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  • Apple Smashes Money Records Again!

    October 22nd, 2007

    When you examine Apple’s financials in even a cursory fashion, you have to consider that, not so long ago, it took almost a year for them to earn $6.22 billion of revenue. Now Apple can do this in a single quarter, and nobody can guess just where this might end up in the next few years.

    The basic numbers released Monday afternoon were extremely encouraging, and way more than Apple’s fiscal fourth-quarter guidance and, as usual, ahead of Wall Street estimates.

    In all, some 2,164,000 Macs were sold, of which 1,347,000 were laptops, and 817,000 desktops. The new iMac line, according to Apple, is getting great reception, and the company’s inventories are down to three weeks, which is, in the scheme of things. quite low. In all, Mac sales were up 34 percent over the same period last year.

    In the iPod world, 10.2 million units were sold, an increase of 17 percent over 2006. Meantime, how many of you actually remember that there’s a new Zune line coming out next month? No raised hands! I thought so.

    As far as the iPhone is concerned, total sales were 1,119,000, which greatly exceeds Apple’s original estimate of a million units by the end of the quarter, and you can bet the $200 price cut really sped sales to higher levels. And, lest we forget, that figure excludes the 270,000 during sold during the iPhone’s first weekend, which occurred in the previous quarter.

    For this quarter, Apple is expecting $9.2 billion, which should reflect the holiday season upturn for the iPod and the iPhone. Mac sales, though, aren’t expected to change much, since the back-to-school season is where they truly excel.

    When it comes to hard-core financials, Apple’s fourth quarter earnings were, as I said before, $6.22 billion, with profits totaling $904 million. Indeed, total revenue for the entire year reached a record $24 billion, with $3.5 billion net income.

    Apple’s money stash amounted to $15.38 billion in cash, cash equivalents and short-term investments. This is an increase of $1.68 billion over the previous quarter and you have to wonder what Apple intends to do with all that money, or are they still hedging against a rainy day some time in the future?

    Clearly Wall Street loved the news, as Apple’s share price went up nearly five percent in after-hours trading. If you want the rest of the figures, go ahead and check Apple’s site for the specific numbers.

    You have to wonder if Apple can’t just rest on its laurels, but the news continues to be coming up roses. As of now, there are reports that Mac OS X Leopard preorders remain at or at the top of the sales charts at Amazon and may, in fact, be selling twice as fast as Tiger, which came out in the spring of 2005.

    Of course, there are millions of additional Mac users now, so that surely helped. At the same time, compared to the totally tepid reaction to Windows Vista, the anticipation for Leopard may be off the charts. Clearly lots of Mac users — and perhaps some potential Windows switchers — are going to be watching Leopard’s early days carefully. If it proves to be a robust operating system, free of serious bugs, the sales rate may even go higher.

    Then again, I suspect a lot of you have new Macs on your shopping lists anyway, and you can be certain a lot of the future sales of Leopard will result from copies preloaded on new computers.

    As to the potential for Windows switchers, Apple stills claims that over 50% of the people buying Macs at their own 197 retail outlets are new to the platform. Unfortunately, it doesn’t seem as if financial analysts care to ask the question of just how Apple arrives at those statistics. I do know a number of people who have purchased new Macs from Apple, but haven’t been asked the key question of what kind of computer they were upgrading from.

    So is this just another case of taking a statistical sample, in the fashion of one of those polling companies? I can’t say that I know anything about the process, except that Apple isn’t giving us the requisite sampling range.

    As to the rest of the analyst conference, Apple typically didn’t provide much meaningful information. Most of the comments amounted to talking points that are designed to enhance their corporate image. Where probing questions were asked, Apple generally didn’t do much but amplify a few facts and figures, and seldom ventured beyond that point.

    What this means on the long haul, however, is that Apple’s executives are happy, their stockholders are happy and, for now at least, Wall Street remains pleased.

    You can also bet that the usual offenders will be carefully dissecting Apple’s numbers to see if they can unearth some bad news in the sea of favorable developments. When they find that information, they will shout it to the skies. One example, perhaps, is the Japanese market, where Apple doesn’t seem to be growing quite as fast as the rest of the world.

    I can just see the headlines now, “Apple drags in Japan.” They admit it’s a “tough market,” though, and they’re working hard to break through. But that’s about it.

    The rest of Apple’s financial picture is supremely robust. Let’s just leave at that.



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    19 Responses to “Apple Smashes Money Records Again!”

    1. Denis Motova says:

      That’s sick. Just like Google, way too much money and nothing to do with it.

    2. That’s sick. Just like Google, way too much money and nothing to do with it.

      Yes, they should learn to share the wealth 😀

      Peace,
      Gene

    3. Denis Motova says:

      I totally agree. It’s about time someone did. I could use a few kk’s.

    4. I totally agree. It’s about time someone did. I could use a few kk’s.

      Yes, give away some Mac minis based on need.

      Peace,
      Gene

    5. Bet Apple posts over a billion dollar profit next quarter.

    6. Bet Apple posts over a billion dollar profit next quarter.

      Not that much of a stretch, Neil, considering their projected revenue.

      Peace,
      Gene

    7. BobS says:

      I believe Apple gets its Switcher number (as well as a wealth of other market research) from surveys that result from registering a new Mac. It seems to me that I always get a survey request a week or two after registering a new Mac.

    8. I believe Apple gets its Switcher number (as well as a wealth of other market research) from surveys that result from registering a new Mac. It seems to me that I always get a survey request a week or two after registering a new Mac.

