Apple Forecast Shortfall Shows Cost of Year-End Product Rush
This article is for subscribers only.
Apple Inc. traded industry-leading margins for a revamped product line in time for the holiday shopping season, a sign of the rising costs of rivalry with Samsung Electronics Co., Microsoft Corp. and Amazon.com Inc.
The trade-off was outlined yesterday when Apple said profit in the current quarter will be about $11.75 a share on sales of $52 billion. That compares with $15.49 a share on sales of $55.1 billion predicted by analysts surveyed by Bloomberg. Gross profit margin, the proportion of sales left after deducting production costs, will fall to about 36 percent, the lowest level in more than four years, Apple said.