Most companies would be delighted to present results similar to those of Apple. The company announced a $10.33B profit which turns out to be the 23rd highest quarterly profit posted by any company. But then there are three major issues with the Q2 results that we should not take lightly. First, the company “only” sold 51.19 million iPhones during the quarter compared to 61.17 million in the same quarter one year ago. Second, for the first time in 13 years Apple is not able grow its top-line. So, revenues are down. The company reported $50.6 billion in Q2 which is less then the $58 billion reported in the same period last year. Third, profits are down year over year as well.
So, the question arises, is Apple still a growth story? Was this just a blip or is this a beginning of a new trend? A maturing iPhone market, increased competition in the PC market, questions about its ability to further penetrate the Chinese market and general concerns about the macro-economic climate are surfacing. In addition, there is this perception of Tim Cook being a masterful operator but not that visionary product whiz like Steve Jobs. The recently increased focus on paying out dividends and increasing the stock by back program don’t help. These are typically moves by maturing companies to prep up the stock.
In the end, these are no real problems for Apple. The next quarter can answer most of these questions, if Apple is able to get the iPhone sales numbers back on track.
Please find my quote in Ecommerce Times here.