Ina Fried

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Apple: Inventory Levels Were a Big Factor in Company’s Lower Sales and Outlook

While Apple disappointed some Wall Street analysts with both its earnings report and forecast, a portion of the lower numbers was due to shifts in inventory rather than a slowdown in sales.

With the iPhone, for example, Apple was still boosting inventory levels in the March quarter, with that quarter’s sales benefitting from 2.6 million units added to the channel of products yet to be sold. By contrast, the June quarter’s results saw more iPhones sold to customers than were sold into Apple’s distribution channels.

A similar shift with iPad inventories in the current quarter could dent next quarter’s sales, Apple CEO Tim Cook noted on today’s conference call with investors. The company added in a significant number of tablets this quarter after being supply-constrained in the prior quarter.

Of course, there is also an impact from a weak European economy as well as the fact that Apple didn’t have a new iPhone to sell and lots of customers are expected to hold off until there is one.

“I think there is a lot of speculation out there,” Cook said. “I’m fairly convinced based on what I’ve seen that there is incredible anticipation out there for future products.”

Apple executives carefully avoided giving any details on those new products, beyond reiterating that iOS 6 would come sometime this fall. But, the company did express its usual optimism.

“We could not be more confident in our new product pipeline,” CFO Peter Oppenheimer said.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work