Apple profit falls despite strong iPhone sales

Apple watchers, that group of investors and tech geeks who anticipate every new iProduct iteration with bated breath, were even more excited than usual about the company’s earnings call Monday. A lot rode on the outcome: Angst about Apple’s potential decline has grown since game-changing new products such as a television or a smartwatch failed to appear, iPad sales have flattened and rivals such as Samsung sold more phones last quarter.Part of the problem in the earnings report may be the fact it did not capture some of the new toys in Apple’s pipeline.colourful stainless steel thermos flask Although demand for the iPhone 5S was strong, supply backlogs meant that consumers couldn’t buy them as quickly as they wanted. And the newly announced products — a lighter full-sized iPad, an iPad mini with a sharper display and the most powerful desktop ever — won’t go on sale for weeks.koyo bearing Typically, profits improve as manufacturing costs decline with higher volumes, and the full suite of products will be available for the blockbuster holiday season.High quality Quantum Analyzer QMA201 

The other problem, though, is that Wall Street’s expectations for Apple are incredibly high. The company missed expectations for iPad sales by 400,double wall stainless steel coffee pot000 units, for example, despite the fact that sales were steady at 14.1 million in advance of the release of two new models, which usually depress sales of the old ones. And Apple often notes defensively that Wall Street wouldn’t expect quarterly miracles from any other company.“All of these are products that only Apple could have delivered, and most companies would be happy with just one of them,” Apple chief executive Tim Cook said on the earnings call after having run through the suite of updated gadgets.Apple’s shares dove sharply in after-hours trading as soon as the earnings were released, but rebounded to less than 1 percent down. The stock hovered below $528 which, for perspective, is up from a low of $390 in April but down from its all-time high of $700 in September 2012. 

To offset a mixed report, Apple executives focused on how much consumers love their products, citing one survey that puts satisfaction rates for the iPhone at 93 percent, and another that shows that people use their iPhones 53 percent more than Android users.Skin analyzer App developers have made $13 billion through the iTunes store, over half of that over the past year.Apple is using a bit of its $146.8 billion cash stockpile to keep them happy, coming out with its first free upgrade to its operating system for Macs. That probably won’t satisfy activist investor Carl Icahn, who last week embarked on a campaign to get Apple to instead buy back stock, which would bolster the price for shareholders.