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Apple, a day after announcing record quarterly revenues, is celebrating the anniversary of the device that started it all.
“On January 24, 1984, Steve [Jobs] introduced the first Macintosh right here at a shareholder meeting in Cupertino,” Apple CEO Tim Cook told analysts Jan. 23, opening the earnings call for Apple’s fiscal 2013 first quarter.
Cook continued:
On the evening news that night, they said it was supposed to be one of the easiest computers to use, and thanks to the new mouse, you hardly have to touch the keyboard. We have come a long way since 1984, but we rely on the same spirit and drive that brought the original Mac and other revolutionary products like the iPod, the iPhone and the iPad into the world.
You are going to hear a lot of impressive numbers during this call, but they are not the only way that we measure success at Apple. The most important thing to us is that our customers love our products, not just buy them, but love them.
With those last two sentences, Cook seemed to indeed acknowledge and justify all that came next—impressive numbers and an impressive backlash.
Apple announced record revenues of $54.5 billion during the quarter, which was 13 weeks, rather than the 14 weeks of the same quarter a year ago.
It sold 3.5 million iPhones and 1.7 million iPads during each week of the quarter, and each week earned $4.2 billion, compared to $3.3 billion during the first quarter of 2012. In China—the world’s largest smartphone market—Apple’s growth rate was in the triple digits, and its iPhone growth sequentially increased 70 percent over the September quarter.
Still, Wall Street expects more from the company that has been wowing consumers since that January 28 years ago, and after the day’s closing bell, news of Apple’s first quarter results sent its value plummeting by nearly $50 billion.
On Seeking Alpha, one contributor opined that investors who were hoping for a blow-out quarter got a “blow up” instead.
Another announced that “Apple’s growth story is over.”
Apple “had a nice run, but the latest earnings release, conference call and guidance all signaled one thing: the growth story is more or less done, the obscenely high margins on commodity phone and tablet products, and even the market share gains against Microsoft’s Windows are all coming to end,” wrote Ashraf Eassa.
Others were more tempered, while still suggesting the shine was off the apple.
“Apple’s Q4 performance was not only hampered by supply-chain restraints, but also by increasing competition from Samsung and other manufacturers vying for the premium consumer market,” Andy Castonguay, principal analyst with Informa Telecoms & Media, said in a Jan. 24 report. “With modest but growing sales of Windows Phone devices as well as a revived product line expected from BlackBerry, Apple’s products have begun to lose their ‘innovative’ top luster, even while still representing the competitive standard in the industry.”
If Apple wants to “firmly reestablish its claim as the industry’s bellwether,” added Castonguay, Apple’s next generation of devices and software “will need to push into new, exciting design territory.”
Technology Business Research analyst Beau Skonieczny pointed out that while China represents a growth area for Apple—and that Apple’s sales in China have increased 67 percent since the fourth quarter of 2011—it also represents a challenge.
The analyst firm believes that Apple is limited by its relatively limited retail and channel presence in China and so has yet to “replicate the success of its retails stores in China and emerging markets,” wrote Skonieczny.
He added that Apple has yet to pen a deal (or at least announce one) with China Mobile, China’s largest mobile carrier, “leaving Apple unable to effectively tap into a significant smartphone customer base. Consequently, we believe Apple will be limited to achieve it growth potential in the region throughout 2013.”
Informa’s Castonguay also sees challenges ahead for Apple in China.
“The growing competitive pressures Apple is facing in the smartphone market means that the average revenue per iPhone will come under increasing scrutiny as the company expands its business in China and other growth markets where demand for lower-priced models is expected to outstrip iPhone 5 sales,” he wrote.
Apple CEO Cook had a different view of the company’s potential in China. Addressing a question about iPhone demands in the country, Cook said that growth there was even higher than in the United States.
“So,” he added, “I would characterize it as we are extremely pleased.”