Apple Reports Q4 Revenues of $37.5bn

Apple has reported revenues of $37.5bn (£23.3bn) for Q4, 2013, up six per cent quarter-on-quarter and four per cent year-on-year.

Meanwhile, net profits stood at $7.5bn, down nine per cent year-on-year, and 16 per cent quarter-on-quarter.

These figures are certainly nothing to sniff at, but given that the company sold 33.8m iPhones during the quarter – a record for this period, and up 25 per cent year-on-year – its worth considering why the companys growth has slowed.

In its guidance for the next quarter, which encompasses the festive season, Apple predicts revenues of $55-58bn, compared to $54.5bn the previous year. Depending on which end of the spectrum the real results fall, it could have a remarkably flat Christmas period.

One contributing factor might be the lack of product launches: the iPhone 5S and 5C went on sale on 20 September, just over a week before the end of the period, and iPads were reaching the end of their current generation. 

But its also possible that the companys premium brand status, which has served it so well in the past, and refusal to significantly lower the price of its devices is actually proving to be a disadvantage in emerging markets.

Commenting on the results, Upstream marketing manager Vassilis Tziokas said:

“If Apple wants a larger slice of the smartphone pie, it will need to think long and hard about its current strategy. Holding onto its premium brand status has so far served the company well, particularly in the West, but now all eyes are on the emerging markets where smartphone use is set to grow at exponential levels. Can Apple really replicate its success in these new markets with its current approach?

While many had hoped the 5C would be Apple’s attempt make its products more accessible to the masses, Apple has been reluctant to dilute its premium price-tag. This failure to adapt its pricing strategy is something that could cost Apple dearly in the future and markets such as India, is where Apple stands to lose the most ground. 

According to Ovum, India’s smartphone penetration is set to leap from 14 per cent in 2013 to 66 per cent in 2017. However, given that the average annual income in India is approximately $1,219, users are likely to opt for brands that have made the cost and accessibility of their devices their chief consideration.”