      Depends on the questions you answer, of course. 😀

      And, frankly, I haven’t gotten any surveys of that nature during or after any new Mac purchases. Color me unlucky, I suppose.

      Peace,
      Gene

    9. Dana Sutton says:

      No, a billion isn’t a stretch at all, seeing that analysts think that Leopard will bring in $250 million. The most interesting statistic that surfaced in the conference call was that 250,000 iPhones have been sold to unlockers (approx. 17% of the 1.4 mil. total units sold). This is very much higher than Wall Street estimates (Piper Jaffray thought 10% at most), and in view of this one wonders how much more customer pressure it will take before Apple caves and adopts a different business model.

    10. Tom Barta says:

      “That’s sick. Just like Google, way too much money and nothing to do with it.”

      Well, they are helping my E*trade account AND building 40 new stores over the next 12 months (1 in Beijing).

      They should spend some finishing AppleTV so it’s really killer. DigitalTV is coming soon– change is in the air. IPTV is getting bigger all the time. As things stand, AppleTV still doesn’t blow MS media center out of the water. I don’t know this from experience; Andy Inknato has said as much from HIS experiments. AppleTV IS a good 1.0 effort, though; people who have them seem to like them.

    11. “That’s sick. Just like Google, way too much money and nothing to do with it.”

      Well, they are helping my E*trade account AND building 40 new stores over the next 12 months (1 in Beijing).

      They should spend some finishing AppleTV so it’s really killer. DigitalTV is coming soon– change is in the air. IPTV is getting bigger all the time. As things stand, AppleTV still doesn’t blow MS media center out of the water. I don’t know this from experience; Andy Inknato has said as much from HIS experiments. AppleTV IS a good 1.0 effort, though; people who have them seem to like them.

      I think Apple admits that AppleTV is just a test to see where such a product might go, and you may not see much of a change until HD content is routinely available for download — and lots of people have the bandwidth to handle it without waiting hours or days to get a single movie.

      I still stay with Netflix and my HD DVR, and I’ve not felt the need to transfer video content from my Mac.

      Peace,
      Gene

    12. tundraboy says:

      I agree. As long as the bandwidth isn’t there, there is no point in spending more development money on AppleTV. The HD content and other ducks will all fall nicely a row once the bandwidth is there.

    13. Dana Sutton says:

      Apple TV so far is pretty much a one-trick pony, it is useful for routing video content acquired from the Apple Store to your t. v. but, as far as I can see, not for much else. So its value is pretty much exactly proportionate to the richness and depth of Apple’s library of video offerings. I can’t help doubting that this library is nearly as large or as compelling as Apple’s music library. In any event, I don’t feel too interested in shelling out the bucks for any one-trick pony, I suspect that to make Apple TV really attractive to consumers it needs a lot more versatility as well, of course, as HDTV capacity. For example, why couldn’t it be developed into a useful tool for both amateurs and pros who make and edit their own video? (And in this context, Gene, Apple ought to go ahead with HD right now and not wait for better bandwidth — the cost of an entry-level HD camera is well within the reach of many consumers.) In an ideal world, I’d like to have a two-way box so that broadcast material could also be routed to my Mac for recording, editing, and long-term archiving, although I realize that copyright considerations will no doubt keep such a box from ever being made.

    14. I don’t think Apple is going to put HD content online until there’s a way to get it to you in a reasonable amount of time. Apple generally wants to have all its ducks in a row before moving into a new market.

      That you can buy a cheap HD camcorder is only part of the equation right now.

      The problem with the Windows marketplace is that companies may be first to get a feature into production, but quite often that feature isn’t really ready.

      Peace,
      Gene

    15. Gary says:

      Maybe I’ve just missed it, but I haven’t seen a single learned PC pundit all day predict the imminent death of Apple. What’s going on???

    16. Constable Odo says:

      I guess there aren’t many Macs in Japan, but from watching new Japanese movies and dramas you’d never guess that. The elite class characters and private businessmen are always using Macs. Usually iMacs and MacBook Pros. Maybe they just keep moving the same ones around after filming or going to Rent-A-Mac shops.

    17. Maybe I’ve just missed it, but I haven’t seen a single learned PC pundit all day predict the imminent death of Apple. What’s going on???

      Well, Rob Enderle was ranting as to how Leopard presales hadn’t been too good. He’s living in another universe, not even a paranormal one 😀

      Peace,
      Gene

    18. Tom Barta says:

      “Maybe I’ve just missed it, but I haven’t seen a single learned PC pundit all day predict the imminent death of Apple. What’s going on???”

      Expect Thurott to chime in, in a day or two.

    19. Dana Sutton says:

      “Apple generally wants to have all its ducks in a row before moving into a new market. That you can buy a cheap HD camcorder is only part of the equation right now.” Insofar as Apple sells video-editing software, it already has moved into the market and it’s got one nice fat duck in the water right now. I could imagine Apple marketing some kind of improved video box with the the premise that it would help you “get the most out of iMovie and Final Cut.” What would such a box actually do? Well, it might be useful for an editor to be able to throw his work-in-progress onto a real t. v. to see what it would look like, and it certainly would be nice if you edit your own video on your Mac and then route it wirelessly to the t. v. in your den, so you can kick back and enjoy the finished product. Add this to what Apple TV does now and it becomes a more flexible and interesting product. Maybe it would be possible to dream up other uses as well (my impression is that the current Apple TV isn’t exactly flying off the shelves, since when people list Apple’s recent successes it conspicuously fails to make the list).

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