[downandout]

Let's remember that everyone was anticipating the iPhone 5s for all but 10 days of the third quarter, which naturally slowed iPhone 5 sales. Then Apple almost instantly ran into supply constraints after its release. Because of these two factors, these results aren't that meaningful. 4th quarter results will give a far more meaningful picture of iOS's place in the current market.

[Kylekramer]

Aren't those pretty much the exact same conditions as last year's quarter? iPhone 5 release: September 21, 2012. iPhone 5s/5c: September 20, 2013. And both had supply issues at launch. It seems fair to compare the quarters and draw some tentative conclusions.

[ChuckMcM]

However Apple's product release schedule being as rigorous as it is tends to make quarters more comparable. Perhaps a better indication here is the drop from 40% gross margins to 37% gross margins. That comes right out of the business.

Generally lower revenues but same margins is a sign so constraints in the supply chain. Higher revenue but lower profits is a sign of margin erosion. Lower revenue and lower profits and lower margins is perhaps one of the most alarming situation.

It is good to push back on folks who thought he tablet was just a fad? You know the ones who said "There isn't a 'tablet' market so much as their is an 'iPad' market." Well those folks have been shown to be mistaken.

I don't own any Apple stock (well I might in my blind 401k but I wouldn't know if I did :-) I've been tempted to pick some up after it dropped from the 700's into the 400's. But the thing that I keep wondering about is their ability to execute in a contested market by a competent opponent. This coming quarter will be an interesting one for everyone I expect.

[downandout]

IMO, supply constraints mattered....and this quarter is different because Apple threw a lower margin iPhone into the mix: the 5c. These have been consistently available, while the 5s has not. That means that for all but a couple of days during the quarter, all they had to sell was the lower margin 5c, while revenue from the higher margin 5s was waiting in the wings and won't be seen until next quarter.

[ChuckMcM]

That is certainly a fair point, we can come back to this discussion in 3 months :-)

[gonzo]

Chuck,

If you really think that Apple will drop like that, you should short it.

[ChuckMcM]

I wouldn't short a stock for a single down quarter.

[jljljl]

This argument would explain slower sales or lower revenues, but I'm not sure this has much validity in explaining the lower net profit or gross profit margins.

Lower gross profit margins are probably better explained by either downward pressure on prices or upward pressures on costs of manufacture. It can also be driven by changes in product mix (e.g., higher sales of the lower margin iPad Mini). It's not unreasonable to attribute this to greater competition from lower margin Android products.

[tlrobinson]

I'm curious what portion of Apple's customers actually anticipate new versions of products and hold off on purchasing until they're released.

I imagine it's common among the Hacker News segment, but what about the average person?

[mitchty]

My buddy has held off on a retina macbook pro waiting for the new one.

And I know some others that do similar, not because they need to but to see what the new version offers.

[tannerc]

Same here. I waited a few months to see what was going to be announced in regards to MBP, wasn't disappointed (though I wasn't really surprised either).

I imagine the waiting pool is larger than the "act now" pool. Especially since we now have resources like MacRumors buyer's guide.