Despite Low Sales, iPhone SE Demand is Strong

Posted by Kirhat | Tuesday, May 03, 2016 | | 0 comments »

iPhone SE
Despite the declining iPhone sales, Apple is confident that they have found a gem with iPhone SE.

In March, Apple released the smaller, 4-inch-screen phone featuring much of the company's latest technology. Although sales of the phone were not captured in the second quarter, the device is off to a strong start, particularly in emerging markets, Apple Chief Financial Officer Luca Maestri told Reuters.

"The situation right now around the world is that we are supply-constrained," he said. "The demand has been very, very strong."

Although Apple's revenue in Greater China fell 26 percent from the year-ago quarter, Maestri stressed that the company was "extremely optimistic" about China. "We continue to make a lot of investment there," he said.

Chief Executive Tim Cook said that mainland China sales were down only 7 percent in constant currency, attributing much of the Greater China drop to Hong Kong, where strength in the local dollar, which is pegged to U.S. currency, deterred tourist shopping.

The company did not comment on prospects for its iBooks Stores and iTunes Movie service, which were shut down a few days ago in China.

Apple forecast third-quarter revenue of US$ 41 billion to US$ 43 billion, short of the Wall Street consensus of US$ 47.3 billion.

Apple also said it was raising its capital return program by US$ 50 billion through a US$ 35 billion increase in its share buyback authorization and a 10 percent rise in the quarterly dividend.

The drop in after-hours shares wipes out roughly US$ 46 billion in market capitalization, roughly the value of heavy equipment maker Caterpillar Inc .

In reaction to Apple's results, shares of its suppliers Skyworks Solutions , Qorvo, Broadcom and NXP Semiconductors all fell 2 percent or more last 26 April.

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