It has become extremely tiresome repeating the same old criticisms against faux analysts and journalists who think they actually know something about Apple, Inc. This is particularly true when it comes to their soaring sales and profits.
This past quarter, however, the reality was somewhat closer than you may have expected. Total revenue for the quarter was $20.34 million, with a net quarterly revenue of $4.31 billion, or $4.64 per diluted share. Compare that to a total revenue of $12.21 billion and a net quarterly profit of $2.53 billion, or $2.77 per diluted share last year, and you’ll see where sales were very much out of the ballpark in most respects.
Indeed, the specifics across the board were pretty impressive. Total Mac sales were 3.89 million, compared to estimates in the 3.7 million range. The iPad came in somewhat under what some suggested, at 4.19 million, but that Apple’s second PC line has, in its second quarter, already exceeded sales of Macs, represents a crowning achievement. Don’t forget that shipments only recently caught up with demand, and the dealer roster has sharply increased for the holiday quarter, so it’s hard to guess where the totals may go. What’s more, I haven’t begun to look at the sales impact if you combine, as some suggest, iPad and Mac sales, since they are two viable variations on the PC theme.
So far so good, but the real amazing sales number has to be the iPhone, totaling 14.1 million, which is up 91 percent from last year. All this success despite the fact that Apple has yet to catch up with demand, and normal delivery delays are still in the one week range. Don’t forget the alleged impact of Antennagate and the refusal of Consumer Reports to recommend the iPhone 4, which clearly meant next to nothing.
Now compare the iPhone numbers to the 12.1 million BlackBerry smartphones moved by RIM in its last quarter, and you can see where the analysts were thoroughly confounded.
It’s rare for Steve Jobs to be around for a quarterly conference call with financial analysts, but Apple’s mercurial CEO was at his feisty best fielding questions after an opening statement. Referring to the iPhone’s surprising momentum: “It handily beat RIM’s 12.1 million Blackberries sold in their last quarter. We’ve now passed RIM. I don’t see them catching up with us in the foreseeable future. It will be a challenge for them to create a mobile software platform and convince developers to support a third platform.”
If there was a negative figure, it was the sale of 9.05 million iPods, which represents an 11 percent decline over last year in unit sales. However, if you regard an iPhone as, in part, an iPod, the sales deficiency seems quite understandable.
You can find the rest of Apple’s numbers here.
After reporting the fact that the iPhone beat the Blackberry, Jobs went on to boast that no other smartphone platform can match the App Store’s 300,000 apps. He went on to denigrate what he regards as the fragmented user interfaces on the Android OS platform, and the difficulty for customers to get used to the interface differences from model to model and carrier to carrier.
“We think Android is very, very fragmented and becoming more fragmented by the day,” he remarked matter-of-factly. As regular readers of these columns know, I’ve been saying that for quite a while now.
Jobs also went on to point out what Apple perceives to be the deficiencies of the so-called iPad killers, pointing out a major shortcoming of the 7-inch models that have been recently announced. You see, those screens provide only 45% of the display area as an iPad, and, as Jobs says: “This size isn’t sufficient to create great tablet apps.”
So folks who might have held out hopes for a 7-inch iPad won’t get those hopes fulfilled anytime soon — or ever, if Jobs has his way.
On the business front, Jobs said, “We haven’t pushed it [the iPad] real hard in business, and it’s being grabbed out of our hands.”
Jobs, clearly on a roll, exclaimed: “We’ve got a tiger by the tail here, and this is a new model of computing which we’ve already got tens of millions of people trained on with the iPhone, and that lends itself to lots of different aspects of life, both personal and business.”
With the vast majority of Fortune 100 companies working with iPads and iPhones, it’s clear Apple doesn’t have to work terribly hard to expand the platform.
Says Jobs, again referring to those alleged iPad killers: “Our potential competitors are having a tough time coming close to iPad’s pricing. iPad incorporates everything we’ve learned about building high value products. We create our own A4 chip, software, battery chemistry, enclosure, everything. This results in an incredible product at a great price. The proof will be in the pricing of our competitors’ products, which will offer less for more.”
Even more intriguing is Apple’s guidance for the current quarter, with sales projections of $23 billion. Compare that to the industry consensus that Microsoft will report $19 billion in sales, and you can see where Apple won’t just be the tech industry leader when it comes to market cap but, at long last, in sales as well.