Disappointed investors dump Apple shares
Apple's shares fell more than 7 per cent to trade at US$511 yesterday morning after the company released first-quarter results that disappointed investors.
On Monday, Apple reported iPhone sales for the holiday season that trailed analysts' estimates, in what is typically the most lucrative period of the year for the company.
The results underscored why it is crucial for chief executive Tim Cook to deliver the company's first new products since 2010 to revive growth.
Apple also projected a possible year-on-year decline in revenue for the current quarter, which would be the first quarterly sales drop since 2003. Last year, it reported its first profit decline in more than a decade.
The figures indicate that demand may be ebbing for Apple's devices - which were once reliable growth engines - as competitors flood in with their own smartphones and tablets.
Cook said sales in North America were weaker than expected, partly because the less-expensive iPhone 5c released last year was not as popular as the higher-end iPhone 5s.
The stagnating growth is adding to pressure on the company to release new hit products, be it a wearable computer or a way of paying for things through an iPhone or a television.
"What we have got over the last year or so is impressive products, but they are really enhancements of current products and not necessarily the next new thing," said Jack Ablin, the chief investment officer at BMO Private Bank. "Apple investors want the next new thing - that's the catalyst that people are waiting for."
Cook said the company was growing in emerging markets and that new products were coming.
For its fiscal first quarter to December, Apple said it sold a record 51 million iPhones, missing analysts' estimates of 54.7 million handsets.
Even after releasing the iPhone through the world's largest carrier, China Mobile, this month, Apple also said revenue would be US$42 billion to US$44 billion in the current quarter, compared with analysts' estimates of US$46.1 billion. Anything short of US$43.6 billion would amount to a sales decline from a year earlier.
Apple's profit in the past quarter was US$13.1 billion, or US$14.50 a share, compared with US$13.1 billion, or US$13.81 a share, a year earlier. Sales rose 5.7 per cent to US$57.6 billion.