Apple shares fell 5 percent immediately after it reported figures for the last quarter of 2013. Market analysts described the company’s earnings as “disappointing”.

On a brighter note unit numbers were noticeably higher than a year ago. The Wall Street Journal reports:

For its flagship products, Apple said it sold 51 million iPhones, an all-time quarterly record, versus 47.79 million units in the year ago period. iPad sales rose 14% to 26 million units. Sales of Mac computers climbed 17% to 4.8 million.

Apple result needs to be seen in the context of other device companies – most of which had a rougher than expected end to 2013. Samsung, possibly Apple’s closest rival, also reported lower profitability in the same quarter, while Nokia saw unit numbers fall significantly.

The company’s gross margin was a little lower at 37.9 percent compared with 38.6 a year ago.

Given few other technology companies make it into double digits, it’s a little early to start forecasting the company’s decline. And most of us would be quite comfortable with that level of “disappointing”.

4 thoughts on “Hidden gold in Apple result

  1. iPhone sales might be peaking though. Which implies more difficulty in selling product at those sort of GM levels in future. Plus, a lot of that GM derives from Apple giving the channel tiny margins on a basis that Apple stuff is so desirable they will be happy to sell it on any basis? If they start to have to give the channel more margin, those GMs might shrink rapidly.

    The 17% Mac sales increase would seem a lot more pleasing – driven I think by all competing laptop product being ugly, ugly, crap.

    • Part of those high margins is probably down to Apple owning a large slice of its online and physical retail outlets.

  2. I don’t know but I have to ask myself if this is a case of only increasing growth will do? Apple makes money, lots of it. This simply isn’t in dispute.

    But what the investors seem to want is not a return but an continually increasing rate of return, dare I say ‘exponential’?

    On one level I get that, you just put your money into Apple and everybody who has put money in so far saw a growing return. You want that too.

    On another level you have to ask yourself how long anybody is going to think that will be sustainable.

    Surely the smart people who control investment at this level know that trying to achieve this will probably end badly, right?

    • Good point. When you are already the world’s most valuable company there’s little room for more exponential growth.

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