Apple: Aussie sales impacted by economy

Apple: Aussie sales impacted by economy

Summary: Apple has said that poor economic conditions in countries like Australia have impacted its results, but is Australia doing as badly as the company thinks?

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TOPICS: Apple, iOS, iPhone, iPad
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Apple CFO Peter Oppenheimer has said that economic factors in Australia and elsewhere affected its results for the third quarter, and that it doesn't expect this to change.

The company reported third-quarter earnings overnight of US$8.8 billion, or US$9.32 per share, on revenue of US$35 billion. Wall Street was expecting earnings of US$10.37 per share on revenue of US$37.2 billion.

Apple sold 26 million iPhones in its Q3, compared to the 35.1 million it sold in the second quarter that ended in March — a 26 per cent drop. However, it was an increase on the 20.3 million iPhones sold in the June quarter last year, and the number met its own guidance on sales.

When asked, Oppenheimer opened up about what the company had found disappointing in the quarter.

"The economy in Europe is not doing well. We think this impacted our results. We also saw some economic impact in the natural resource-based economies, including Australia, Brazil and Canada," he said.

The US dollar also improved against various currencies, including the Australian dollar, he said, which reduced the company's revenue growth for the quarter.

Both of these effects are expected to continue into the next quarter, he said.

However, his comments come just after Reserve Bank of Australia (RBA) governor Glenn Stevens made an uplifting speech about how well the Australian economy is tracking in comparison to the rest of the world, displaying graphs that rank Australia's real GDP and real GDP per capita over that of the US, the UK and New Zealand. Australia also has a lower unemployment rate than those countries.

"It is fair to conclude that given the circumstances internationally, the Australian economy has exhibited more than acceptable performance over recent years. This conclusion would stand, whether comparisons were made either against most other countries or against our own historical experience," Stevens said.

Although the Chinese market, upon which Australia's resources success hangs heavily, has not been growing as fast as it was previously, it is far from contraction, he said.

Stevens said that even if there is a serious slump in China, the Australian dollar would probably fall, which would provide an expansionary impetus to the Australian economy. More importantly, the Chinese authorities would respond with stimulus measures.

Given Stevens' optimism, any of Apple's future disappointment in Australia may have more basis in other factors, such as the fact that people may have been holding off with iPhone purchases due to rumours of an upcoming iPhone release.

"Regarding the iPhone, we're reading the same rumours and speculation that you are about a new iPhone, and we think this has caused some pause in customers purchasing. The timing of availability of Intel's Ivy Bridge and resulting rumours about the new portables impacted our sales in April and May," Oppenheimer said of the quarter.

Competition may also be a factor. There has been vibrant competition in the segment from the likes of Samsung, which recently trumpeted reaching its 10 million sales target for the Galaxy S III.

AAP contributed to this article.

Topics: Apple, iOS, iPhone, iPad

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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15 comments
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  • People sick of Apple lawsuits.

    I know more and more people that are switching away from Apple because they don't like the way Apple are trying to stifle competition with lawsuits.
    colonel.mattyman
  • Lawsuits, Directly Or Indirectly

    Even if the lawsuits haven't directly put off customers, they have certainly been a major distraction for Apple. The company should have been concentrating on innovating instead of litigating, and it is now paying the price of its complacency.
    ldo17
    • Not this

      Oh Dear God, please don't tell me that someone has hired PR stooges to spam every thread on ZDNet with "Apple lawsuit" scripts.
      Robert Hahn
      • Its real not a PR thing

        You need to get out more often (asuming you are in Australia)
        Iif you remember Apple started this stupitity here in Australia back in Aug 2011, almost a full year now. It was not a good move on Apple's part and the prelimary injuction which was overturned after the Australian High court took a closer look at, is now having the actual final court case this week.
        A lot of Australians are talking about the way Apple is ruining its brand imageand are turned off by their worldwide litigation.
        So its not a PR thing to discredit Apple , they are doing it all by themselves.
        toviz@...
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  • Or maybe its just

    Market saturation ?
    Ken Oath
    • Healthy Competition

      In the Australian market, I'd suggest its healthy competition with other devices.
      We are switching to BYOD for our work phones, we did all have company provided iPhones. Now over half the company has replaced their iPhone for some kind of Android phone.

