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Apple shows how to spin bad news

by on02 August 2017

Falling profits, lower sales, chinese outlook bleak – press still goes mental

The fruity, tax-dodging, cargo-cult Apple managed to convince the world’s press it was doing ok despite falling iPhone sales, declines in China and a fall in profits by 14.6 percent.

Apple appears to have also fobbed off concerns about delays of its new iPhone by revealing a marginal increase in sales of its existing effort.

The launch of the latest iPhone could potentially move to October or November, instead of September, due to production problems, but Apple did not want to talk about that. Instead it claimed that its sales of the current iPhone were higher than expected.

It told the press that phone sales were staggering 1.6 percent, or 41.03 million higher in the third quarter.

The Tame Apple Press went mental, and along with adverts for the coming iPhone sent the company’s sales up six percent. To put this figure in perspective a 1.6 percent difference in predictions is well below a three percent accounting margin of error.

To make matters worse, the figures confirm that the iPhone cash cow is still dying. This is the the second quarterly drop in iPhone sales in its third quarter earnings.

The new sales figures include its most recent phone, the iPhone SE, a cheaper four-inch display phone. Considering the iPhone takes up nearly two-thirds of the company's revenue, this isn't good.

All that is different is that the drop was expected by analysts.

The real truth of the figures is that Apple reported revenue of revenue of $45.4 billion billion, up seven percent year-over-year.

Apple's fourth quarter generally includes first-weekend sales of the company's latest devices so the delay in the new phone is crucial.

The company said iPhone sales rose 1.6 percent to 41.03 million in the third quarter ended July 1, above analysts' average estimate of 40.7 million units, according to FactSet StreetAccount. Apple sold 40.4 million iPhones a year earlier.

Other warning signs for Apple is that that its Chinese sails are going down the toilet. Apple needs China to keep its growth. Apple's revenue from the Greater China region fell 9.5% to $8 billion in the latest quarter, as consumers switched to newer domestic offerings.

Chief Financial Officer Luca Maestri did a good job spinning this news too. He said China sales appear to have stabilized after several quarters of much larger declines. In fact the region saw a 21.6% jump in the company's services business - which includes the App Store, Apple Pay and iCloud - to $7.27 billion.

Last modified on 02 August 2017
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