‘A Few Cracks to Worry About’ in Apple: Gillis
Published: Thursday, 25 Oct 2012 | 5:21 PM ET
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By: Bruno J. Navarro
Producer
Producer
 |
Following its quarterly earnings
miss, Apple
[AAPL 604.00 --- UNCH (0)
]
shares face a variety of new pressures, Colin Gillis of BGC said Thursday on
CNBC.
]
shares face a variety of new pressures, Colin Gillis of BGC said Thursday on
CNBC.
On “Fast Money,” he said that
the company’s forecast was a bit lower than expected, putting it into
perspective. “The September quarter, that’s the refresh quarter, right, so a
miss is not a surprise,” he said. “Apple has disappointed in the last three out
of five quarters.”
Looking ahead, Gillis pointed out
challenges facing the company.
“The stock is not expensive, but
there are a few cracks to worry about. We got margin pressure. We have the
possibility of a vacuum in the product refresh in the next six months. The
overall smartphone marketplace is slowing,” he said. “And then the company still
has competition in the low end that it’s choosing not to serve.”
Competition was becoming
formidable, he added.
“You see
Amazon
[AMZN 238.24 --- UNCH (0)
]
getting a decent amount of traction with Kindle, and you see
Google
[GOOG 675.15 --- UNCH (0)
]
chasing into the market, as well,” he said.
]
getting a decent amount of traction with Kindle, and you see
Google
[GOOG 675.15 --- UNCH (0)
]
chasing into the market, as well,” he said.
Gillis also wondered what would
happen to iPhone 5 sales if telecom carriers stopped subsidizing them.
“Apple’s very good about staying
true to its niche, which is a high-end marketplace,” he said. “We’ve always said
that they may have trouble getting scale and retaining those margins.”
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