Will Apple’s latest results be latest letdown?
Once regarded as an innovator, Apple now looks vulnerable and may even be lagging Google and Samsung Electronics
Apple’s latest quarterly results are likely to illustrate why investors are clamouring for the maker of the iPhone and the iPad to come out with another trend-setting device.
The report, due out after the stock market closes Tuesday, is expected to show that Apple is making less money as more customers buy its lower-priced iPhones and iPads instead of the top-of-the-line models. Other consumers increasingly are bypassing Apple products altogether as smartphones and tablet computers running Google’s Android software win more fans.
Those dynamics have changed the way that Wall Street — and even parts of Main Street — view Apple. Once regarded as an indomitable innovator, Apple now looks vulnerable and perhaps a step behind Google and the leading Android disciple, Samsung Electronics.
If analysts’ projections pan out, Apple’s earnings fell during the three months that ended in June, marking the second consecutive quarter of decline. The slump follows a decade-long streak of earnings growth that ended at the start of the year. Analysts surveyed by FactSet are expecting, on average, earnings of US$7.34 per share, down from US$9.32 per share a year ago.
Meanwhile, analysts are forecasting little or no revenue growth for the first time since the debut of the iPhone six years ago. Analysts are expecting US$35 billion in revenue for the period, its fiscal third quarter. It was US$35 billion at the same time last year.
Those would be impressive numbers for most companies, but the bar has been set high for Apple since the introduction of its iPhone triggered an upheaval that has changed the way people engage with technology. Smartphones and tablets are emerging as the preferred way to connect to the Internet and perform many other common computing tasks. In the process, those mobile devices are supplanting laptop and desktop computers.
Ignited by its early lead in smartphones and tablets, Apple’s financial performance launched into a scintillating trajectory that catapulted its stock into Wall Street’s stratosphere, too. The company’s shares rose nearly six-fold from the debut of the first iPhone in 2007 to the release of the latest model last September to establish Apple as the world’s most valuable company.
