Apple tipped to report first profit fall in a decade

Apple tipped to report first profit fall in a decade

Apple is expected to report its first fall in profits for a decade when it releases its figures later today.

Although revenues are expected to rise, analysts expect the manufacturer to report a decline of upto 18% in earnings when the company delivers its second quarter trading statement.

The company has been hit over the past year by concerted and increasing competition in the smartphone and tablet market as well as higher component prices and the lower costs of some of its products, reducing its profit margins.

Weaker demand, as a result of rising competition is blamed for the 40% drop in Apple's stock value since September last year.

Apple shares fell below the $400 (£262) mark last week for the first time since December 2011, after Cirrus Logic, which makes audio chips for the iPhone and iPad, reported an inventory glut.

However some analysts said reports of Apple’s decline were premature. Vanessa Barnett, technology and media specialist at Charles Russell LLP, said any dip in profits would be a ‘blip’ in the company’s performance.

She said: ‘It's interesting times in technology right now. For a number of years Apple really did 'kick ass' in terms of the quality of its products, the design, the usability - and the hype. 

‘But in the last couple of years we have seen the rise of both Android as a phone O/S and Samsung as a 'cool' consumer technology company.  So it's fashionable right now to say Apple's on the slide.  But at the end of the day, they have good people, good ideas and there's still a big bit of Steve Jobs in the company's DNA. 

‘I'd call this a blip not the beginning of the end.  The patent wars will settle down, new products will be launched and the rise of Apple will begin again. It may not be as overpowering as at the time of Steve Job's but anyone who's thinking about writing them off is probably engaging in wishful thinking.’

Written by Mobile Today
Mobile Today


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