Apple iPad records disappointing sales in Q2

Written on:October 26, 2012
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Apple iPod Touch and iPad

Apple iPad sales fall below Wall Street target

Apple iPad has recorded disappointing sales, probably due to the eagerly-awaited iPad Mini, which is expected to launch in stores next month. Apple recorded low numbers despite having launched the iPhone 5, two new Apple iPads and three new Macbooks, ahead of the biggest selling season of the year – Christmas.

Shares in Apple dropped from a high in August after it delivered a 27% rise to $36 billion (£22.3 billion) in fourth-quarter revenue and a 24% to $8.2 billion (£5 billion) increase in earnings, giving profits of $8.67 (£5.38) a share.

Over a decade,  Apple has exceeded investors’ expectations and its undershot revenue targets in the previous quarter, came a surprise blow to its investors.

But chief financial officer Peter Oppenheimer dismissed Apple’s drop in earnings by saying that the issues that Apple is faced with now “are a normal consequence of having so many new products.” He added, “When a production line is new, it costs more to run and the components are more expensive. The difference this time is the sheer number of products we’re introducing at a short time.”

Oppenheimer singled out Apple iPad Mini among all products and said that the new, smaller version of the iPad, that was launched earlier this week, starts at $329 (£204), well above the $199 (£123) competitors charge for similar products. “Apple’s price is “aggressive,” with a margin well below its other products”, he said.

Apple reported that it shipped 26.9 million iPhones in the last quarter, just ahead of analysts’ predictions, but iPad sales of 14 million were well below lowered forecasts for the tablet as the economy remained weak.

Apple had expected a gross profit margin of 36% in the current quarter, which was the lowest figure in at least four years. Apple’s gross margin was 44.7% the same time last year. The gross margin represents what Apple derives from selling its products, excluding the cost of making them. Apple ignores the cost of research and development, marketing and corporate overhead.

Related:
Samsung reports whooping 85% surge in Q3 operating profits
Samsung stretches lead over Apple, Galaxy S3 sales bring record profits

     

2 Comments add one

  1. Amy says:

    I’m waiting for the Apple iPad Mini! really excited!

  2. John H says:

    And you will find the sales figures for the ipad 4 will be disappointing as well some will be down to the ipad mini the rest is they really got their fingers burnt over the ipad 3 fiasco bringing out a new ipad just six months and with better specs so soon after the ipad 3 has left a bad taste even in the mouths of some of the most diehard fans was the straw that broke the camels back.

    One of Apples strength’s and probably why they could charge a premium price for their products was their policy of twelve month release of models especially the ipad if they are now going down the six or sooner month release now makes them no different than any other company.

    And they will find more and more customers that were loyal to apple will now wait before jumping in and buying their latest and greatest for fear that a better model will only be a few months away.

    Yes other company’s are doing it and have been for some time the only difference is they don’t charge outrages prices and when they do bring out a new product it is radically different from the previous model.

    The ipad is looking very tired in the looks department.

    And for those who have just bought the ipad mini how happy will they be when Apple announce in march the ipad mini with retina display?.

    I shall just wait and see.

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