Tuesday, July 24, 2012, 02:51 pm PT (05:51 pm ET)
Apple attributes growth slowdown to sluggish economy, rumors of new productsDespite posting $8.8 billion in profits and selling a record 17 million iPads, Apple's third quarter of fiscal 2012 is seen by the market as a disappointment. When asked what challenges the company faced during the quarter, a weak global economy and rumors of new products were cited by executives as two of the biggest headwinds faced by Apple.
Apple Chief Financial Officer Peter Oppenheimer said the poor economy in Europe had a particularly large impact on Apple's sales during the June quarter. In addition, resource-based economies in countries like Australia, Brazil and Canada also struggled during the three-month span.
Another issue is rumors of Apple's anticipated next-generation products, in particular regarding a sixth-generation iPhone.
"We're reading the same rumors and speculation that you are about a new iPhone," Oppenheimer said.
Apple Chief Executive Tim Cook said he has the sense that there is "incredible anticipation" for Apple's next generation of products. While he said he can't exactly quantify the effect rumors have had on sales, he said it's likely a "reasonable amount."
New product rumors also played a part in relatively flat Mac sales during the June quarter. The timing and availability of Intel's latest Ivy Bridge processors forced Apple to launch its latest MacBook Pro and MacBook Air models with just three weeks left in the third quarter, limiting sales in the three-month span.
Cook revealed that weekly Mac sales were actually down year over year before Apple's annual Worldwide Developers Conference, when the new MacBooks were announced. Sales of those new portables were so strong in the last three weeks of the quarter that it offset any reductions.
Apple also wasn't able to launch its third-generation iPad with Retina display in China until this month, as an ongoing trademark dispute with Proview stood in the way. Apple also had to wait for its new MacBooks to gain regulatory approval from China's government before they could go on sale.
Finally, Oppenheimer also cited a strengthening U.S. dollar as a factor that had a negative impact on Apple in the quarter. He said the dollar has improved against most currencies around the world, which has resulted in reduced revenue.
Though analysts may view Apple's third fiscal quarter as a disappointment based on market expectations, Apple executives insisted that they are pleased with the results they saw.
"We're very happy with how the business performing, and we're excited about the new product pipeline," Oppenheimer said.
And Cook said while rumors of new products may negatively impact sales of currently available devices, the ability of people to speculate is one of the hallmarks of free speech in the U.S., so he has no intention of attempting to stop those rumors.
"I'm glad that people want the next thing," he said. "I'm super happy about that... I'm not going to put any energy into getting people to stop speculating. I don't think that's going to amount to anything."
On Topic: Investor
- RBC ups Apple price target to $110 in anticipation of 'busy fall' for iPhone & 'iWatch'
- Wall Street on Apple's 'uneventful' June quarter: Excited by margins, concerned about guidance
- Notes of interest from Apple's Q3 2014 conference call
- Apple falls short of expectations with $7.7B in profit on sales of 35.2M iPhones, 13.3M iPads
- UBS increases Apple price target to $115, sees gross margins improving in 2015