This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple iPhone Slowdown? Not on CEO Cook's Watch

There's been plenty of concern that the team of Samsung and Google (GOOG) have been eating Apple's proverbial lunch in the smartphone market, as Apple has continued to lose market share. Some have even started to move toward Microsoft (MSFT) Windows Phones, though that is still distant to both iOS and Google's Android.

While the iPhone may have lost market share, consumers are still incredibly happy with it, with Oppenheimer noting the iPhone is the "number one or number two selling smartphone manufacturer in most markets IDC tracks including North America, Western Europe, Russia, Turkey, Australia, Hong Kong, Thailand, Malaysia and Singapore."

Apple is expected to release the iPhone 5S later this year, and many are expecting a low-end iPhone to help spur growth at Apple's biggest segment.

Perhaps a low-end iPhone, which many are expecting, won't be priced as aggressively as some think. Garcha believes the phone would retail at $329, and Apple could deliver 35% gross margins on the phone at full ramp. However, a $580 ASP for the quarter suggests maybe Apple won't be as aggressive on price with the low-end model, and that could alleviate investors' fears.

The timing on when the new products are coming is still a bit of a mystery, as Apple's gross margin guidance for the fourth quarter was slightly higher than some were expecting. For the fourth quarter, Apple expects revenue to be between $34 billion and $37 billion, with gross margins between 36% and 37%.

On the earnings call, Oppenheimer said, "We're on track to have a very busy fall." Many were expecting a September refresh for the iPhone, but it could be October, with margins seemingly better than expected for the fiscal fourth quarter.

The iPhone was able to generate $18.2 billion in revenue for Apple, despite concerns of a slowdown in the smartphone market, and the high-end in general. The iPhone 4 is likely to be bumped out when the 5S is released, which could hurt margins a bit as new products tend to have lower margins than older ones, and while Apple squeezes out every last bit of profit it can.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%
YHOO $44.45 0.00%


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs