Analysts: Apple profits to fall this quarter, iPhone 5S to be delayed
Apple has been exceeding analysts’ expectations since 2003, but now the same analysts think the company’s profit will fall for the first time in a decade. Even worse, one Citibank analyst believes the iPhone 5S will be delayed, resulting in even more worry for Apple stockholders.
Analysts expect Apple’s quarterly report to show an 18% decline in net income with revenue growing by 8%. That would be the slowest growth rate Apple has seen since 2009.
More expensive components and lower-cost products like the iPad mini are eating into Apple’s margins. Demand is weakening too, with some estimates pointing to around 25 million iPhones sold, instead of 35 million or so like in the previous quarter. iPad mini demand is growing weaker too, leading analysts to believe there will be two mini's come upgrade time – a Retina and non-Retina model.
Foxconn is reportedly hurting too, as most of the manufacturing giant’s profits come from Apple and the weaker demand is hurting its revenue - rumors of all those returned iPhones can’t have helped either.
With all that said, Apple is still projected to report more profit than Google and Microsoft combined.
Still, there might be trouble in future quarters. Citibank’s analyst thinks the iPhone update, the 5S, and the potential lower-end iPhone will be delayed by a month or two (with August or September being the likely announcement dates), and that we won’t be seeing a new major version, the iPhone 6, this year.