Apple set to announce first profits dip in 10 years after chip sale slowdown

 

Apple is expected to reveal its first profit slide in a decade when it releases its latest figures today.

The technology giant is widely forecast to announce a decline in earnings amid reports of a slowdown in sales of its iPhone and suggestions that the company has lost crucial ground to rivals such as Samsung.

Just last week Apple lost its position as the world's most valuable publicly traded company when its shares hit their lowest levels in a year-and-a-half.

This came after one of the firm's suppliers - Cirrus Logic which provides sound components for the iPhone and iPad - said sales of a particular chip were slowing down.

Industry observers expect today's report to show a dip in profits of up to about 20 per cent, compared with the same period last year.

The result would mark the first time Apple has suffered a fall in earnings since 2003 when it opened its iTunes Store.

The company has enjoyed huge success during the past decade but suffered a bruising winter after its rocket-like growth stalled.

This led to speculation that demand for its flagship phones was shrinking and accusations that Apple was running out of ideas.

The firm was dealt a further blow in January when figures for the Christmas period showed earnings of 13.1 billion US dollars (then £8.2 billion) remained flat compared to the year before - the first time in years that the technology giant had not boasted double-digit increases in earnings.

More recently, Apple has faced pressure from investors calling for new hit products, and mounting competition from Samsung which unveiled its latest Galaxy S4 handset to much fanfare in New York last month.

But analysts suggested a slide in profits would not necessarily spell bad news for Apple.

Stuart Miles, founder of technology and gadget site Pocket-lint, said today's results were likely to reflect the fact that there were no major Apple launches during the most recent quarter.

"Apple is in a quiet period before the next bang when they unveil a new product," he said.

"They are keeping their heads down and letting the products speak for themselves.

"Apple has also had a lot more competition. You might find people aren't buying the iPhone 5 because they are waiting for (Samsung's latest offering) the SGS4.

"If iPhone sales have dropped, that is probably the reason."

Apple's next iPhone was initially expected to be unveiled in June but rumours suggest its release may not take place until September.

Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said Apple had "fallen foul" of some Wall Street investors.

"Its ability to innovate and shock has been brought into question, whilst the company is under pressure to deploy some of its massive cash pile," he said.

"However, with the new versions of the iPhone and iPad yet to come, and with the rumoured Apple TV and iWatch in the pipeline, it would be a brave call to continue to bet against Apple.

"Despite the pressure, the market consensus is still a strong buy."

PA

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate