Apple Posts $3.38 Billion Profit, $15.68 Billion in Sales for Q1 Results

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Date: Tuesday, January 26th, 2010, 07:56
Category: Finance, News

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Even if the global economy’s in iffy shape, you can’t tell it by Apple.

Per Macworld, the company posted its best-ever performance for the first fiscal quarter, citing tallied sales of US$15.68 billion and a net quarterly profit of US$3.38 billion. That compares to year-ago figures of $11.88 billion in sales and US$2.26 billion in net quarterly profit.

“We’re extremely pleased with our record-breaking performance, including our 32% in growth in revenue and 50% growth in net income,” Apple chief financial officer Peter Oppenheimer told analysts during a Monday afternoon conference call to discuss Apple’s quarter numbers.

The company’s quarterly performance translated to earnings of US$3.67 per share, up 47% from the US$2.50 per share that it earned in the year-ago quarter.

Apple’s reports, which may seem a bit off in comparison to last January’s returns, reflect the retrospectively adopted Financial Accounting Standards Board’s amended accounting standards during the 2010 first quarter. Adopting those standards significantly alters how Apple accounts for certain items such as the iPhone and Apple TV sales. The revised standards allow Apple to recognize revenue and product at the time of sale and the company has restated its results for the 2007, 2008, and 2009 fiscal years to reflect this change.

“We believe [the new accounting rules] will better enable us to recognize the underlying economics and performance of our business,” Oppenheimer said.

For the 2010 fiscal first quarter, Apple sold 3.36 million Macs, up 33% from the 2.5 million units the company sold in Q1 of 2009.

The Mac sales figure sets a new record, topping the 3.05 million Macs Apple sold during the fiscal fourth quarter of 2009.

The fall revamp of the iMac line helped boost desktop sales for the quarter. In October, Apple replaced its 20″ and 24″ iMacs with new 21.5″ and 27″ configurations of the all-in-one desktop. Apple sold 1.23 million desktops in its first quarter of 2010, an increase of nearly 70% from the 728,000 desktops it sold a year ago.

Notebook sales came in at just under 2.13 million units sold during the first quarter, a number which accounts for 63% of all the Macs sold during the quarter. Portable sales rose 18% from the 1.796 million laptops Apple sold in the year-ago quarter.

Overall education sales for Mac products grew 16% from last year, reflecting Apple’s best growth rate in that segment since before the start of the current recession, according to chief operating officer Tim Cook. The K-12 and higher-education channels both reported record sales for the December quarter.

“Our whole education business is based on really understanding teaching, learning, and student achievement, and we think we’re the only tech company that really gets that,” Cook said.

iPhone sales reached record heights in the quarter with the company selling 8.7 million iPhones in three months, breaking the record of 7.4 million set in the previous quarter. iPhone sales were twice what they were during the previous year’s first quarter with the sales value of those 8.7 million iPhones exceeding US$5.4 billion. The average selling price of iPhone models was down 5% versus the prior year, likely owing to the existence of the cut-rate US$99 iPhone 3G model.

In response to a question from an analyst, Cook offered praise for often-criticized U.S. wireless partner AT&T. “AT&T is a great partner,” he said. “In the vast majority of locations, we think iPhone customers are having a great experience… AT&T has acknowledged that they’re having a few issues in some cities, and they have plans to address these. We have personally reviewed these plans, and we have high confidence [in them].”

Regarding Apple’s acquisition of Quattro Wireless, a mobile advertising company, Cook said that Apple “look[s] forward to providing developers with a great opportunity for advertising,” but that mobile advertising is currently “in its infancy.”

Not every product segment saw growth during the quarter and iPod sales fell 8% from Q1 of 2009, as Apple sold 21 million music players during the quarter. However, Oppenheimer characterized that decline as expected. Indeed, overall iPod sales growth has been flat for some time—sales have declined for three consecutive quarters now.

Still, Apple executives didn’t sound particularly bothered on Monday by the iPod’s quarterly performance. The music player continues to gain market share internationally, and its share of the U.S. market remains at more than 70%, according to Oppenheimer.

