Apple underwhelmed analysts' predictions with their fourth quarter earnings, sending the company's stock tumbling, but some numbers suggest that the iPhone rumor mill is at least partly to blame. As speculation turned to anticipation for an all-new iPhone 5, sales numbers for the device took an uncharacteristic downward turn. Apple reports having sold 17.07 million iPhones in the quarter that ended in September, which according to Apple's fiscal calendar is its fourth. That was 16 percent less than the 20.34 million they sold in the third quarter. The reversal comes after a solid year of growth. For instance, in the second quarter, Apple sold 18.65 million iPhones which was 9 percent more than they sold in the first quarter.
Apple CFO Peter Oppenheimer admitted on the earnings call Tuesday afternoon: the rumors hurt the company's bottom line. "We expected iPhone sales to declined sequentially as a result of new product rumors following the announcement in July that iOS5 and iCloud would become available in the fall," said Oppenheimer. "As predicted, sales did decline, especially in the second half when new product speculation intensified."
Apple's stock is tanking on Wednesday because its fourth quarter revenue came in at $28.3 billion, which was short of the $29.4 billion that analysts had expected. And now bloggers are wringing their hands over the company's future, doing their best to explain how the company will survive this bad news. Of course, these are the same bloggers that eagerly posted "awesome" computer renderings of the iPhone 5, speculated over the best accessories and linked to iPhone 5 reviews before the iPhone 5 didn't even exist. Which it still doesn't.
But for anyone who was contemplating buying an iPhone 4 over the summer, the impending arrival of a totally revamped iPhone 5 -- and not just a nice improvement of the the iPhone 4 -- was a good reason to hold off the purchase until September. That was exactly the advice tech writers were handing out over the summer. The avalanche of customers for the iPhone 4S over its first weekend on sale surely included the people who had been taking their advice. It's worth noting that the last downturn came after Gizmodo published details of the iPhone 4 before Apple officially unveiled it, though in reverse. In that instance, the new phone was real.
Some back of the envelope math lets us put some numbers to this speculation. Apple missed revenue expectations by a little over $1 billion. According to Apple's earnings release [PDF], the per unit revenue generated by iPhones in the quarter was $643, which means that had iPhone sales stayed flat, their revenues would have been $2.1 billion higher, pushing them well over Wall Street expectations. With their stock down nearly 5 percent in Wednesday morning trading, that missing revenue has lopped off more than $17 billion of market cap.