Newspaper article International Herald Tribune

Self-Restraint by iPhone Fans Weighs on Apple ; Quarterly Profit Misses Forecasts as Clients Hold out for Newest Model

Newspaper article International Herald Tribune

Self-Restraint by iPhone Fans Weighs on Apple ; Quarterly Profit Misses Forecasts as Clients Hold out for Newest Model

Article excerpt

Apple expects to gain market share in the smartphone business this year with the release of its latest iPhone. Many buyers are holding off on purchases until its release.

It looks as if many people are so sure the next iPhone is going to be good that they are not buying the ones Apple is selling now.

A lot of companies would love to have that problem -- if it can be called a problem, given that Apple still managed to sell 28 percent more iPhones last quarter than it did a year earlier.

Yet in the world of outsize expectations that envelops Apple, it still contributed to a rare earnings disappointment for the company Tuesday. In response, the company's stock was down 4.7 percent in afternoon trading Wednesday in New York.

In the past, Apple has felt the pain of delayed iPhone purchases mostly in the summer quarter that ends in late September, but it can start before then.

"We're seeing it earlier than ever," said Gene Munster, an analyst at Piper Jaffray, who had predicted Apple would sell 29 million iPhones in the quarter, rather than the 26 million it reported.

The iPhone appeared to be the main issue. In a now-familiar pattern, analysts have been warning of potential weakness in iPhone sales because of the likelihood that the company would introduce a new version of the phone in the autumn. Apple invariably brings out a new model around that time, and the anticipation can cause many phone shoppers to delay their purchases, leading to a surge in the holiday quarter.

During a conference call with analysts, Apple executives blamed economic weakness in Europe, Australia, Brazil and other countries for some of the shortfall in iPhone sales. But the company also said that the widespread chatter about whatever smartphone it would sell next had been a significant factor.

"We're reading the same rumors and speculation you are about a new iPhone," said Peter Oppenheimer, Apple's chief financial officer. …

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