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Apple seen to post sales decline before iPhone launch

Posted: 26 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Apple? iPhone? LTE?

Apple has forecasted a drop in sales as consumers delay on buying the iPhone in advance of a new model expected to come out this October. The phenomenon is not new or unexpected but the question is how much Apple's iPhone sales will fall off in advance of the forthcoming model.

"No longer is Apple the company that beats every time," Tim Lesko, portfolio manager at Granite Investment Advisors stated. "I expect Apple to beat Apple's guidance, but I don't know whether they will beat Wall Street's guidance."

"People are waiting," Pacific Crest Securities analyst Andy Hargreaves said. "It's going to be bad now, but great later."

Analysts have been predicted a slowdown since May. In a research note in late May,�Sterne Agee analyst Shaw said Apple was already preparing its suppliers to transition to production of the next-generation iPhone. Wu wrote that he picked up from supplier checks that Apple's production plans for current iPhones have been "reduced significantly." He wrote that production is down 20 to 25 percent from the 35.1 million units Apple sold in the March quarter. "This means potential shipments of 26-28 million, which is below consensus closer to 30-31 million."

During the company's fiscal Q2 earnings conference call, Apple CEO Tim Cook explained that the company's iPhone 4S enjoyed a "huge January" during the company's Q2, largely due to the gadget going on sale in locations including China. The company was able to meet much of that demand, Cook said, which means the company now expects slowing iPhones sales in the coming months.

The next iPhone is likely to have a thinner and larger screen than its predecessors, according to recent reports. The gadget will also likely include LTE connectivity for the first time.

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