Apple Inc has predicted slow holiday sales after the company revealed its Q4 earnings report in Oct. 28. It will be the slowest holiday sales growth for the company in five years. This reflects the growing competition that Apple continues to face as iPhones and iPads were no longer providing the surge in growth they once did to outperform rivals in the increasingly saturated mobile market.
This trend was highlighted when the Cupertino-based tech giant said revenue for the current quarter is predicted to be $55 to $58 billion. The figure is expected to be higher by 0.9 per cent to 6.4 per cent from last year's revenue of $54.5 billion.
If Apple's predictions will come true, the holiday season for 2013 will be Apple Inc's slowest sales growth since 2008. The company's profits are expected to be the same in 2012, according to Apple's gross margin forecasts.
Apple Inc's prediction deviates from its 2011 and 2012 forecasts when Apple had foreseen holiday sales to grow as much as 70 per cent. While Apple's iPhones, iPads and Macs have upended the tech world, CEO Tim Cook saw Apple stocks drop by 25 per cent from 2012 as the company's profits declined for the first time in ten years.
The world's most valuable and most innovative brand, according to research and surveys, is struggling with Samsung for market share as the Korean electronics gadget took a bigger piece of the pie with low-priced smartphones and tablets.
BTIG analyst, Walter Piecyk, questioned Apple Inc's ability to come back from negative growth. He said there are signs that the iPhone and iPad maker can return to growth in 2014 with higher profit margins and expected sales in other countries like China as Apple looks to emerging markets for expansion.
Mr Piecyk said Apple had $5.73 billion sales in China in the last quarter which was higher at 5.6 per cent from 2012. Apple sales in Japan also rose by 41 per cent or $3.34 billion after the company struck a deal with Japan's largest mobile carrier, NTT Docomo Inc to begin selling the iPhone to its subscribers.
Oracle Investment Research analyst Laurence Balter said Apple's product line has a strong demand. She said Apple just needs to return to positive growth.
As of 9:32 am in New York, Apple shares rose 1.1 per cent at $535.43. Apple Inc has released the iPhone 5C, iPhone 5S, iPad Air, and the iPad Mini with retina display in time for the holiday season, viewed as Apple's most important and critical quarter.
In a conference call with analysts, the new iPhone 5S is highly in-demand and expects the newly-released iPads to receive the same interest from consumers. The new iPad Air will hit Apple stores in Nov. 1 as the iPad Mini with retina display will follow suit later on in the month.
Mr Cook, the successor of the iconic Apple co-founder Steve Jobs, said "it's going to be an iPad Christmas." He also made hints during the earnings conference call that the company is currently developing new products for release in 2014, including product categories Apple has yet to enter.
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