Apple Earning Call: Are Apple Expectations Too High?

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On Competition:

“Here’s what makes this part puzzling: Apple’s iPhone actually took market share from Android on Verizon in the holiday quarter, which suggests it’s doing just fine against Samsung.”

On Growth:

“Apple’s data released Wednesday showed iPhone units were up 29 percent over last year, and revenues were up 28 percent. Factoring in last week’s long quarter, sales were up closer to 40 percent. iPad sales? Similar story. Units are up 48 percent year over year, sales up 22 percent, before you factor in the short quarter.”

On Margins:

“What about declining margins? Aren’t those a sign that Apple’s facing pricing pressure?”

“Not exactly. The average selling price of an iPhone this year: $641. A year ago: $646. The difference is less than 1 percent, and can probably be explained by Verizon’s new ability to offer the iPhone 4 for free, subsidized. Apple said iPhone 4 supplies were constrained.”

Do you agree with this assessment? Are expectations too high for Apple Inc. (NASDAQ:AAPL)?

Check back here for more updates on Apple Earning Call.

DISCLOSURE: I have no positions in any stock mentioned.

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