The company failed to sell as much of its iPhones as analysts had hoped and it also warned that its earnings would not be as good as analysts expected.
Advertisement
“We think it’s hard to spin an estimated 2.2 [million] Watch shipments in the June quarter positively given it missed our 3 [million] estimate”, Katy Huberty, an analyst with Morgan Stanley, wrote in an investor note obtained by Mashable.
“Apple Watch launched in sixteen major countries and saw decent take-up from iPhone loyalists in the United States and elsewhere”, Strategy Analytics Executive Director Neil Mawston said in a press release.
“The watch is at a very early stage right now and the story has yet to evolve”, said analyst John Jackson with IDC, who estimates 2.4 million watches were sold in the quarter.
Apple’s stock fell almost 6 percent in late trading, indicating investors weren’t satisfied with the report. Revenue from the iPhone product range was actually up by 59 percent for the quarter, in comparison to 2Q14.
There are many reasons that led to the vast popularity of these two versions of iPhones. Still, with iPhone sales at 47.5 million during the quarter, up 35 percent from the same period a year earlier, and profit surging 38 percent, Cook said he was thrilled with the quarterly results. By posting revenues of $49.6 billion and adjusted earnings per share (EPS) of $1.85 for the quarter, Apple yet again surpassed consensus estimates for revenue ($49.4 billion) and EPS ($1.81 per share). The tech giant seemed intent on allaying any fears by providing plenty of upbeat commentary about strong Watch sales – without specifics – during the company’s third-quarter earnings conference call Tuesday. China sales more than doubled from a year ago. This is a big deal not just in terms of sheer sales numbers, but also because an increased Chinese user base will have an impact on sales of ancillary products and services like those from the App Store.
The company’s iPhone 6 and 6 Plus, which shattered iPhone sales records when they were launched, are already 10 months old.
Most analysts are not quite celebrating the news as many are used to the innovation company to blowing their socks off in sales, instead they came too close to what was expected. Apparently, it was not enough for Apple and the market was clearly expecting more. While not expected to be an important revenue source now, the watch has symbolic importance as the first new product category that Apple has launched since the 2011 death of founder and iconic CEO Steve Jobs.
Cook pointed to emerging markets where he said Apple is “doing well”, adding “I look around, I see opportunity left and right”.
Supply of the Apple Watch has begun catching up to demand, but Apple isn’t about to talk numbers.
Advertisement
Mr Cook said watch had enjoyed a “great start”, but has said he does not want to give more detailed figures to avoid giving competitors inside information.
