Apple Outs The Truth: Growth Is Slowing——-Everywhere
by Jeffrey P. Snider
DavidStockmansContraCorner.com
April 28, 2016
he big news of the day had nothing to do with Janet Yellen, which was entirely appropriate given both her stance on the economy and anything she could possibly, realistically do about it (nothing). Apple reported results that were shocking in many ways, though not necessarily unexpectedly so. Last quarter, CEO Tim Cook had warned that the business had shifted. On a conference call with analysts in January he declared, “The challenging global macroeconomic environment is leading to constrained conditions unlike anything we’ve seen, everywhere we look.”
In that quarter, Q4 2015 (fiscal Q1 2016), Apple did manage to beat its record revenue, so the 13% drop in revenue in this next quarter only further suggests the “macroeconomic environment is leading to constrained conditions.” And unlike Janet Yellen, Apple isn’t ready to forecast that to change soon, though, as always, they see the longer term remaining ever so bright. The revenue forecast for Q2 (Apple’s fiscal Q3) was equally dismal, with expectations of just $41 to $43 billion vs. the $47.4 billion level that analysts had already downgraded to.
In trying to explain its worst quarter since 2001, Cook again turned to the economy:
Chief executive Tim Cook partially blamed ‘strong macroeconomic headwinds’ including the strong US dollar for the decline in sales, which was particularly severe in China.
On yesterday’s conference call, he specifically stated it as the reason for weakness in the smartphone business, where sales of Apple’s iPhone fell for the first time ever.
I think that the market as you know is currently not growing, however, my view of that is that’s an overhang of the macroeconomic environment, and we’re optimistic this too shall pass, and the market and particularly us will grow again.
The Rest…HERE
