Apple warns of holiday earnings drop
Apple has a new iPhone, two new iPads and three new PCs as it heads into the holiday quarter, the biggest selling season of the year. But, paradoxically, it expects these new gadgets to bring down its profits compared to last year. The reason: the new gadgets are expensive to make, Apple executives said Thursday, and the company is not interested in cutting corners for the sake of short-term returns.
On top of the holiday-quarter warning, the company reported earnings for its just-ended quarter that missed Wall Street's expectations for the second quarter in a row – something that hasn't happened in more than a decade.
In part, the issues facing Apple are a normal consequence of having so many new products, said Chief Financial Officer Peter Oppenheimer. When a production line is new, it costs more to run and the components are more expensive.
“The difference this time is the sheer number of products we're introducing at a short time,'' Oppenheimer told analysts on a call Thursday.
But Oppenheimer also singled out the iPad Mini, the new, smaller version of the iPad the company unveiled Tuesday. It starts at $329, well above the $199 competitors charge for similar products. Apple's price is ``aggressive,'' with a margin well below its other products, Oppenheimer said.
``When we set out to build the iPad Mini, we didn't set out to build a small, cheap tablet, we set out to build a smaller iPad that offered the full
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