Apple® today announced financial results for its fiscal 2013 third quarter ended June 29, 2013. The Company posted quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion, or $9.32 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 42.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarter’s revenue.

The Company sold 31.2 million iPhones, a record for the June quarter, compared to 26 million in the year-ago quarter. Apple also sold 14.6 million iPads during the quarter, compared to 17 million in the year-ago quarter. The Company sold 3.8 million Macs, compared to 4 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on August 15, 2013, to shareholders of record as of the close of business on August 12, 2013.

Apple is providing the following guidance for its fiscal 2013 fourth quarter:

• revenue between $34 billion and $37 billion
• gross margin between 36 percent and 37 percent
• operating expenses between $3.9 billion and $3.95 billion
• other income/(expense) of $200 million
• tax rate of 26.5%

Apple is clearly positioning the upcoming iPhone 5c as its next smartphone for the masses. The colored, plastic device is the first thing you see when visiting Apple.com or the company's iPhone page. But just days ahead of launch, Apple is today breaking a trend; it's not providing any indication of how well iPhone 5c pre-orders are going.

For three years running, Apple has been quick to boast about early consumer interest in the iPhone 4, iPhone 4S, and iPhone 5. It started small. In 2010, Apple announced that the iPhone 4 had seen 600,000 pre-orders in 24 hours — the most the company had ever received in a single day. Things only grew from there. The iPhone 4S surpassed one million pre-orders in 24 hours, with the iPhone 5 doubling that success one year ago. Last year, Apple's update came on the Monday after pre-orders began, but the company's PR team has been mum today. And Wall Street may have noticed the silence.

FOR THE FIRST TIME IN RECENT MEMORY, APPLE ISN'T BOASTING ABOUT PRE-ORDERS

Today Apple shares fell again, with AllThingsD's John Paczowski attributing the decline to a lack of hard pre-order numbers and decreased subsidies at China Telecom. It's impossible to gauge iPhone fever by looking at Apple's pre-order page for the iPhone 5c: every single model of the device remains available for a 9/20 delivery date, contrasting with years past where availability was quickly pushed back within a day or two. But since the iPhone 5c is essentially an iPhone 5 in a colored plastic shell, Apple may simply have a strong handle on components and supply this time around.

The same can't be said for the iPhone 5s. Apple's "forward thinking" flagship phone was not made available for pre-order after last week's event. Instead, consumers will need to line up at the company's retail stores or purchase a device online beginning Friday. But why? The decision all but guarantees lines outside Apple Stores nationwide, and Apple may be anticipating supply constraints thanks to the A7 chip and Touch ID sensor built into the iPhone 5s. Daring Fireball's John Gruber says he expects the 5c will be available in "greater numbers" than its higher-end counterpart — at least at launch. We've reached out to Apple for comment on this story.

If you are hoping to get an iPhone 5s on Friday, be prepared to have to work for it.

Sources at multiple U.S. carriers said that the inventory of the new phone is significantly less than expected.

“We will have grotesquely unavailable inventory,” was how one carrier source put it.
A source at a second carrier also complained of extremely disappointing shipments from Apple, but said that demand for the high-end iPhone may also be slightly less than initially thought, too. Apparently it is the colors of the iPhone 5c that seem to have captured more customer’s eye.

The iPhone 5s and 5c are both slated to go on sale Friday at AT&T, Sprint, T-Mobile and Verizon Wireless. Apple only took preorders for the iPhone 5c, and carriers said supply there appears to be significantly better.

An Apple representative declined to comment.

Boy Genius Report said earlier Tuesday that supply for the iPhone 5s was expected to be “severely constrained.”

And, of course, those colors are creating added headaches for retailers and carriers that are trying to predict which colors will be most popular in which locations.

Network operators in the UK are reporting weaker than expected demand for the colourful iPhone 5C, the lower-priced model Apple investors hoped would be a mass market hit. Pre-orders are just one tenth of those seen in previous iPhone launches, according to one operator, who blamed the tepid advance sales on the unexpectedly high price. The 5C costs from £469 without a contract, just £80 less than the new premium 5S.

"It's been a big disappointment," said a mobile network source. "We are seeing a decline in the number of pre-orders. They are 60% to 70% less than we were expecting, and we didn't expect them to be massively high given it's not the flagship model."

For those who already own an iPhone, the fingerprint scanner and improved camera may make the 5S a more obvious choice despite its higher price tag.

