Tuesday February 19, 2019
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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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Samsung Competes Apple, Launches Stores and Expand Retail Footprints in US

On February 20, Samsung is also hosting its "Unpacked" event in San Francisco, where it will announce its first foldable smartphone and "Galaxy S10".

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Samsung's retail presence in the US was marked only by pop-up stores and dedicated spaces in franchisees like Best Buy. Pixabay

Keeping in line with the prevailing competition with Apple, Samsung is planning to inaugurate three full-scale stores in Los Angeles, New York and Houston on February 20, aiming to expand its retail footprint in the US, Apple Insider reported.

Samsung intends to allow users to try and buy its products ranging from smartphones to Virtual Reality (VR) glasses and televisions via these retail stores.

Much like Apple Stores, the South Korean giant plans on providing in-person customer support along with walk-in repairs available for mobile devices.

Apple, Samsung
Apple has long touted its retail stores as one of its key advantages, since people can try products in advance and have a place to turn if they need help with setup or troubleshooting. Pixabay

Up until now, Samsung’s retail presence in the US was marked only by pop-up stores and dedicated spaces in franchisees like Best Buy. This move comes at a time when Apple is coping with declining iPhone sales, driven mostly by tough competition in China from local smartphone makers.

“Apple has long touted its retail stores as one of its key advantages, since people can try products in advance and have a place to turn if they need help with setup or troubleshooting. It remains to be seen whether Samsung would be able to cultivate an equal or superior level of support and whether or not will enough people choose to shop at outlets instead of online or at the many third-party vendors that carry Samsung gears,” the report said.

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Due to low traffic and poor response, the company failed in its attempts at retail expansion in the UK and withdrew quickly.

On February 20, Samsung is also hosting its “Unpacked” event in San Francisco, where it will announce its first foldable smartphone and “Galaxy S10”, the report noted. (IANS)