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iPhone 4S Release Begins Cook

 

            The iPhone 4S fell way short of expectations, a sign that many believe marks the fall of Apple Inc. following Steve Jobs' death while others blame the early reveal for the disappointment. Chief Executive Tim Cook's first posted quarterly earnings caused shares to fall seven percent and Apple's value to decrease by $27 billion. With the recent falling numbers, Google Inc. is quickly making gains on Apple, who also faces competition from Samsung and Amazon.com Inc. Analysts forecasted sales at 20 million, but actual sales only reached over 17 million (Gupta).
             "Investors are going to start to speculate that there is change under way now that Jobs is gone, and that there's trouble ahead. We don't share that point," said Channing Smith, co-manager at Capital Advisors Growth fund, an Apple shareholder, who believes that these numbers do not hint at the company's downfall. "The iPhone is where the weakness was and it's an explainable one. The strong demand for the iPhone 4S set up strong demand for the holiday season" (Gupta). .
             Net profit also fell short by $7.34 a share as analysts projected it at $7.39 a share. Apple has not missed an estimate for over a decade. "Expectations for this company were red-hot that is why we downgraded it. The reality is their business is not an annuity. They have to sell their quarter's worth of revenue every 90 days," said Colin Gillis, BGC Partners analyst, who lowered his ratings before the phone was released. "They had a big upgrade cycle with the iPhone, the numbers came in weak. They need to set records every time they report to keep up the momentum" (Gupta). .
             Apple believes that the iPhone 4S's less-than-desired reviews stem mostly from the fact that buyer's are waiting for the holiday season to buy. Furthermore, rumors of the iPhone 5 release date projected for later this year convinced many buyers to wait (Gupta). .
             "We expected iPhone sales to decline in the September quarter from the June quarter as a result of the announcements we made .


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