Apple profits seen buoyed by iPad 2 success
Despite dwindling sales of the now "old" iPhone 4, Apple is set to report a 69% rise in profits this quarter. How, you ask? The iPad of course, along with supplemental sales from Mac computers.
According to Bloomberg News, Apple's profits are estimated at $5.5 billion in the third quarter ending June 25th. The rise in profits can be partly attributed to the 7.7 million units of tablets sold last quarter, up from 7.3 million from the previous quarter during the holiday spending spree.
“All I had to do is walk past the Apple store on my way to work each morning and there were lines down the street
for at least a month after the iPad 2 launch,” said Charlie Wolf, an analyst at Needham & Co.
Sales of the iPhone are slowing as customers anxiously await the newest model of the handset, the iPhone 5, rumored to be launching in the fall - which is rumored to boast upgrades like a faster processor chip and an 8 megapixel camera.
"This quarter may end up being fairly mild for the iPhone," Wolf said.
As consumers await the iPhone 5, Bloomberg analysts predict that iPhone sales could drop as much as 8.3 percent to 17.1 million from the prior quarter.
Despite the slowed sales of the iPhone in the last quarter, a recent surveyed released by ChangeWave cited that up to 46% of consumers are planning to buy an iPhone in the next three months.
According to a ComScore report, up to 76.8 million people in the U.S. own a smartphone, a number which is rising. "The iPhone is likely to capture a significant percentage of feature phone users who migrate to smartphones,” Wolf said. “That is where the iPhone share should rise."
Mark Moskowitz of JPMorgan Chase & Co. predicts that Apple may sell as many as 19.6 million iPhone handsets with the launch of its iPhone 5.
“The return of the wow factor and new product cycles should jettison the fear that had been dogging valuation the last couple of months,” Moskowitz said.