Apple reports record quarter, stocks plummet

Sales of Macs down 18 per cent, iPad sales up nearly 50 per cent, iPhone sales up 30 per cent.

Apple's released its quarterly earnings yesterday, and they weren't great. Although, in Apple's case, "not great" still means that revenue grew 18 per cent year on year to $54.5bn, profits hovered at $13.1bn, and its financial year 2012 is the largest corporate earnings year in history. Twitter loves to talk about first-world problems — this is "biggest-company problems" of the highest order.

Sales of Macs were down 18 per cent, but iPad sales had grown by nearly 50 per cent, and iPhone sales by almost 30 per cent. The iPhone 5 was the best-selling smartphone worldwide, and the astronomical mark-up on it — it generates a 55 per cent profit margin for the company — means that it will be jealously guarding that market for some time.

Still, the narrative is that Apple's had a bad quarter (because they really ought to own a small country by now, and their failure not to do so is frankly embarrassing), and so in after-hours trading, stocks were down 10 per cent.

The diagnosis seems to be that a hefty chunk of the decoupling of revenue and growth was down to the much-reduced profit margins of the iPad Mini. Apple's profit from sales of the 7 inch iPad is much lower than it gets from sales of the full-size one (although that hasn't stopped people arguing that it's making a mistake to charge so much for it, or not to put a vastly expensive retina display on it), so to the extent that its growth is because of entering that new market, its profit share will fall.

Worse for the company is that there is some evidence the mini is cannibalising sales of the full-size iPad. Certainly, respected bloggers like Marco Arment and John Gruber report preferring their minis to their old iPads, and they would seem to be the target market for the full-power device.

But if its problems stem from a growing presence in low-margin markets, then it's rather odd that the proposed solutions are… growing their presence in low-margin markets. Apple regularly comes under pressure for their low and declining share of the smartphone market — currently at around 20 per cent — with the implication that its strategy of chasing profit over raw sales is wrong. Reports that the company is attempting to build a low-price iPhone which would debut in late 2013 suggest that the company is taking the recommendation to heart.

But it seems that if it does bring out a successful low-margin entry level device, it will be slammed for declining profit; if it doesn't, it will be slammed for declining market share. Meanwhile, whatever the company does, it will be raking money in hand-over-fist. Maybe the problem lies with the people doing the slamming?

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The 8 bits of good news about integration buried in the Casey Review

It's not all Trojan Horses.

The government-commissioned Casey Review on integration tackles serious subjects, from honour crimes to discrimination and hate crime.

It outlines how deprivation, discrimination, segregated schools and unenlightened traditions can drag certain British-Pakistani and Bangladeshi communities into isolation. 

It shines a light on nepotistic local politics, which only entrench religious and gender segregation. It also charts the hurdles faced by ethnic minorities from school, to university and the workplace. There is no doubt it makes uncomfortable reading. 

But at a time when the negative consequences of immigration are dominating headlines, it’s easy to miss some of the more optimistic trends the Casey Report uncovered:

1. You can always have more friends

For all the talk of segregation, 82 per cent of us socialise at least once a month with people from a different ethnic and religious background, according to the Citizenship Survey 2010-11.

More than half of first generation migrants had friends of a different ethnicity. As for their children, nearly three quarters were friends with people from other ethnic backgrounds. Younger people with higher levels of education and better wages are most likely to have close inter-ethnic friendships. 

Brits from Black African and Mixed ethnic backgrounds are the most sociable it seems, as they are most likely to have friends from outside their neighbourhood. White British and Irish ethnic groups, on the other hand, are least likely to have ethnically-mixed social networks. 

Moving away from home seemed to be a key factor in diversifying your friendship group –18 to 34s were the most ethnically integrated age group. 

2. Integrated schools help

The Casey Review tells the story of how schools can distort a community’s view of the world, such as the mostly Asian high school where pupils thought 90 per cent of Brits were Asian (the actual figure is 7 per cent), and the Trojan Horse affair, where hardline Muslims were accused of dominating the curriculum of a state school (the exact facts have never come to light). 

But on the other hand, schools that are integrated, can change a whole community’s perspective. A study in Oldham found that when two schools were merged to create a more balanced pupil population between White Brits and British Asians, the level of anxiety both groups felt diminished. 

3. And kids are doing better at school

The Casey Report notes: “In recent years there has been a general improvement in educational attainment in schools, with a narrowing in the gap between White pupils and pupils from Pakistani, Bangladeshi and African/Caribbean/Black ethnic backgrounds.”

A number of ethnic minority groups, including pupils of Chinese, Indian, Irish and Bangladeshi ethnicity, outperformed White British pupils (but not White Gypsy and Roma pupils, who had the lowest attainment levels of all). 

4. Most people feel part of a community

Despite the talk of a divided society, in 2015-16, 89 per cent of people thought their community was cohesive, according to the Community Life Survey, and agreed their local area is a place where people from different backgrounds get on well together. This feeling of cohesiveness is actually higher than in 2003, at the height of New Labour multiculturalism, when the figure stood at 80 per cent. 

5. Muslims are sticklers for the law

Much of the Casey Report dealt with the divisions between British Muslims and other communities, on matters of culture, religious extremism and equality. It also looked at the Islamophobia and discrimination Muslims face in the UK. 

However, while the cultural and ideological clashes may be real, a ComRes/BBC poll in 2015 found that 95 per cent of British Muslims felt loyal to Britain and 93 per cent believed Muslims in Britain should always obey British laws. 

6. Employment prospects are improving

The Casey Review rightly notes the discrimination faced by jobseekers, such as study which found CVs with white-sounding names had a better rate of reply. Brits from Black, Pakistani or Bangladeshi backgrounds are more likely to be unemployed than Whites. 

However, the employment gap between ethnic minorities and White Brits has narrowed over the last decade, from 15.6 per cent in 2004 to 12.8 per cent in 2015. 

In October 2015, public and private sector employers responsible for employing 1.8m people signed a pledge to operate recruitment on a “name blind” basis. 

7. Pretty much everyone understand this

According to the 2011 census, 91.6 per cent of adults in England and Wales had English as their main language. And 98.2 per cent of them could speak English. 

Since 2008-2009, most non-European migrants coming to the UK have to meet English requirements as part of the immigration process. 

8. Oh, and there’s a British Muslim Mayor ready to tackle integration head on

The Casey Review criticised British Asian community leaders in northern towns for preventing proper discussion of equality and in some cases preventing women from launching rival bids for a council seat.

But it also quoted Sadiq Khan, the Mayor of London, and a British Muslim. Khan criticised religious families that force children to adopt a certain lifestyle, and he concluded:

"There is no other city in the world where I would want to raise my daughters than London.

"They have rights, they have protection, the right to wear what they like, think what they like, to meet who they like, to study what they like, more than they would in any other country.”

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.