Apple shares down 10% as revenue growth slows
Apple's revenue growth is slowing drastically, as iPhone sales plateau and the company finds itself lacking revolutionary new products.
The company's warning, issued last night as part of its financial results for the Christmas quarter, sent Apple's stock plunging by over 10%, wiping out a year's worth of gains.
Analysts said the warning suggested Apple can no longer sustain its growth without some completely new products. Its last revolutionary creation, the iPad, was launched in 2010.
Co-founder Steve Jobs, who was the engine behind the creation of the iPod, iPhone and iPad, died in 2011.
Apple said it expects sales of between $41 billion and $43 billion in the current quarter, which ends in March.
That would usually be little cause for concern, even though analysts were expecting $45.6 billion, because Apple usually keeps its forecasts low.
But chief financial officer Peter Oppenheimer said the company is changing its practices and providing a reasonable range rather than a single, easily achievable number.
That means Apple is looking at sales growth of about 7% from last year's January to March quarter, a striking number for a company that has posted double-digit increases in every quarter except one since 2008.
Apple's enviable profit growth also hit a wall in the October to December quarter. It said net income in the fiscal first quarter was $13.1 billion, or $13.81 per share, flat with a year ago. That still beat expectations, as analysts had forecast earnings of $13.48 per share.
Revenue was $54.5 billion, up 18% from a year ago. But analysts had been expecting $55 billion. Sales were held back by the fact that the latest quarter had 13 weeks, one less than the corresponding 2011 quarter.
Apple said it shipped 47.8 million iPhones in the quarter, about 1 million less than analysts were expecting, and 22.9 million iPads, also about 1 million short.
Most surprisingly, Mac sales were also 1 million short, at 4.1 million. That is a 22% drop from shipments a year ago. Oppenheimer said this was because Apple could not get the new iMac desktops out before December.
Most technology companies would be ecstatic if they posted 18% sales growth and $13 billion in profit for a single quarter, but Apple is held to a high standard, set by the shocking, iPhone-propelled success of the last few years.