“A Product Transition I Can’t Get Into”

Noted by Forbes’s Brian Caufield, a tantalizing statement from Apple CFO Peter Oppenheimer during the quarterly conference call, when he was asked why Apple’s guidance for the current quarter is just 65 cents per share, far under the 92 cents they just booked in the past quarter and the 82 cents analysts pulled out of their butts:

Oppenheimer gave three reasons for the shift, two prosaic, and one very tantalizing. Apple’s back-to-school product promotions will cost the company. Prices are rising for key parts, such as the flash memory that powers the iPhone and many of Apple’s music players. Finally, Oppenheimer said, there will be a “product transition I can’t get into.”

If it’s going to affect earnings, that seems to imply not just something new announced by the end of September, but something available for sale during the quarter. Curious.

Update: Here’s how I’m interpreting this. I think what he’s saying is that Apple is going to replace an older product which currently has high margins with a new product that, at least at first, will have significantly lower margins. Imagine, say, new iPods that sell at the same prices as current models but which cost more to produce. Or maybe it means they’re going to switch to the subscription-based accounting for more products?

Thursday, 26 July 2007