has lost a quarter of its value since hitting a high of $705.07 on September 21, as it faces increasing competition from phones using Google Inc's Android operating system.
Cutting forecasts
In addition, analysts cut their forecasts for shipments of the iPhone.
Jefferies analyst Peter Misek trimmed his iPhone shipment estimates for the January-March quarter, saying that the technology company had started cutting orders to suppliers to balance excess inventory.
Misek cut his first-quarter iPhone sales estimate to 48 million from 52 million and gross margin expectations for the company by 2 percentage points to 40 percent.
UBS Investment Research cut its price target on Apple stock to $700 from $780 on lower expected iPhone and iPad shipments for the March quarter.
The brokerage said it was modeling more conservative growth for Apple after making supply chain checks that revealed that fewer iPhones were being built.
The iPhone is currently sold through Apple's seven stores, resellers and through China Unicom and China Telecom which together have fewer than half the mobile subscribers of bigger rival China Mobile.
"Apple's market share declined because of the transition between the iPhone 4S and 5. Their market share will recover (with the iPhone 5), but if you don't have China Mobile, the significant market share gains will be very difficult," said Huang Leping, an analyst at Nomura in Hong Kong.
Apple has been in talks about a tie-up with China Mobile for four years.
A deal with China's biggest carrier is seen as crucial to improve Apple's distribution in a market of 290 million users - which is forecast to double this year. But the company's failure to strike a deal with China Mobile means it is missing out on a large number of phone users.
As the China pie grows, Apple's sales increase, but without China Mobile, it is losing ground at a faster rate compared with other brands.
China Mobile and Apple initially said they were separated only by a technical issue - as the Chinese carrier runs a different 3G network from most of the world - but that has evolved into a broader and more complex issue of revenue-sharing.
"China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually," China Mobile CEO Li Yue was reported by Chinese media as saying in Guangzhou last week.
Apple China declined to comment. China Mobile said it had no update to the Apple discussions.
In addition to Apple's share fall, shares of some of the company's suppliers were also down on Friday afternoon. Shares of Jabil Circuit Inc were down 5.6 percent at $17.50, Qualcomm Inc shares were down 3.2 percent at $60.76, Skyworks Solutions Inc stock was down 6.7 percent at $19.65, TriQuint Semiconductor Inc was down 3.9 percent at $4.65, Avago Technologies Ltd was down 3.9 percent at $32.38 and Cirrus Logic Inc was down 6.5 percent at $25.62.
China deal seen eventually
Cutting a deal with a Chinese state-owned carrier may be less optimal than the deals Apple is used to in other markets, and analysts note that China Mobile would not necessarily open the flood gates for Apple.
Ovum's Putcha believes Apple and China Mobile will eventually strike a deal - though this would be for an iPhone running on China Mobile's next-generation network rather than its current 3G network.
Of China Mobile's 704 million subscribers, only 79 million are on its 3G network, and Apple has been reluctant to sign up to China Mobile's underutilized, homegrown TD-SCDMA technology. "Apple likely doesn't see the return-on-investment in extending themselves for TD-SCDMA," Putcha said.
China Mobile is currently conducting a trial of its next-generation network, TD-LTE, which could be of more interest to Apple, but full-scale commercial use - and an iPhone tie-up - could still be years away.
Android threat
Meanwhile, rivals are circling, eating away at Apple's smartphone market share. Samsung Electronics, Lenovo Group and little-known Chinese brand Coolpad held the top three slots in the third quarter, according to research firm DC.
All three have relationships with China Mobile and offer smartphone models at different price points. Apple competes exclusively at the high end, and even there, rivals are rolling out models with China Mobile. Last week, Nokia said it planned to release its latest Lumia smartphone with China's top carrier, which is also expected to launch Research in Motion's new Blackberry 10, analysts predict.
"The threat will still come more from the Android camp where they have many vendors already working with China Mobile and offering high-end phones," said TZ Wong, a Singapore-based IDC analyst.
While these smartphones do not generate the buzz of a new iPhone, Chinese buyers are not known for their brand loyalty, and this could siphon away users considering an Apple upgrade.
"I've used a Blackberry, Android and iOS and, personally, I want to try the Windows 8," said Andy Huang, a 37-year-old fund manager, who owns most iPad models, an iPhone 4 and a 4S. "I think the Windows 8 is very innovative."
With a China Mobile deal appearing to be still a ways off, Apple could always boost market share by offering cheaper models - the basic iPhone 5 will cost 5,288 yuan without a contract - though this appears an unlikely route for a high-end brand.
"If they want to expand market share, probably the only way to do it here dramatically would be to put out a lower-cost phone," said Michael Clendenin, managing director at RedTech Advisors. "It's really uncertain if they'd decide to go that route ... Apple's a mystery in that regard."
© Thomson Reuters 2012

Apple iPhone 5 the most-searched gadget on Yahoo! in 2012

The U.S. presidential election became the most-searched item and Kim Kardashian was the most-searched person on Yahoo! in a year when online searches were dominated by big news stories and pop culture obsessions, the search engine company said on Monday.
The search term "election" topped the list of searches, led not only by extensive media coverage but also widening conversation on online social media platforms.

The term "political polls" was No. 8 of the top 10 Yahoo! searches of the year.

"The 2012 elections dominated the online searches, which is amazing because if something is in the news, it's already accessible people were really saturated by it, but even so, that was a key word that people typed throughout the year," Vera Chan, Yahoo!'s web trend analyst, said in a conference call.

Chan said only two other news stories have topped the list in the past decade, those being the death of Michael Jackson in 2009 and the BP oil spill in 2010.

"iPhone 5" came in at No. 2, which Chan said was interesting "in a post-Steve Jobs era" because while Apple Inc's iPhone has featured regularly in the top searches since the first generation emerged in 2007, this was the first time a specific model had appeared high on the list.

Reality star Kim Kardashian was the most-searched person on the website, coming in at No. 3 and leading six famous women in the top 10.

Chan said Kardashian's "notoriety has kept her at the top," citing her ongoing divorce saga with ex-husband Kris Humphries, her high-profile relationship with rapper Kanye West and her E! channel reality shows.

Sports Illustrated cover model Kate Upton, British royal Kate Middleton, late singer Whitney Houston, troubled former child star Lindsay Lohan and pop star and former "American Idol" judge Jennifer Lopez all featured in the top 10 after being in the news prominently throughout the year.

Middleton, who was followed eagerly by fans and critics in her first year as a royal married to Britain's Prince William and being a staple at the London Olympics and the Queen's Diamond Jubilee, also garnered the most-searched scandal of the year when a French magazine published photos of her topless.

"olympics" came in at No. 7 on the list, as many turned to online media to watch and keep tabs on the global sporting event held in London during the summer.

On Yahoo!'s separate list of top-searched obsessions, pop culture dominated this year, with "The Hunger Games," reality star Honey Boo Boo, erotic novel "Fifty Shades of Grey," British boy band One Direction, Carly Rae Jepsen's hit song "Call Me Maybe" and Korean rapper Psy's "Gangnam Style" featuring in the top 10.

Yahoo! Inc compiles its annual search lists based on aggregated visitor activity on the network and billions of consumer searches.

© Thomson Reuters 2012