UK networks have taken between 75,000 and 100,000 advance orders in previous years for new Apple phones, but say this year's level of interest is far lower. "This is one tenth of those numbers," said the source.

The difference may be due to Apple's decision to release only the 5C, and not the 5S, for pre-order. Advance sales opened on 13 September, and buyers will get their hands on the phone when both models arrive in store on Friday.

"Pre-orders have not been what we expect them to be by a long stretch," said a source at a second operator. "It was a big surprise that there were only pre-orders on the 5C. Apple have deliberately done it because investors will be looking at whether they can be successful in the mid-range market. The 5C is the device that will move their business from the premium market to a company that sells something for everyone."

The 5C, which comes in a range of five colours and has a shiny plastic back case rather than the usual metal iPhone finish, is being sold by all four network owners – EE, Vodafone, O2 and Three – and retailers including Carphone Warehouse and Phones 4u.

Last year, Apple secured a record 2m pre-orders for the iPhone 5 worldwide within 24 hours of the handset coming to market, more than double the initial 1m requests for the 4S. This year, the company has declined to release early data on sales.

"The 5C is not setting the world on fire in terms of pre-orders," said a source at a third operator. "It is dramatically lower. People are waiting and seeing, because Apple has never released two devices simultaneously."

Nonetheless, Citibank analyst Glen Yeung estimates advance sales reached 2.2m during the initial 24 hours. He predicts Apple will beat its previous record because China, including Hong Kong, will for the first time be among the nine initial countries to receive the new handsets. The distribution deal with Japan's largest wireless carrier, NTT Docomo, should also lift sales.

But Yeung cautioned: "We are not enthusiastic about the prospects for the new iPhones based on disappointing innovation and high price."

The retailer Phones 4u, however, reported "phenomenal" interest from its customers. The firm did not disclose how many phones it had sold in advance, but said the level of pre-registration, where customers put their name on the waiting list without paying upfront, was higher by double-digit percentage points than last year.

"If the price of the 5C was lower, pre-orders would be much higher," said Francisco Jerónimo, an analyst at IDC. But he still expects the cheaper phone to be Apple's best seller this year. "I believe the 5C will be larger than for the 5S. They can address new users who like colourful handsets, and also the current iPhone users. If people upgrade they don't want a device that looks exactly the same as their previous one."

Apple did not respond to Guardian requests for a comment.

Just as analysts are arguing that the new iPhones needs to be cheaper than ever to attract customers in China, carrier China Telecom Corp.CHA -0.28% cut back on subsidies.


Associated Press
The carrier is taking pre-orders for the new iPhone 5C and iPhone 5S and on its website provided a chart for users interested in what kind of data plan they have to buy to get a subsidized phone. Though the carrier will offer plans that reduce the extravagant cost of the handset for would-be customers, the company is forcing users to pay more upfront for the iPhone 5S than it did for the iPhone 5 last year.

For instance, if users buy a two-year data plan for 289 yuan per month ($47 per month), they have to pay 2398 yuan ($389.6) for the iPhone 5S. That compares with a charge of 1888 yuan for the iPhone 5 if a user committed to a similar plan last year. Without a plan the new iPhone 5S costs 5,288 yuan.

The large amount a customer is forced to initially spend to get the iphone highlights the difference between carrier subsidies in China with other markets like the U.S. It also shows why the high price points in China make it so difficult for AppleAAPL +2.21% to compete. While subsidies for Apple’s iPhone from U.S. carriers make it comparable to other top-end phones like Samsung’s Galaxy S4, in China it usually remains more expensive than those phones.

Though some analysts argue that China Mobile will spend big on subsidies for the newest iPhones, making them more affordable for lower income customers, China Telecom’s move shows that the carrier already believes it does not need to rely on the iPhone to attract customers.

Mizuho Securities analyst Marvin Lo said the cutback comes in part because China Telecom is trying to increase its profitability by keeping a tighter grip on subsidies.

“China Telecom had already cut the handset subsidies for the iPhone 5 compared to the iPhone 4S when it launched devices.” said Mr. Lo. “Regarding the same 2-year contract with a monthly fee of 289 yuan, China Telecom’s handset subsidies for the iPhone 4S accounted for 47% of the total contract value,but it has dropped to 39% for the iPhone 5 and 31% for iPhone 5S.”

China Telecom declined to comment on the comparison of the handset subsidies for iPhones, but it said in a statement that “generally the higher monthly iPhone 5S/5C tariff plan or a longer contract period a subscriber chooses, the higher handset subsidy the subscriber could enjoy.”