Jobs’ Mob released its quarterly figures and the Tame Apple Press proclaimed how Apple beat Wall Street’s revenue and profit forecasts by selling more iPhones in China than the United States for the first time.
It was becoming clear that Apple was hiding the fact that its iWatch sales were much lower than anyone hyped.
The Apple Watch went on sale after the company’s quarter ended so it was not expected that the iWatch would have an impact on sales. However if the watch had been doing well, then Apple would not have been able to resist a comment, particularly if it was heading towards the 20 million sales target analysts were claiming.
But it did not come.
Analyst forecasts for Apple Watch have been wide-ranging. FBR Capital Markets analyst Daniel Ives estimates sales of over two million units during the pre-order phase which began on April 10. In a note from last week, he said total shipments of the device could hit 20 million this year. Ming-Chi Kuo, an analyst from KGI however, said the Apple Watch had 631,000 initial shipments.
CMC Markets analyst Jasper Lawler said that Apple Watch shipment estimates might be “overdone” although that is unlikely to affect the share price too much.
“I don’t think it will hit the stock too hard. These estimates are really estimates to be absolute, there is no hard indication as to what actual sales will be,” Lawler told CNBC by phone.
But the Apple hype for the watch was supposed to obscure a decline in iPad sales, which saw an 18 percent year-on-year drop in the first quarter.
Chief Executive Tim Cook kept trying to talk about China iPhone sales, but there was an indication that even that was being spum. Sure China sales might be higher than the United States – but how high were US sales?
There are signs that these are stalling a little. Apple sold 61.2 million iPhones in the quarter, up 40 percent from the year-ago quarter, but down from the record-breaking holiday quarter. It sold 12.6 million iPads, down 23 percent from a year ago.
Normally a 60 million-plus iPhone number is a home run and will be cheered by the Street, but it does not answer some of Apple’s underlying problems. It has basically run out of ideas and it is depending on a product which is more or less the same as everyone else’s.
Apple’s revenue increased by more than $29 billion, compared with the year-ago period. Its gross margin was 40 percent, above its estimated range of 38.5 percent.
Apple’s cash pile continues to grow, despite the company’s aggressive efforts to repurchase shares and pay dividends. At the end of March, Apple’s cash totalled $193.5 billion, up from $178 billion at the end of December.
Revenue rose 27per cent to $58.01 billion from $45.65 billion in the year-ago period.
For the current quarter, Apple projected revenue of $46 billion to $48 billion, in line with analysts’ estimates for that period.