Will Apple Report Its First Profit Drop Tomorrow?


Dark clouds are gathering above Tim Cook’s head. Eighteen months after he took over the CEO position, Apple is expected to report a 2% drop in net income, or about $12.8 billion, the first drop according to Bloomberg’s data – except one quarter in 2003 – and report the slowest growth rate since 2009 with an 18% rise in sales.

The forecast comes on top of the nearly 30% drop of Apple shares since its peak recorded in September, due to reports of dropping demand for the iPhone.

But there is another potential reason for the decline: the rivalry between Samsung and Apple. The latter simply can’t catch up with the South Korean manufacturer, which has 80 smartphones for sale right now and it is already preparing the launch of its next generation flagship smartphone, the Samsung Galaxy S IV. In terms high-end smartphones, however, Samsung sales don’t perform as well as some may think, as the latest numbers and estimates show.

Apple, however, seems to perform well, despite analyst concerns evidenced by the latest statistics. Yet the main reason for analysts raising the red flag remains indications of Apple’s core market shrinking. Emerging markets, like China – Apple’s second biggest market according to Tim Cook – aren’t willing to pay the premium price for an iPhone, especially when considering that it’s an average worker’s six-weeks pay.

The majority of analysts doesn’t share worries about Apple’s growth, though. Some analysts, like Kathy Huberty of Morgan Stanley, suggest to investors that this slide is a good period to buy. But the recent signals suggest that Apple is moving away from the “hyper growth” period, given the simple fact that if growth continues at the same pace for another five years, it would reach the size of Australia’s gross domestic product.

So how did Apple perform under Tim Cook? The quarterly earnings report scheduled for tomorrow will solve the mystery of numbers.

[Via Bloomberg]


  • The sad thing is that people will blow this out of proportion. Even with a 2% drop, Apple is still make a HUGE yearly profit. Fists of money.

  • Snicker

    Your kidding, right? ONLY an 18% gain in profit? There was a time when bad news was when a company DIDN’T make a profit! Good see the greedy analysts aren’t happy with that gain while the rest of us are only earning 2-3%. Talk about a screwed up mentality.

  • KDsP

    They gotta let Timmy go

  • rob0302

    Apple should invest all of their Cash on Hand in cloning technology.. This way, once perfected, they will be able to dig up Mr. Jobs and create a Job’s Clone who could once again take control of the company and bring them to new heights..
    All joking aside, I agree with the guy below who said even if profits drop 2% they’re still making a S#$# load of money. Problem with todays economy partially lies with the fact that share price is based on projections as opposed to actuals.. Ohhh.. Analysts predicted Apple would make $10B this year, they only made $9B, SELL SELL SELL!!!!!