Apple reported record revenue and EPS numbers in Q1 2014, but lower iPhone sales led to a drop of 8 % in afterhours trading.
Quarterly revenue was at $ 57.6 billion, and net profit of $ 13.1 billion, which translates to $ 14.50 per share. It also sold 51 million iPhone units, which was an increase of 6.7 % year on year, but was lower than expectations. Sell-side estimates (from sell-side analysts, who work with individual vs institutional investors) were at 54.7 million units, and the whisper number (unofficial forecasts) was at 56 to 57 million units.
Even as Nintendo and Sony cite competition from Apple products for their lower earnings, Apple itself is struggling to meet up to expectations. Of course, the company has become a victim of their past successes, and is simply unable to match its performance at its peak.
Whatever Apple’s financial standing is now or in the near future, the challenge its iOS platform (on iPod touch, iPhone and iPad devices) to traditional gaming consoles, as well as similar challenges from Android, will continue to threaten the continued viability of game consoles.
If anything, the news is an alarm to developers, that none of the platform makers they work with are bulletproof. On the flip side of this, the much maligned Wii U and Playstation Mobile have both proven they can be spaces indies can be profitable in, even thrive.
One small note: Apple CEO Tim Cook was asked about the company making new products in new categories. It’s a common point that critics say Apple could find blue ocean to grow further in. Cook affirmed that they are, stating that the world is filled with overly complex products Apple can improve. Could these new products include gaming consoles? Analysts always hold out hope that Apple will do this, but the company has always been skittish about the issue. We will need tangible proof that Apple is interested, but at this point, they may be open to anything.
