Unstoppable force
We quite often hear other players in the mobile device space insist they're not competing with Apple - implying they occupy a different part of the market. The truth of the matter, however, is that they're conceding that right now it's futile to take on Apple directly, and so they're restricting themselves competing within the ‘non-Apple' market.
And who can blame them when you see quarterly results like the ones Apple just reported? The June quarter (Apple's Q3) is generally the quietest due to the absence of any universal sales catalysts such as holiday season or back-to-school. But Apple managed to break new records for revenue - $28.57 billion - and profit - $7.31 billion ($7.79 EPS). Analysts had been expecting revenue of $25 billion and EPS of $5.85.
"We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50." Apple's shares were up around four percent in pre-market trading at time of writing.
"We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," said Steve Jobs, Apple's CEO. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall."
We had a listen to the earning's call and extracted a few more nuggets from it:
- Apple is releasing MacOS X Lion today. This was a record June quarter for Macs.
- The iPod and iTunes still deliver a lot of revenue (almost $3 billion) and the iPod still has over 70 percent of the US MP3 player market.
- Over 20 million iPhones were sold in the quarter. Sales of the iPhone quadrupled in AsiaPacific. Apple added 42 new operators in nine new countries, making it 228 and 105 respectively. There was a lot of talk about how well it's doing in enterprise. There was also the admission that Apple needs to be in the pre-pay market.
- Apple sold every iPad it could make, so the figure of over nine million sold was constrained by supply. There was lots more enterprise hype, and it was commented that none of the other tablets appear to be getting any traction to speak of. It was conceded that there is some cannibalisation of Macs by the iPad, but Apple thinks Windows PCs are being affected much more by this.
- Apple TV was downplayed, with it still being referred to as a hobby by Apple.
- There was a lot of reference to the ChangeWave report, which indicated Apple is comfortably ahead when it comes to customer satisfaction and intent to buy.
While the iPhone numbers are huge, the most eye-catching were those for the iPad. We've reproduced Apple's summary table below, and you can see that iPad sales and revenues doubled quarter-on-quarter. This meant that, for the first time, revenues from the iPad ware greater than for Macs, which still had a good quarter. For Apple to achieve that little more than a year after introducing the iPad to the market is pretty remarkable.
