According to an article published today in the Wall Street Journal,Apple reported a third consecutive quarter of declining profits, but showed signs that both prices and profit margins are stabilizing despite heightened competition for its iPhone and iPad.
The average selling price of an iPhone declined 6.6% from a year earlier, but less than 1% from the preceding quarter.
The average selling price of an iPhone declined 6.6% from a year earlier, but less than 1% from the preceding quarter.
Revenue from the iPhone rose 17% from a year earlier and represented more than half of Apple's quarterly total of $37.5 billion, which was up 4.2% from a year earlier. Apple released two new iPhones near the end of the quarter instead of one as in past years.
Those sales couldn't stem a third consecutive slide in profit from a year ago for the Cupertino, Calif., company. Profit fell nearly 9% to $7.5 billion.
But Apple offered investors encouragement by saying it expects its closely watched gross margin to stabilize. The company said its gross margin for the coming holiday quarter should be about flat with the 37% reported in the two previous quarters.
For the current quarter, Apple said it expects its best-ever revenue of $55 billion to $58 billion, slightly higher than analysts had been projecting and as much as 6% over a year ago.
The stable profit-margin projection is a sign that the company is better managing its cost structure, in light of numerous new product releases, including new versions of the iPhone and iPad.
A flat profit margin also would be an improvement over last year, when Apple introduced new products at roughly the same time. In 2012, gross margin in the December quarter fell to 38.6%, from 40% in the September quarter.
