Fourteen analysts have predicted that Apple’s quarterly profits, due to be reported later tonight, may have fallen for the first time since 2003, according to estimates compiled by Bloomberg.
When published tonight, Apple's Financial Report: “May show that fiscal second-quarter net income declined 19 per cent to $9.53 billion, or $10.02 a share.” As well as this, Bloomberg cites that: “Revenue is projected to show a rise of eight per cent to $42.4 billion, the slowest growth rate since 2009.”
Competition from Samsung is said to be playing an important role in this, with Ben Reitzes of Barclays Capital going as far as to suggest that: “Samsung’s momentum is a major issue for Apple. We need to see Apple expand its iPhone market this year in a big way- and improve its platform.”
The news comes as Samsung prepares itself for the release of the Galaxy S4 smartphone this week - boasting a five-inch touch screen, it remains Apple’s stiffest rival.
However, market researcher Strategy Analytics recently published a report claiming that Apple accounted for 42.7% of global smartphone revenues in the fourth quarter of 2012, while Samsung accounted for only 28.7%.
There have been some suggestions that Apple is losing ground due to the high price of the iPhone, however, research conducted by Piper Jaffray undermines this, highlighting that half of US teens own an iPhone. The survey indicated that 48% of the teen respondents owned an iPhone, which is up 40% from last years’ findings.
However, with Apple’s ex-CEO John Sculley claiming that company is experiencing a “Lull in motivation,” the pressure continues to rise for Tim Cook to introduce new, innovative products to rekindle Apple sales.
Sculley believes that Apple needs to focus its attention on emerging markets in China and India, which is one area where Samsung is excelling at the moment.
After paying his second visit to China in 10 months, it’s clear that Tim Cook is definitely aware of the need to address the growing market in China. As well as this, Apple has recently announced plans to build a further 25 Apple stores in the country, to add to the already existing 11 stores in mainland China and one store in Hong Kong.
Apple has also introduced a 2-year payment plan for customers in China, allowing payments to be split into three, six, 12, 18 or 24 installments.
RBC Capital Markets analyst, Amit Daryanani, expects that Apple will finalise a deal with China Mobile in early 2013, which will allow Apple to enter a partnership with a carrier that has over 700 million customers.