Apple: "product transition" in Sept. quarter
updated 12:35 am EDT, Thu July 26, 2007
"Product transition" in Q4
Though cagey as usual, Apple CFO Peter Oppehnheimer did let slip an alluring statement during Apple's third-quarter earnings conference call. Responding to analyst questions about why Apple is guiding lower-than-expected earnings for next quarter (65 cents a share versus a consensus of 82 cents), Oppenheimer said that there are three expected factors: rising prices for components like NAND flash memory used in the iPhone and iPod, the high cost of back-to-school promotions, and a "product transition" on which he refused to elaborate. Apple is guiding for higher sequential revenue next quarter, $5.7 billion vs. $5.4 billion in the current quarter, which is not to be unexpected thanks to a typical, annual boost from education sales. However, the higher revenue guidance and lower earnings guidance could indicate a new product introduction with lower margins or a high capitalized R&D cost.
For its third quarter, Apple report yet another a record set of earnings, earning $818 million on revenue of $5.41 billion to mark the highest June quarter revenue in the company's history. Gross margin was 36.9 percent, higher than guidance primarily due to favorable commodity costs -- something that could change in the fiscal fourth quarter when Apple is expecting a gross margin of 29.5 percent. The earnings sent Apple's stock spiraling upward in after-hours trading, gaining nearly 10% before midnight.
Fresh-Faced Recruit
Joined: Feb 2004
transition which hurts?
What kind of transition hurts the bottom line? It has to be something that hurts current sales. Therefore it has to be announced long before it's debuted. This is not something that they'd do with a new iPod/Apple TV. No with that, they'd just flip a switch from selling the old to the new with no lead-time.
What sort of transition could it be? Not the transition to Leopard, again that's a swap-out with Tiger, not significant numbers of users are holding off buying Macs because of Leopards impending release...
It's possible they will announce the new iMacs, but not have it ready for sale, but I'd doubt that. They'd wait until they could take orders that could ship in x-y weeks.
The only thing that could logically be announced long before it's available for sale, thus cannibalizing current sales, is a phone device which needs 6 months of FCC clearance.
There must be a lower cost iPhone on the way that will significantly impact sales of iPod Nanos and iPhones.