Before Apple reported its Q2 2013 earnings, many analysts were painting a doom and gloom scenario, due to sales of iPhones slowing down. Apple announced $9.5 billion in profits; $43.6 billion in revenue, with sales of 37.4 million iPhones and 19.5 million iPads. Apple beat analysts' expectations but it was the first time the company saw a decline in profits in over a decade.
Things are going to get worse before they get better, as Apple's CEO Tim Cook warned that Q2 results and outlook for the rest of the year "aren't what they used to be." Apple fans are going to be disappointed, since it appears the iPhone 5S, iPad 5, iPad mini 2 and low-cost iPhone will not be released until the fall. But to ease investors' concerns over whether Apple has lost its innovative ways, he confirmed the company would enter new markets, which could be the rumored iWatch and an Apple TV.
During the earnings call, Tim Cook acknowledged that Apple's revenue has slowed down and failed to meet everyone's expectations, but the company is very confident about several new product launches beginning in the fall of this year.
"Our teams are hard at work on some amazing new hardware, software and services we can't wait to introduce this fall and throughout 2014," Cook said.
The iPad 5, iPhone 5S, iPad mini 2 and low-cost iPhone were rumored to launch in the next few months, but it looks like consumers are going to have to wait until the fall to get their hands on new Apple hardware. Cook tried to soften the blow of his statements by telling investors that Apple has a very substantial roadmap of new products and reminded them:
"We continue to be very confident in our product places ... We've got a lot more surprises in store. This is the same culture that brought the iPhone and the iPad and we've got a lot more products in the works."
When an analyst asked if Apple would be entering new product categories Cook responded, "One of our potentials for growth will be in new product areas. I did not mention a specific time frame."
The CEO also responded to rumors that his company would enter the phablet market by saying, "My view continues to be that iPhone 5 has the absolute best display in the industry. Some customers value large screen size. Others value other factors such as resolution, color balance, brightness, portability, etc. Our competitors have made some significant tradeoffs in many of these areas. We would not ship a larger display iPhone while these tradeoffs exist."
Cook's response is typical Apple-speak; when Apple releases a product in a new market it will have fixed all of the tradeoffs that other companies couldn't.
It sounds like Apple is going to have a rough few months, but as Cook reminded investors, don't count Apple out. It is in fact the same company that revolutionized the world with products like the iPod, iPhone and iPad. The company has plans to do that again; and it most likely will. We'll just have to wait a little longer than expected.
