OZ CE Retailers Set To Sell Apple Watch As iPhone Maker Shares Plunge

Written by David Richards, Bloomberg + Wire Services     22/07/2015 | 07:20 | Category: APPLE

Apple shares have plunged 8.8% after hours after the Company reported that they had sold less than what analysts were predicting, the Company did not release sales for their Apple Watch.

OZ CE Retailers Set To Sell Apple Watch As iPhone Maker Shares Plunge

Apple said that they will expand point of sale for its watch with JB Hi Fi, Harvey Norman and Dick Smith tipped to be selling the Apple Watch by Xmas.

Apple sold 47.5 million iPhones, a 35 percent gain, in the period that ended in June, the company said in a statement early this morning.

Analysts had anticipated 48.8 million shipments. The company forecast revenue of US$49 billion to US$51 billion in its fiscal fourth quarter, which ends in September, short of the average estimate for US$51.1 billion, according to data compiled by Bloomberg.

Bloomberg said that any indication of slowing demand for iPhones could spark concern that Apple is going to have a hard time selling more smartphones in the final months of the year, after the September debut of the latest version fuelled record profits. A new model is expected to be released later this year.

"It's going to be running up against really hard comparisons," said Abhey Lamba, an analyst at Mizuho Securities in New York "A lot of people jumped to the larger-screened iPhones, now that we've gotten to the point where the innovation in the next release is not going to be as massive as we had last year."

Apple shares fell as much as 8.8 percent in extended trading. The stock declined 1 percent to US$130.75 at the close in New York, leaving it up 18 percent this year.

Revenue in the fiscal third quarter, which ended in June, was US$10.7 billion, or $1.85 a share, while revenue rose 33 percent to $49.6 billion, the Cupertino, California-based company said. Analysts on average had forecast third-quarter profit of $1.81 a share on sales of $49.4 billion. The gross margin was 39.7 percent, topping the company's outlook for 38.5 percent to 39.5 percent.

Total revenue from greater China more than doubled to $13.2 billion, even as the Chinese economy weakened.


Apple didn't release unit sales of the Apple Watch, which was introduced in April.

 It included the results for the smartwatch in a broad category called "Other," along with items such as Beats headphones and iPod sales.

Revenue in the category rose 49 percent to $2.64 billion, the company said. Analysts predicted on average 3.4 million sales of the Watch with an average selling price of $499, according to the Bloomberg survey.

"We looked back at similar periods for iPhone and iPad when they were originally launched, and we've actually sold more Apple Watches than we sold iPhone and iPad at the time," Luca Maestri, Apple's chief financial officer, said in an interview. "We feel very good about the start and what we feel particularly happy about is, frankly, the customer response, the feedback we're getting."


IPad Slump

IPad sales continued to suffer, with tablet shipments falling 18 percent to 10.9 million, marking the sixth straight quarter of declines and matching analysts' average estimate. Apple is working on a new larger-screened version of the iPad that could appeal to corporate customers looking to use the device as a replacement for a laptop computer, people familiar with the plans have said.


Mac shipments climbed 8.7 percent to 4.8 million, matching projections.


Cook called the iPhone 6 a runaway success, and that the product category is continuing to gain significant market share. On the call, he said that the phone's growth was triple the rate of the smartphone market overall.


"We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch," Cook said in the earnings release.


On the Apple Watch, Cook said that the newest product has exceeded expectations, and that the company will expand point of sale for its watch with JB Hi Fi, Harvey Norman and Dick Smith tipped to be selling the Apple Watch by Xmas.


Other product revenues were $2.6 billion on the quarter-compared to $1.7 billion the prior quarter. Analysts were expecting $1.8 billion of watch sales alone (which are included in that "other" figure).


Apple's cash pile broke above $200 billion for the first time ever, hitting $203 billion. That is up 5 percent from the prior quarter, and up 23 percent from last year.