Apple short of expectations

Apple chief executive Tim Cook. Photo by Reuters.
Apple chief executive Tim Cook. Photo by Reuters.
Apple has sailed into uncharted territory for the world's biggest company.

For only the second time since 2003, Apple's profit and revenue performance fell short of market expectations. For consecutive quarters, market expectations have been far more bullish than company guidance.

The company announced yesterday that it had sold more than five million of its new iPhone 5, just three days after its launch, and more than 100 million iOS devices had been updated with iOS 6.

However, social media has been choked with criticism of the new iOS mapping systems, which places Australian beaches on the east coast of New Zealand and some American cities in the middle of Australia.

Meeting demand for the new smartphones has also created doubts in the minds of some investors.

A weakness in Apple's share price, along with a share fall in Facebook, helped United States markets lower. Apple shares lost 1.3% to $US690.79 ($NZ839.16) after the announcement of more than five million sales. Analysts said Apple was facing supply constraints which limited sales of the new smartphone.

"Demand for iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible," Apple chief executive Tim Cook said in a statement sent to the Otago Daily Times.

"While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date. We appreciate everyone's patience and are working hard to build enough iPhone 5s for everyone."

The new phones are set to become available in New Zealand on Friday. An Apple spokeswoman confirmed the iPhone 5 would still be released here on Friday, despite shortages elsewhere.

Apart from New Zealand, 21 other countries are scheduled to have the iPhone 5 available on Friday.

Craigs Investment Partners broker Chris Timms said the iPhone 5 was likely to provide a "significant jump" in demand and provide an eventual upside for the stock.

"Initial demand suggests that it will be the most successful Apple product to date. Additionally, expanding store, online and carrier distribution in China and other emerging markets, like Brazil, is likely to provide growth for the company."

Competitive risks from Android and Windows 8 competition in tablets, along with US carriers providing lower subsidies for iPhones, and the ever present legal risks, could slow growth momentum post iPhone 5, he said.

 

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