Apple Will Enjoy Upcoming Holiday Season, But Will Struggle With Shrinking Profit Margins !

Must Read

New RBI Guidelines Force You To Memorise All Of Your Card Details

It's time to get your brain prepped to do some much-needed homework and commit to memory the...

Bounce Layoff: Bike Rental Startup To Pivot Into New Vertical

Bike-rental startup Bounce has laid off a massive chunk of its workforce in a bid to survive...

Zomato Beefs Up Valuation Prior To IPO In Its Latest Fundraising Round!

Before heading to the stock market with an IPO, the homegrown food delivery startup Zomato beefs up...

It’s beyond the shadow of doubts that Apple is now one of the world’s most profitable technology companies, but it’s difficult to say whether the company could sustain its profit margin in forthcoming years or not. It’s expected that Apple has reached to its peak of profits. Actually, an increase in the cost of goods involved in the iPhone 5, up from $353 to $370 in the quarter ending December 2012, is also a major concern. The components encompassed in iPhone 5 such as LTE chips and and high resolution display screen have compelled the gross margin for the device down to 38.8%, from 40%. An analyst from Pacific Crest–Andy Hargreaves—has estimated that the quarterly earnings per share (EPS) of the company will drop to $14.76 in the quarter ending December 2012 , from $15.28 in the same quarter of the last year.

Holiday Season: Apple Sales To Surge Up Enormously

Anyway, it was the prediction for the Apple’s profit that declined due to drop in iPhone 5’s profit margin. Despite, Apple could still see an opportunity in the quarter ending December 2012 due to increasing demand of iPad Mini and fourth generation iPad; According to a recent survey report, conducted by the mobile video and Media Company “Vuclip” over 20,435 U.S. consumers, 57% respondents are likely to purchase a Tablet by Christmas. More importantly, nearly 30% of users are willing to purchase iPad, while 22% and 3% users plan to buy Samsung and Amazon’s Tablet respectively by the end of Christmas holiday. It’s good to listen that 30% of users are likely to own Apple’s iPad, but Samsung has reached beneath to it in terms of Tablet’s demand.

However, there are still some sorts of factors such as brand, cellular connectivity (3G/4G/WiMax), operating system, price, app availability, battery life and screen size that determine the purchase of Tablets. It’s clear from the survey report that 26% of consumers in the U.S. are likely to purchase Tablets on the basis of brand, while 19%, 12% and 10% of users decide to buy due to connectivity, OS and price respectively. However, it would not be as silly as goose to say that Apple’s iPhone 5 and iPad Mini would be among one of the most preferred holiday gifts this year.


Another internet research company—ComScore—has reported that smartphone penetration in five European countries including France, Germany, Italy, Spain and UK is now 53.7%; nearly 130 million people in these countries used smartphones at the end of Q3 2012. Interestingly, out of these users, 15.5% have a tablet, up from 9.3% in the same period of the last year. However, such impressive numbers didn’t show any respect to world’s best brands as Apple had to deal with unpleasant scenario when its third generation iPad was scrutinized by the U.K regulators for advertising false promises this year.

The main hurdle for Apple’s 4G compatible devices is that most of European countries (including France, Spain and Italy) offer 4G LTE services on the 2.6 GHz or 800 MHz bands, but Apple’s iPad 3, iPad Mini and iPhone 5 run on different band. On the contrary, Samsung has continuously been growing up its market share in these countries due to its 4G LTE compatible devices.

In other words, Samsung has succeeded to swallow Apple’s smartphone and tablet market share since last couple of years, and now, it’s tough for Apple to retain profit margin on its products.


Please enter your comment!
Please enter your name here

Latest News

Reliance Aims To Launch Its Own Version Of UPI-Like Payments Network With Google And Facebook!

The mammoth tech-petroleum conglomerate Reliance aims to create its own version of UPI! According...

TikTok Coughs Up $92 Million In Fine For Harvesting User Data Of Minors!

The popular short-form video app TikTok simply can’t catch a break! Besides dealing with its botched acquisition now stuck in limbo, the...

Facebook Continues Taking A Jab At Apple With New Marketing Campaign

Even after a month of attacking and accusing Tim Cook Zuckerberg is still very much fizzle out from Apple’s major blow to...

Xiaomi Levels Up On India Manufacturing: 99% Smartphones Are Made In India

Xiaomi really is digging its heels to live up to a commitment. One of the first adopters of the...

After SMS, WhatsApp Now Becomes A Threat To Cell Calling: 1 Billion And Counting

It already buried the SMSes in the ground. Now, traditional cellular calling is next on the hit list. The number of WhatsApp...

Flipkart Quickly Learns From the Mistake Amazon Did: Setting Up A Level Playing Field For Sellers!

Unlike Amazon which allegedly implemented unethical strategies to tackles India’s FDI policy for e-commerce marketplaces, Flipkart plans to do it right!

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This