Apple (AAPL): A Hard Ride Ahead

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By Douglas A. McIntyre Published
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All the news from Apple (AAPL) is good. Recent Gartner and IDC data show the Mac outselling PC products from Dell (DELL) and HP (HPQ). The iPhone sold one million units in its first three days on the market.

One of the tough issues for Apple is how much it makes on all of those impressive sales. According to Fortune, "Shaw Wu, the top Apple analyst at American Technology Research, is focused on the company’s gross margins, which came in surprisingly low last quarter for reasons that were never adequately explained."

Apple has agreed to stop taking a cut from the cellular subscription fees that it iPhone carrier partners get after they sell the handset. That is bound to make the overall profits on the product something less than impressive.

Apple may have hit the point where it is trading profitability for market share. Pushing the Mac and iPhone harder and harder against entrenched competition has to get harder and harder as the Apple’s market share grows.

Apple’s competition is not going to simply roll over and die.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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