Apple stock slumps amid iPhone sales worries

SAN FRANCISCO -- Apple fans keep buying iPhones, but Wall Street keeps worrying the company won't be able to match last year's blistering sales pace.

See Full Article

Shares in the world's most valuable company have fallen more than 15 percent over the last month, amid a drumbeat of news reports that some Asian parts suppliers are expecting Apple to trim orders for its signature smartphone this winter. Those fears were compounded Wednesday when the Wall Street Journal said one of Apple's most important contractors is sending some workers home on "early holiday" before the Chinese New Year in February.

Even an upbeat report from Apple announcing that its online App Store set a sales record last week failed to boost the stock. Its shares fell just under 2 percent Wednesday and closed at $100.70.

Apple Inc. declined comment Wednesday. But top executives at the Cupertino, California, company said last fall they expected to sell more iPhones during the last three months of 2015 than they did a year earlier, when the company sold a record 74.5 million.

As evidence for his optimism, CEO Tim Cook said in October that a growing number of consumers were switching from rival Android phones to iPhones, while many current iPhone owners had not yet upgraded to newer models. Cook has also cautioned against drawing conclusions based on reports from individual contractors, since the company has an extensive supply and production network.

The iPhone is crucial for Apple, since it provides almost two-thirds of its revenue. The latest iPhone 6S and 6S Plus models, introduced last fall, have several new features, but analysts say they aren't dramatically different from previous 6 and 6 Plus phones that went on sale in late 2014. Experts also say the global smartphone market isn't growing as fast as it did a few years ago, because many people already own one.

Sales of the 6S phones appear to have slowed during the recent holiday season, Rosenblatt Securities analyst Jun Zhang wrote in a note to clients Wednesday, adding that two of Apple's Asian contractors have reduced their production forecasts.

Apple has introduced other new products in recent months, including the Apple Watch, iPad Pro and a new Apple TV control box. But they "have not become meaningful revenue resources to offset slowing iPhone sales in 2016," Zhang wrote.

Those worries have dogged Apple's stock for months. After peaking at $134.54 in April, the stock ended the year at $105.26. Still, many analysts are still bullish. Daniel Ives of FBR Capital Markets called the reports from China "worrisome." But he added in an email that he believes the next iPhone models, expected in September, will offer more significant improvements and produce another "mega" sales cycle.

Apple, meanwhile, said Wednesday that its App Store set a record for sales over the holidays, with sales of apps and in-app purchases totaling more than $20 billion in the full year 2015. Apple generally keeps 30 percent of App Store revenue, passing the remainder to app developers.

The company didn't disclose app revenue for 2014. But it said previously that 2014 app revenue grew 50 percent from 2013, when it reported more than $10 billion in app sales. That implies sales were somewhere over $15 billion in 2014 and may have grown at a somewhat slower pace in 2015.



Advertisements

Latest Tech & Science News

  • 'I'm sorry to hear that': Why training Siri to be a therapist won't be easy

    Tech & Science CBC News
    We already turn to our smartphones for help with all sorts of tasks, such as checking the weather or getting directions. But could the next role for your hand-held device be as your therapist? Apple plans to make Siri, its digital assistant, better at responding to people's mental-health issues — an ambition that has raised serious ethical concerns among some health experts. Source
  • The problem with Star Trek aliens: Bob McDonald

    Tech & Science CBC News
    As yet another incarnation of the Star Trek franchise takes to the airwaves this week, devoted fans will be thrilled to set off on another continuing mission to seek out new life and new civilizations. But why do so many of those aliens always look humanoid? The reality is, when we do contact civilizations from other worlds, chances are, they will look nothing like us. Source
  • Climate change scientists fight for funding to save High Arctic lab

    Tech & Science CBC News
    Some of Canada's leading climate change scientists are fighting to keep the country's northernmost research station in operation. The Polar Environment Atmospheric Research Laboratory (PEARL) in Eureka, Nunavut, tracks atmospheric data that no other research station can, given its High Arctic latitude, only 1,110 kilometres from the North Pole. Source
  • Right whale skeleton, DNA headed to Canada's largest museum

    Tech & Science CBC News
    Scientists at the Royal Ontario Museum in Toronto are hoping that some good can come from three dead North Atlantic right whales, towed to a beach on P.E.I. this summer. Final report on right whale deaths still weeks away, say AVC pathologistsRight whale necropsy underway on P.E.I. Source
  • Asteroid mining could support space economies, colonies

    Tech & Science CBC News
    A team of researchers are planning to send robotic spacecraft into outer space, land near asteroids hurtling through the abyss and mine them for water, metals and other elements that will make colonizing space that much easier. Source
  • Algae on river flowing into Lake Erie prompts warning

    Tech & Science CTV News
    TOLEDO, Ohio -- Health officials in Ohio are telling children, pregnant women and people with certain medical conditions not to swim in the river that flows through Toledo because of an algae outbreak. The Maumee River along the city's downtown waterfront has turned unsightly shades of green the past few days, leading local health officials to issue a recreational advisory Thursday. Source
  • #BugsR4Girls: How 8-year-old Sophia Spencer co-authored a scientific paper on bugs

    Tech & Science CBC News
    Sophia Spencer hated it when classmates taunted her for her love of insects, but seeing them kill her pet grasshoppers for fun was even worse. Her first-grade peers couldn't understand what she found so fascinating about bugs of all sorts or why she'd devoted spare time to catching them, reading about them and generally carrying on like a budding entomologist. Source
  • Tech firms and lawmakers celebrate new trans-Atlantic cable

    Tech & Science CTV News
    WILLIAMSBURG, Va. -- Lawmakers and tech industry leaders have announced the completion of a new high-speed data cable that stretches across the Atlantic Ocean. Representatives from Facebook and Microsoft joined with Virginia's governor and two senators in Williamsburg to celebrate the cable's completion on Friday morning. Source
  • Ont. girl who was teased for love of bugs gets name in science journal

    Tech & Science CTV News
    Sophia Spencer hated it when classmates taunted her for her love of insects, but seeing them kill her pet grasshoppers for fun was even worse. Her first-grade peers couldn't understand what she found so fascinating about bugs of all sorts or why she'd devote spare time to catching them, reading about them, and generally carrying on like a budding entomologist. Source
  • Help from above: Canadian satellite assists with hurricane recovery, other natural disasters

    Tech & Science CBC News
    When Hurricane Irma cut a path of destruction through the Caribbean this month, authorities on the ground found themselves in the dark, scrambling for information. High above the storm, satellites from several nations, including Canada, were called into action to track the hurricane's progress, measure the damage and provide vital information to plan rescue and recovery efforts. Source