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Why future projections for Apple are gloomy even after 38 per cent rise in profits

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San Francisco:  Apple announced on Tuesday its profits rose 38 percent in the second quarter due to a surge in iPhone sales.

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However, Apple’s Chief Executive Tim Cook expressed concerns over the rising competition. “The gap is widening between us and our competitors,” Tim Cook said in an interview with the newspaper, the Wall Street Journal.

Headquartered in Cupertino, California, the company earned $10.7 billion during this period, its fiscal third quarter, compared to $7.74 billion in the same quarter of 2014, equivalent to earnings of $1.85 per share, reported EFE.

It sold 47.4 million iPhones in the second quarter, 35 percent more than the same period last year and more than double from four years ago. iPhone sales in China too, more than doubled to $13.2 billion.

In total, iPhone sales contributed $31.4 billion, a 59 percent rise over last year, owing to an average $100 increase in their prices.

Apple Watch concerns?

The company did not share information on the sales of the Apple Watch, which they recently began to sell, although Cook said it exceeded internal expectations.

The gross margin of the company’s profit was 39.7 percent, as opposed to the expected 38.5 percent to 39.5 percent.

Apple shares, however, fell 6.7 percent in after-hours trading at Wall Street, owing to what analysts called gloomy projections for coming months.

The company forecast revenue of $49 billion for the third quarter ending in September, against analysts’ expectations of $51.13 billion.

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Apple To Launch iPhone XR To Get Sales: Analyst

The affordable iPhone XR has a 6.1-inch LCD screen with liquid Retina display.

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Apple's cheaper iPhone XR to generate more revenue: Analyst Flickr Commons

Apple is likely to sell its new and cheaper iPhone XR faster than the luxury iPhone XS and XS Max, an Apple analyst has claimed.

According to Ming-Chi Kuo, an analyst with TF International Securities who often accurately predicts Apple’s future device plans, more people would upgrade to the iPhone XR this year.

iPhone XR would go on sale in India from October 19 and would be in stores on October 26, starting at Rs 76,900 for the 64GB storage variant.

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Phil Schiller, Apple’s senior vice president of worldwide marketing, speaks about the new Apple iPhone XS, iPhone XS Max and the iPhone XR at the Steve Jobs Theater during an event to announce new Apple products, Sept. 12, 2018, in Cupertino, Calif. (VOA)

According to a MacRumor report on Monday, Kuo said that Apple is now expected to ship 36 to 38 million iPhone XR units in the fourth quarter of 2018, up 10 per cent from an original estimate of 33 to 35 million units.

In a note to investors, Kuo also said Apple would continue to offer 5.8 and 6.5-inch OLED iPhones in 2019, along with one 6.1-inch LCD model.

Kuo has also revised his estimate for total iPhone shipments to 78 million to 83 million units from his earlier 75 to 80 million.

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A demonstration of the newly released Apple products is seen following the product launch event at the Steve Jobs Theater in Cupertino, California, U.S. Sept. 12, 2018. (VOA)e

Apple sold 77.3 million iPhones in the same period in 2017.

Also Read: Honor 8x Launches In India

“We believe that replacement demand for XR will be better than it was for the iPhone 8 series last year because of XR’s larger display, longer battery life, dual-SIM support, and new form factor design,” Kuo said in the note to investors.

The affordable iPhone XR has a 6.1-inch LCD screen with liquid Retina display and aluminium body instead of a steel one. (IANS)

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