Apple Recap: Margins, a Price War, and Samsung’s Competition

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

Split AppleOn Wednesday, shares of Apple (NASDAQ:AAPL) took a hard hit. Cirrus Logic (NASDAQ:CRUS), which is widely believed to make analog and audio chips for the iPhone and iPad, announced a weaker-than-expected forecast. Investors took that to mean Apple was expecting much lower shipments of its two iconic devices in the coming months, ostensibly stemming from slacking consumer demand. Shares dipped below the psychologically important level of $400 per share and hit a new 52-week low.

With lower-than-expected iPhone sales announced by the wireless carrier Verizon (NYSE:VZ) on Thursday — 55.6 percent of all activated phones were Apple devices as compared to 63.3 percent in the previous quarter — investors continued the sell off. The stock hit new 52-week low of 389.74, and shares closed down $10.75, or 2.67 percent, at $392.05. Here’s a cheat sheet to today’s top Apple stories:

Apple’s Sales are Nothing Special, But Look at Those Profit Margins!

As Microsoft (NASDAQ:MSFT) struggles with shrinking sales of Windows PCs, Apple is holding onto a large share of the industry’s profits, despite selling only a small fraction of the world’s PCs, according to data published by Asymco. In fact, Apple sells just 5 percent of the world’s PCs, but makes 45 percent of the industry’s profits. With low sales, Apple is being propped up by high margins, which most PC vendors just don’t have.

Is Apple now a once-in-a-decade buying opportunity? Click here to get your 24-page Ultimate Cheat Sheet to Apple’s Stock now!

“The real problem for the PC vendors is not that they have such low margins — they’ve had low margins for decades. It’s that the volumes which “made up for” low margins are disappearing,” said analyst Horace Dediu… (Read more.)

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business