Investors are running scared at Apple's conservative second-quarter targets, questioning why guidance is so low after the company's best-ever quarter.
Apple revealed its financial results for Q1 2008 last night, confirming a $1.58bn profit on $9.6bn in revenue. But investors were spooked by Apple chief financial officer Peter Oppenheimer's prediction that: "Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8bn."
With the background of a cooling US economy, interest rate reductions and fears of recession, investors want their money to be where the money is, stock fell $3.91 to $157.45 on yesterday's trade – and pre-market conditions seem no better, where a total of $17.74 has been sliced off of Apple's stock price.
"Investors are so trained right now to be fearful of the future," Piper Jaffray analyst Gene Munster told the LA Times. "Investors are worried something is going to slow down the high-end consumer."
Investors also appear concerned that the growth in sales of Apple's iPod range is beginning to slow, though the company tried to offer some reassurance when it noted the iPod touch to be the future of the platform, as a WiFi-enabled entertainment device.
Where iPod blows, iPhone follows. Apple executives confirmed their continued confidence that ten million of its mobile phones will be sold by the end of the year, causing analyst Shiomi Cohen to note: "Anyone not holding Apple shares would be well advised to seize the opportunity if indeed the stock continues to head south, since in the longer term Apple will become number one in the smart handset market."
Cohen believes iPhone will also expand into enterprise markets, and anticipates a 16GB model of the device will appear as and when third-party applications begin to ship.