Apple sales slow ahead of iPhone release

As iPhone fans await the release of a new model, they are delaying purchases and may cause Apple, the world’s largest company by market value, to post its slowest sales and profit growth in more than two years.

With a redesigned model probably arriving by October, analysts estimate that sales of iPhones — Apple’s biggest source of revenue — slid in the fiscal third quarter from prior periods.

While analysts predict the next iPhone will be the best-selling smartphone yet, the purchasing delays will probably weigh down results until the device hits stores.

“People are waiting,” said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon.

Apple will sell about 25.4m iPhones, he estimates, compared with 35.1m in the previous quarter. “It’s going to be bad now, but great later.”

A similar slowdown occurred ahead of last year’s iPhone 4S release causing Apple’s shares to slide when the company reported profit that fell short of analysts’s estimates for the first time since 2003.

Apple has not said when it will unveil a new iPhone. Yet the dip in unit sales underscores how speculation about Apple’s plans, including a slew of websites dedicated to publishing rumours about new devices, can lead potential buyers to sit on their wallets while waiting for a new product.

“Customers are increasingly tech-savvy and they want to have the latest and greatest,” said Anthony Scarsella, chief gadget officer at Gazelle.com, a website that buys and sells used iPhones and other consumer electronics. He said people wind down trading in their iPhones about four to six months ahead of an iPhone release.

Today, Apple will probably report profit grew 35% to $9.86bn (€7.82bn), according to the average of analysts’ estimates compiled by Bloomberg. Sales are projected to rise 31% to $37.3bn.

While that kind of growth would outpace gains by most of Apple’s peers, it would be the company’s slowest since 2009.

Another potential barrier to near-term sales is a weak global economy that’s crimping consumer spending, as well as changes by carriers that extend how long a customer must wait to get a subsidy for a new device, said Pacific Crest’s Hargreaves.

Apple also is facing competition from rivals including Samsung, which according to NPD Group is the world’s biggest seller of smartphones. It released the Galaxy S III in May.