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Apple’s Feeling Europe’s Economic Crisis: ‘Essentially Flat’ Sales and a ‘Slowdown’ in Business, Says Cook

In: Business and Management

Submitted By darkness301
Words 641
Pages 3
Apple often gets a lot of love in Europe, but in the last quarter that wasn’t enough to help it against the tide of economic woe hitting the region. In today’s Q3 earnings call, CEO Tim Cook described sales in the region as “essentially flat to slightly positive” — and, not unlike the wider macro-economy, “that really hampered our total results.”

Specifically, he noted that France, Greece and Italy were “particularly poor”, and Germany saw “only single digital positive growth.” Interestingly, the UK seemed immune to this situation and posted a “solid” 13 percent growth rate.

Overall, though, the performance of more mature markets in the region had a negative impact on the whole deal. “Western European countries drive the revenue [in the region] so we are certainly seeing a slowdown in business,” he admitted.

The results put Europe Q3 Mac sales at 941,000, on total revenues of $8.237 billion. That was down 10 percent on units and six percent on revenues sequentially. Year-on-year that was growth of only two percent on unit sales, and 16 percent on revenues. What that means is that while Europe remained the second-highest region, after the U.S., in terms of revenues, it showed the lowest growth of any region — not a good state of affairs for such an important market for Apple.

That’s in particular contrast to Greater China, which didn’t perform as well as in Q2 but still posted nearly 50 percent growth, with $5.7 billion in sales.

Apart from the economic situation in Europe — which is softening consumer demand for all products, not just fancy iPhone and iPad devices — Apple faces another challenge (unsurprisingly, not mentioned on the call): Android devices, some of which sell at significantly lower price points than iPhones.

Kantar Worldpanel ComTech, the market research firm owned by WPP, tracks 12-week smartphone buying patterns, and in their last…...

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