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.