Apple polishes forecast after selling 9m new iPhones
Updated: 2013-09-24 10:12
Alejandro de Rosa (R) and Melisa Racineti of Buenos Aires, Argentina pose with their new Apple iPhone 5s phones with Apple employee Jay at the Apple Retail Store on Fifth Avenue in Manhattan, New York. [Photo / Agencies]
Apple Inc sold 9 million new iPhones during their first three days in stores after China joined the list of launch countries for the first time, prompting the company to issue a rosier financial forecast.
Shares in the company closed up 5 percent at $490.64 on Monday after the company said revenue in the fiscal fourth quarter would gravitate towards the high end of its previous forecast for $34 billion to $37 billion.
Apple, which began selling the top-tier iPhone 5s and cheaper, multi-hued iPhone 5c on Friday, rarely adjusts its outlook in the middle of a quarter. Since CEO Tim Cook took the reins, however, the world's largest tech company has begun to court Wall Street more visibly.
The record sales and beefed-up forecast reinforced expectations of strong demand for Apple's latest gadgets. Phones based on Google Inc's Android software and made by the likes of Samsung Electronics have steadily eroded its market share, as customers flocked to lower prices and larger phone sizes proved popular.
Critics had also said the iPhone 5c was priced too high to take advantage of pent-up demand in emerging markets.
"The critics have told you Apple lost its magic," said Daniel Ernst, an analyst with Hudson Square Research. "Customers are telling you something very different. Clearly, people like the product. That sentiment is almost more important than the number."
Sales of the new models were nearly double those of the iPhone 5's 5 million in the first weekend after its launch a year ago, and far surpassed the roughly 6 million that analysts had projected.
But forecasts for Apple's latest iPhone had proven trickier than in the past, because the company introduced two models simultaneously in 11 countries -- including the crucial Chinese market. Apple launched the iPhone 5 in just nine countries.
Another factor was that this time around, Apple signed on NTT DoCoMo, Japan's largest mobile carrier.
China joined a rollout that included Hong Kong, Singapore, the United States, Australia, Japan, Britain, Canada, Germany, France and Puerto Rico. Previously, Apple began selling phones in China only months after the global launch.
"We underscore one important caveat for investors: Apple's iPhone seasonality is likely to be exaggerated this cycle because of the addition of NTT DoCoMo, and particularly because of the early launch in China," said Bernstein Research's Toni Sacconaghi, who has an "outperform" rating on Apple.
"Although upside exists for the September and December quarters, the risk exists that the fall-off in iPhone sales beginning in the March quarter could be more acute than history, potentially resulting in some downside to estimates."