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- Yahoo’s Search Revenue Is A “Disaster”
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- What People Care About When Buying A Smartphone
Apple is known for dramatically lowballing its guidance, and then miraculously blowing out 'expectations.'
Since Apple started giving guidance under its new accounting rules more than a year ago, it has topped its quarterly EPS guidance by an average 44%, and its revenue guidance by an average 17%.
So what does that mean for this quarter, which will be announced Wednesday afternoon? (Join us for LIVE coverage.)
Based on Apple's March quarter guidance of $4.90 EPS and $22 billion in sales, history suggests Apple should report EPS of about $7.06 on $25.7 billion of revenue.
One wild card could be the iPad, which didn't ship until later in the quarter and was constrained by supply. This could have resulted in unexpectedly low shipments during the period, as an Apple lawsuit against Samsung may have pre-announced.
Wall Street expects lower earnings and revenue: Consensus stands at $5.35 of EPS on $23.3 billion of sales. So, as always, Apple is set up to 'surprise.'
Yahoo's tanking search revenue (down 19%) ruined what would have been an otherwise strong earnings report last night.
Carol Bartz blamed sliding search revenue on Microsoft's adCenter not delivering high enough revenue per search -- her implication is that the ads aren't as relevant as they were under Yahoo's system, so users aren't clicking on them as much.
Danny Sullivan, one of the smartest journalists watching the search business, took a long look at Bartz's claim and Yahoo's search business, and he thinks Bartz is too quick the place the blame at Microsoft's feet.
He found that Yahoo's search business was declining before the Microsoft deal. It has continued that decline at a steady rate -- even if you subtract out the 12% that Yahoo pays Microsoft now that Bing is powering its search results.
Sullivan offers an alternate reason why revenue per search has continued to drop after the Microsoft deal: Bing offers better organic results than Yahoo did, so users are clicking on the actual search results and not relying as much on the ads.
Whatever the reason for the drop in Yahoo's search, Sullivan calls it a 'disaster,' and warns, 'The search revenues need to reverse themselves, and quickly, for Yahoo to be convincing that the deal it hawked is really paying off. Otherwise, when 2012 rolls around, and those headwinds have finally slacked off, Yahoo might find it has slowed down to earning Blekko money.'
Apple's iPhone has gone from zero to half of Apple's revenue in less than 4 years.
For the first time ever, iPhone revenue didn't shrink in the March quarter after the busy Christmas quarter before it. (Thanks in large part to launching at Verizon Wireless and SK Telecom during the quarter.)
But again, what's most remarkable is how fast Apple is still growing overall as a company. At $24.7 billion in sales last quarter, Apple grew 83% year-over-year. That's even faster than its 71% year-over-year growth during the Christmas quarter before it. Amazing.
Earlier this week we published the results of a reader survey that assessed what people look for when buying a smartphone.
Unsurprisingly, the most important thing was the 'platform'. In other words, is it running on Apple software, Google software, or something else?
In a bit of a surprise, however, the second most important thing is the feature set of the phone, not the apps it offers.
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