Tuesday, October 21, 2008

Red flags in the distance for Apple?

Apple beat analysts' estimates for revenues and profits in the company's fourth quarter, but there are some red flags on the horizon. Sales of Macs fell below analysts' expectations, only by 100 to 150 thousand units, but enough to question whether the recent MacBook and MacBook Pro refreshes will be enough to get the company's momentum back. Of more concern is good news that could turn out to be bad news. Sales of 3G iPhones smashed analysts' expectations, with 6.89 million sold vs. 5 million forecast by analysts. The potential problem is that Apple records the sales when the phones are shipped to its service provider customers, not when those operators sell them to subscribers. The original iPhone was rolled out slowly to service providers worldwide, but the 3G iPhone went out to mobile phone operators in almost 50 countries at the same time. Operators could have "stuffed" their warehouses with iPhones in anticipation of heavy demand that may not have materialized.

The proof will be in the next quarter, where Apple is already projecting sales considerably lower than analysts' estimates. It may be that Apple's simply managing expectations, or it may be a sign of real problems ahead.
Reblog this post [with Zemanta]
Post a Comment