Apple IS just an iPhone company (and that’s OK!)
Blockbuster earnings? Check. Launch of a revolutionary method of paying? Check. It’s been a pretty good week so far for Apple (AAPL), and it’s only Tuesday.
Apple sales surged in its fourth-quarter, exceeding most Wall Street expectations. The company reported a nearly 13 percent boost in profits, thanks to strong sales of iPhones and Macs, and the company’s guidance for the holiday sales is very bullish.
Apple now gets 70% of its profits from the iPhone. Analysts are concerned Apple is becoming a one-product company. If competition increases from the likes of Samsung, the company could be at risk. But Yahoo Finance Tech Reporter Aaron Pressman says that shouldn’t be a concern. “Being an iPhone company is a great thing,” he says. “It looks for the foreseeable future that there is plenty of growth left in the iPhone.”
Pressman also points to some of the products Apple has in its pipeline, like the much-hyped Apple Watch. He says, though, “It’s unclear whether the watch can move the needle or not.”
What isn’t selling at Apple is the iPad. According to Pressman, “the idea that it would be a great new category and would really boost the company into the stratosphere was the hope, but that seems to be faded.” iPad sales were down for the third straight quarter, dropping more than 7 percent from the previous quarter.
iPad sales are suffering because of increased competition in the tablet market but also in part because loyal Apple consumers are choosing between the larger screen iPhones and the Mac lines. Pressman says that’s “a great thing for Apple,” because it has a higher margin on the iPhone 6 Plus and MacBook Air than on the iPad. “It’s making a lot more revenue and profit on those than it makes on a little $329 iPad.”
As for Apple Pay, which launched yesterday, Pressman has used it and likes it and calls it “a very quick and easy way to pay.” He doesn’t know if it will catch on though.
“I’m not sure whether there is enough pull – just from it being cool and a little bit quicker for consumers – for it to really catch on. But it was really easy.”
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