Apple's results disappoint ahead of holiday quarter
By Bill Rigby
(Reuters) - Apple Inc's profit and margins slid despite selling 33.8 million iPhones in its September quarter, and greater China revenue climbed just 6 percent even though two smartphone models hit store shelves in its second-largest market last month.
The unremarkable quarterly numbers prompted some disappointed investors to cash in recent gains in the stock, which slid 5 percent at one stage after-hours on Monday.
Wall Street had hoped for a stronger beat on quarterly sales after the company predicted in September that its revenue and margins would come in at the high end of its own forecasts.
Chief Executive Tim Cook predicted a "really great" holiday season: a crucial time for Apple as its new iPads go up against Amazon.com Inc's Kindle Fire and its new iPhones compete with lower-cost gadgets made by Samsung Electronics and other rivals using Google Inc's Android software.
Sources have said demand for Apple's $100 cheaper, brightly hued iPhone 5C lagged sales for the top-tier 5S, spurring concerns about the iPhone's market positioning and its ability to compete with a growing profusion of lower-cost rivals. The iPhone 5C is available in the United States starting at $99 with a contract, or $549 for an unlocked model with no contract.
In particular, some investors worry Apple may have missed a chance to jumpstart sales and fend off Samsung in China with an even more affordable phone. The company has ceded ground steadily to Samsung and homegrown competition like Huawei and Lenovo, but needs to stake out a bigger spot in the world's top cellular market to rekindle growth.
Revenue from China, Hong Kong and Taiwan climbed just 6 percent to $5.7 billion in the quarter, despite the 5C and 5S going on sale in September. The previous-generation iPhone 5 began selling in the country only in December, meaning comparisons should have benefited from a more typical year-ago quarter, analysts said.
Sales grew by about 24 percent from the previous quarter, or by about $1.1 billion. But that lagged the roughly $1.4 billion that Apple managed to tack on in the December quarter of 2012. Continued...