Apple is due to announce its fourth fiscal quarter this Monday but analysts are starting to speculate that iPhone sales might be lower than expected and disappoint investors. Let's see what the fuss is about and how could our favorite gadget possibly disappoint anybody.
By third quarter Apple had already sold 26.38 million iPhones give or take. The analysts consensus was to expect around 7 million additional iPhones sold this quarter but Oppenheimer & Co. has sent the following note to its clients this friday:
We believe Apple could report in line to slightly disappointing fiscal fourth quarter revenue
So they are advising their clients not to buy Apple stock until Monday. Why ? Well, if sales don't match expectations on Monday the stock might drop. Secondly Apple is introducing a new accounting method. Normally in accounting, you're supposed to account for the money you made at the moment you make it. Until now, every time an iPhone was sold, only a part of the revenue was accounted for and the rest was spread over time, this is because most sold iPhone are subsidized and Apple generates revenue from the carriers as your plan goes by.
From now on Apple will be accounting its sales as they happen and the entire value of the phone can be counted as revenue at the moment of the sale (around 500$ per device from what i know). This could mean an increase in immediate revenues but also a decrease if the sales expectations aren't matched.
Another point is that Steve Jobs announced at the "It's only Rock and Roll" event that a total of 30 millions iPhones had been sold, this only three weeks before the end of the quarter. If we go from the idea that Jobs gave us a precise number, it would mean that between the event and the end of the quarter, Apple sold 3.5 million units, which doesn't seem realistic. Of course Jobs might have just announced a round number and the actual sales might have been bigger.
Another point of Opennheimer's analyst is that Apple has been unable to provide the demanded number of units, many countries were out-of-stock because of components shortage and he expects this to also have a certain impacts on the results.