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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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