      All the law suits aside, I'm happy to see healthy competition between Android/Apple/WinMo, it ensures we are always seeing new features and services, and not having these products stagnating like Blackberry before the iPhone came out.
      Freaky Spook
      • ...Or the ACCC investigating "Healthy Competition"?

        Ever since the ACCC (Australian Consumer & Competition Commission) announced they were investigating the disparity between Overseas & Australian pricing, we've seen a change in the pricing model used by Apple. Mountain Lion is $1 more in Aus v USA (straight $ for $ conversion), versus previous OSes where the difference was much more. I had a few accessories to buy on the Apple website at the time the investigation was announced, & prices dropped on most of them - in one case from $89.99 to $49.99 - in line with OS pricing.

        I honestly believe this is the reason for the dip in performance seen by Apple, not consumer confidence.
        mattmuir
  • I wonder if its because android adoption has been slower in Aust

    In the US, Android sales outpaced iOS in about March 2010, here it wasn't until September 2011, around 18 months later. I think that was probably because iPhone launched on a multitude of carriers here, but was exclusive to AT&T for so long in the US, which gave the other US carriers much more incentive than here to push Android. What Apple have put down to dampened demand in a weak economy might simply be attributable to that historic time shift. iPhone got a boost in the US when it went multi-carrier that it had from day 1 here, making our sales graph climb dramatically at the start, but flatten off during the period the US was still sharply climbing.
    paulhknight
  • Here's Another Odd Thing...

    ... as usual, it seems, Tim Cook blamed the slowdown in sales on potential customers waiting for the next Iphone before buying.

    In times past, that may have held true for one quarter: punters could reasonably be expected to postpone a buying decision for up to 3 months.

    But now, it seems, he's trying to use this excuse for *two* whole quarters of slow sales. Are buyers really prepared to wait for up to 6 months?? Doesn't seem likely somehow...
    ldo17
    • I'd agree

      I don't think its a hold off thing either. Apple as a brand here in Australia proabably has reached its peak (market share wise) and unless they can being out 'new' products they will lose sales to the tide of more advanvced Android devices coming.
      I, like many Australians belive Apple's litigation has more to do with holding that tide back then any real true IP issues. - we don't like that way of doing bussiness and many will look at non-Apple devices to see why Apple is so hell bent on risking its reputation to stop us having them.
      toviz@...
  • Stuck in a corner

    Its just my own personal opinion, but I feel Apple is stuck in a rut with iOS, and the iPhone in general. Its a static UI, meaning there's little chance to develop over time, visually at least, and because they need to cater to 2, 3, or even 4 year old phones, thats putting it in a Nokia-like situation. Adapt of suffer. That doesnt even cover iPod touches and the like that operate off the same OS.

    Android and Windows OS's dont have that issue, and are slowly but surely reaping the rewards as a result.

    The iPhone is a certain size, and you're not going to see that change any time soon. If you like that size, great, but more and more people are prefering the mid-4" phones, with the larger displays they provide. Tack on the relatively dated visuals, and the combination is slowly becoming last decades toy.

    Unless your a solid Apple fan boy, if you pick up a Galaxy S 3 and an iPhone, its a simple choice to get the Samsung as a result.

    Disagree if you want, its just my opinion, but I simply think that what made the iPhone so successful (simplicity of use) is now hurting its sales. This comes from someone that has used an iPhone, and a Galaxy, and also have an iPod touch and a mac mini at home. I'm not an Apple hater.
    Gav70
  • Hilarious

    Apple you kill me! Australia came out of the GFC better than any other Western economy.

    According to the 2011 Credit Suisse Global Wealth report, Australia has the highest median wealth in the world and nearly four times the amount of each US adult.

    In 2011, Australian is the second wealthiest country in the world behind Switzerland on an average basis.

    Get a better excuse Apple.
    nowend
  • Hilarious

    Apple you kill me! Australia came out of the GFC better than any other Western economy.

    According to the 2011 Credit Suisse Global Wealth report, Australia has the highest median wealth in the world and nearly four times the amount of each US adult.

    In 2011, Australian is the second wealthiest country in the world behind Switzerland on an average basis.

    Get a better excuse Apple.
    nowend