Apple's profits fall for first time in a decade: has it lost its bite?

Company no longer 'king of the heap' as profits go from 'WTF to OMG' with no new products coming

LAST UPDATED AT 13:39 ON Wed 24 Apr 2013

CRITICS are suggesting tech giant Apple may have lost its bite after the company reported its first quarterly drop in profits in a decade.

Yesterday's bad financial news piled pressure on the once unassailable company after it lost its status as the world' biggest company to Exxon Mobil last week and can be seen as part of the a "steady descent", according to the Daily Telegraph's Katherine Rushton. "Apple is not king of the heap any longer," she writes. Some commentators are even comparing Apple to other former stock market "darlings" such as Yahoo.

Gary Marshall of Tech Radar takes a different view. "Previously Apple's profit margins were WTF. Now, they're just OMG", he says of the company's $9.5bn profit in the first quarter of 2013 (down from $11.6bn the previous year). What we're seeing, Marshall writes, is "the end of the wave". "The profit margins are down because Apple's doing exactly what analysts clamoured for: it's making more affordable products such as iPad minis, and it's keeping older iPhones on sale at lower prices", he adds.

Although the results exceeded shareholder expectations, Apple has questions to answer over product development, the BBC's Rory Cellan-Jones reports. After announcing the results, the company's chief executive Tim Cook "made it clear that the next few months will be a lean period, with teams working hard to introduce new products 'this fall [Autumn] and throughout 2014.'"

Analysts say the Californian company must develop new products to stay ahead of competitors such as Samsung. "The market is tired of the same old thing at Apple,'' said Lauren Balter, of Oracle Investment Research. "Investors are looking for innovation."

The Guardian's technology editor Charles Arthur says that "for those who have watched Apple for any length of time, and remember when it barely had two iPods to rub together, such a hiatus between product releases seems incredible".

For now, Arthur writes, the jury is out. "It's still too soon to say whether Cook can generate the hits as his predecessor did. But this waiting sure is enervating. Couldn't we at least have an iWatch?" · 

For further concise, balanced comment and analysis on the week's news, try The Week magazine. Subscribe today and get 6 issues completely free.