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What to expect from Apple's Q2 results today

John Cox | April 24, 2013
Speculation is rife that when Apple announces its fiscal second quarter results today at 5 pm EDT, its revenue, profits, gross margin, and earnings per share or some combination of them will be less than expected, or less than they should be, or both.

Several of them, interviewed for a Computerworld story, predict a late June or early July debut for the next iPhone, usually dubbed "iPhone 5S." The current iPhone 5 was announced in September 2012 and the previous iPhone 4S in September 2011.

But as Computerworld's Greg Keizer noted, Apple has yet to release the review of its software development kit for its next operating system version, iOS 7. The preview SDK typically gives app developers about three to four months to work with the new OS version, reading new apps and tweaking existing ones before the new iPhone is released.

In a recent online discussion among a group of experienced Apple watchers, John Gruber of Daring Fireball and Rene Ritchie, editor-in-chief of iMore, several participants said they had heard from sources that iOS 7 was "behind schedule," and that Apple software engineers had been shifted from the Mac operating system, OS X, to work on the mobile platform.

Given this very typical Apple response - being able to shift resources quickly to apply them where needed (more on this below) - a project can be "behind schedule" without ultimately being late. It's analogous to a driving to a destination, to arrive at a given time: if you're forced to drive slower than planned on one stretch, you can drive faster on another to make up the difference, or skip a stop for lunch.

Interest in iOS 7 is keen for several reasons. Competition from Android-based smartphone makers is intensifying and their visual user interfaces are becoming more sophisticated and user-oriented. Last fall, long-time iOS development chief Scott Forstall was edged out in the wake of the badly-received initial release of Apple Maps. The core OS was handed to OS X development honcho Craig Federighi, while long-time industrial design guru Jonathan Ive took over the platform's user interface and user experience design. Finally, iOS is essential to and intimately wedded with Apple's expanding cloud services for mobile products and users.

The wild speculation that Apple is beleaguered, floundering, on the verge of defeat, is a result of a lack of historical awareness and of misunderstanding Apple's essential character, argues Horace Dediu, an independent analyst and founder of market analysis firm Asymco, in a recent interview for Korea's Chosun Daily.

Asked about the current "Apple shock," Dediu explains that "during Steve Jobs' time the company suffered many such shocks."

"The stock fell many times far further than it just did for trivial and irrational reasons....Share prices are not always good indicators of potential and markets are not always efficient."

Many observers, including Wall Street analysts, writing about Apple today are new to covering the company, he says. "I would guess 80% of the observers have not observed Apple's prior painful episodes first hand," Dediu says. "For them this is the first time a "dominant" Apple has slowed. The amplification of so many voices raising alarm makes it seem truer, but it isn't.


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