The decision to delay the launch of Apple’s iPhone 12 temporarily cost the company $100 billion in stock market value, as it plunged over 5% at one point in after-hours trading on Thursday.
Apple reported the most significant quarterly decline in iPhone sales in two years, following its decision to postpone the traditional September launch event by one month to 13 October. This largely contributed to iPhone sales plummeting 20.7% to $26.4 billion globally, and by 28.5% to $7.95 billion in China.
September has been Apple's favoured release window for the past seven years, however, after what appears to have been manufacturing delays due to the coronavirus pandemic, the company announced in August it would be postponing the release.
Due to the delay, the opening-weekend sales of Apple’s flagship smartphone are not included in the fiscal fourth-quarter results, which ended on 26 September. Apple CEO Tim Cook told Reuters that, based on the first five days of shipping data, he remains “optimistic” about the iPhone 12’s success.
“What we’re seeing in the early going in the first five days gives us a lot of confidence that China will return to growth in our fiscal Q1,” he said, describing 5G as a “once-in-a-decade kind of opportunity”.
“We could not be more excited to hit the market exactly when we did,” he added.
The $100 billion drop in stock market value has exposed how heavily Apple relies on timing to generate the success of its financial results, although the decline is more a symptom of difficult market conditions rather than a reflection of Apple's worth.
Overall, Apple exceeded analyst revenue and profits expectations, reporting $64.7 billion and 73 cents per share instead of the $63.7 billion and 70 cents estimated by IBES data from Refinitiv.
Despite poor iPhone sales, the company said that the revenue from its accessories segment was up 20.8% to $7.9 billion, compared with Refinitiv estimates of a 13.5% rise to $7.4 billion. Mac and iPad sales were also strong, at $9 billion and $6.8 billion, compared with analyst estimates of $7.92 billion and $6.12 billion – likely buoyed by strong demand for hardware as many continue to work from home.
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Having only graduated from City University in 2019, Sabina has already demonstrated her abilities as a keen writer and effective journalist. Currently a content writer for Drapers, Sabina spent a number of years writing for ITPro, specialising in networking and telecommunications, as well as charting the efforts of technology companies to improve their inclusion and diversity strategies, a topic close to her heart.
Sabina has also held a number of editorial roles at Harper's Bazaar, Cube Collective, and HighClouds.
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