James Middleton

January 22, 2009

2 Min Read
Apple shipments fall during holiday period

Californian kit vendor Apple is the latest vendor to see handset sales hit by the credit crunch. On Wednesday the company announced that it shifted 4.3 million iPhone 3Gs in the fourth quarter of 2008, up 88 per cent year on year but down from 6.9 million in the previous quarter.

Apple is the latest handset vendor to fall foul of a painful trend, which has seen handset shipments in the historically lucrative three month run-up to Christmas, plummet as the credit crunch takes hold.

The Californian firm joins troubled vendor Motorola, which posted a 25 per cent sequential decline down to 19 million units, while Sony Ericsson’s shipments slipped to 24.2 million, down from 25.7 million.

Apple began selling the iPhone 3G, the second generation device, in July 2008, significantly expanding its distribution through carrier relationships in over 70 countries. To date, Apple has sold about 11.2 million units of its 3G gadget.

How much money it made from those sales is a little harder to determine however. Because of the “subscription based” model Apple uses to report revenues from the iPhone, due to the fact that it provides frequent software updates for the handset, the company spreads the revenue fro the device over the products lifecycle, which is estimated to be 24 months.

As a result, deferred revenue for the iPhone and Apple TV to the end of December 2008 reached $4.6bn, compared to $3.5bn in the previous quarter.

Earlier this week it was revealed that the US Securities and Exchange Commission (SEC) is conducting a review of Apple’s disclosures over the health of CEO Steve Jobs. The spotlight has been on Jobs’ health since he was diagnosed with pancreatic cancer a few years ago and more recently when a disclosure about a hormone imbalance suddenly flipped to a more complicated matter, which will see Jobs take six months sick leave.

Apple is unusual in the tech world in that the company is more closely tied to the health of its CEO that at any other firm. Rampant speculation on Jobs’ health over the past year have seen Apple’s share price take a battering on more than one occasion. And the company’s decision to make this year’s Macworld Expo its last, as well as Jobs’ decision not to do the keynote, has only thrown fuel on the fire.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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