Apple Inc (NASDAQ: AAPL)’s Third Quarter Sales Are Looking To Slide

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Apple Inc (NASDAQ: AAPL)’s third quarter sales have analysts reporting a wide range of figures. Predictions for the company’s iPhone sales are anywhere between 31.8 million to 39.7 million units.

According to Electronista, the following analysts have released their predictions:

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This huge range of estimates means that it is nearly impossible to call an accurate figure for the company’s third quarter. The estimation range is almost 8 million units, which is about $5 billion difference in revenue (given that the average going price for an iPhone is roughly $600). Taking into account the $300 Apple’s iPhone contributes to pre tax profit (give or take a bit), it is estimated that Apple pays taxes at about a 26% rate, and thus over $1 billion of income for the company is at risk.

As for iPads, analysts’ calls are not that much more accurate, ranging fro 12 to 16 million iPads. The 4 million units difference translates to abot $1.6 billion in revenue, but means less material profits than the iPhone to the tech company.

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However, it seems that these approximations are generally stretched. The growth for the smartphone market has slowed down this year, with an estimated growth around 20% year over year. Growth in China is particularly weak. According to Kantar World Panel, Apple is losing its market shares in many countries around the world. Slower growth and decreasing market share do not lead to more unit sales.

A method Apple has been using to bolster sales in the latest quarters is by selling the iPhone 4S in emerging markets for discounted prices. By selling the aged iPhone, Apple can maintain its market share, but does not significantly help its net income. Some analysts estimated that 10 million of the company’s second quarter sales of 43 million were from the 4S models. While that quarter was a success for the company, the sales would have been disappointing had it not been for those 10 million iPhone 4S sales to keep the company’s head above the water.

Despite the high number of units sold, the average selling prices actually decreased. Thus, Apple’s year over year profit increased only slightly in the second quarter. Earnings per share increased, mainly due to share buybacks.

Apple’s competition against Samsung, another powerful force in the industry, has not subsided in the smartphone and tablet market. The South Korean electronics company reported a softer June quarter, attributing its weakening sales to slower growth and growing competition. It is only natural that to assume that Apple is pressured by these same factors.

 

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