Friday, January 31, 2014

Apple Highest Quarterly Revenue fails to enthuse Markets

Apples profit by products

Apple  reporting  its highest every quarterly revenue  from $
54.5 billion a year earlier to $57.6 billion. However  the stock fell by more than 8%  with shares down to $506 , and this ins spite of Apple rolling out new  products last year

But, although the company sold a record number of 51 million iPhones during its latest quarter, it fell short of financial analysts’ expectations of 55 million. So whats the reason of the Thumbs down from wall street ?

According to Forbes Its  the Lower Guidance which hurt Apple more than anything else. However there are some other forces in the Market that has started impacting Apple's Performance 

The Smartphone market has today turned “ nasty and hyper competitive with ‘margins shrinking  everyday, and technology differentiation is not enough to " substitute a  brand switch..  with lower prices and smaller PLC ( product lifecycle ) The Life Cycle of a Mobile is hardly 6 months to a year and to top that home grown Mobile Brands are ruling the roost in China and India  ( Huawei and Micromax )

The Mobile Revolution is led by  Chinese and Indian  economies as local brands continue to grow at a brisk pace with, lower technology and cost barrier  Apple's iPhone has   stopped being inspirational.. as local brands  turn out cutting edge technology at a extremely competitive price

The Technology and cost barrier has been broken and Apple is gradually realizing that it needs to grow faster .. but  in the smartphone business..  their time is over ..

The  2008 to 2011 smartphone revolution is dead. A company of the size of Apple cannot stick to making smartphones with a premium...Apple cannot compete with a Huawei and Micromax  in their own markets ( China and India ) 

This overdependent on Smartphones has led to the fact that : Apples smartphone business generates generated 56% revenue . with 70% profits

With a zero-growth  quarter looming, Apple needs to show it can still innovate


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