Despite the lower iPod numbers, Oppenheimer said Apple sold 55% more iPod touches this year than it did in the first quarter of 2009. The average selling price of the iPod increased by 9% during the quarter, driven by sales of the touch.

Oppenheimer told analysts on Monday that the iTunes Store had enjoyed a “record-breaking quarter,” though the company provided no revenue figures for its online retail arm for music, movies, TV programs, and mobile apps.
Retail and other figures

Apple finished the first quarter with 283 retail stores, after opening 10 new outlets during the quarter. Those openings included high-profile stores near the Louvre in Paris and New York’s Upper West Side. Apple also remodeled 32 stores during the quarter, for a total of 100 remodels during the 2009 calendar year.

Retail revenue rose 17% to US$1.97 billion for the quarter. Average revenue per store was US$7.1 million, up from US$7 million in the year-ago quarter. The brick-and-mortar stores sold a record 680,000 Macs, with half of those sold to customers who were new to the Mac.

Apple is expected to open between 40 and 50 stores during the 2010 fiscal year, Oppenheimer said, with half of those outlets located outside the U.S.

Even after a quarter of cash outlays that included the purchase of online music streaming company Lala, the company reported that it now holds cash and short-term investments totaling US$39.8 billion, up $5.8 billion from the previous quarter.

Looking ahead to the March quarter, Oppenheimer told analysts to expect sales between US$11 billion and US$11.4 billion. That compares to restated sales of US$9.1 billion for the fiscal second quarter of 2009. Apple expects earnings between US$2.06 and US$2.18 per share for the upcoming quarter; that compares to US$1.79 per quarter a year ago, after adjusting for the new accounting rules.

“The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about,” CEO Steve Jobs said in a statement accompanying Monday’s earnings release.

Analytics Firm Spots iPhone OS 3.2 Traffic from Possible Apple Tablet Devices

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Date: Monday, January 25th, 2010, 05:21
Category: News

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Mobile analystics firm Flurry claims to have discovered evidence of 50 tablet-class devices accessing web sites from Apple’s campus. Per the Flurry blog, the researchers noted that all of the devices are running the as-yet-unreleased iPhone OS 3.2. The move suggests tablets may have a significant update to the interface but not necessarily a major overhaul.

The report also mentions that the devices appear to be using existing iPhone apps but that the bias appears to be towards games, suggesting a heavy entertainment focus. It also has a significant daily media component, such as e-readers and Internet radio. In many cases the downloads were for very recent apps. Media sharing, social networking and travel guides were also common app categories among the 50 devices.

Additional features remain unknown while the questions and speculations should end on Wednesday at Apple’s Yerba Buena press event.

Details Emerge for Expected Mac OS X 10.6.3 Changes

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Date: Friday, January 22nd, 2010, 15:28
Category: News, Software

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Mac OS X 10.6.3 will include significant enhancements to QuickTime X while also focusing on printing and Logic performance.

Per AppleInsider, sources close to the story have stated that build 10D538, which arrived roughly two weeks after the company issued build 10D522, included support for OpenGL 3.0 as well as an update to QuickTime X that, when finalized, will improve security and compatibility while simultaneously enhancing overall reliability. The release will also include tweaks that aim to enhance the performance of Apple’s 64-bit Logic pro audio suite. Other planned improvements include better compatibility with third-party printers and OpenGL-grounded applications, those same people say.

In addition to those areas, Apple is reportedly asking developers to focus their evaluation efforts on a few other core system components, such as AirPort, VoiceOver and graphics drivers.

A single issue related to photo albums viewed via the company’s Front Row media center software is said to be plaguing the latest beta.

The 665+ megabyte release is expected to be made public sometime in the next six weeks.

27″ iMac Delays Continue, Set Shipments Back Three Weeks

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Date: Friday, January 22nd, 2010, 06:30
Category: iMac, News

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Things can’t be perfect all the time.

After apparently resolving shipping delays with its popular 27″ iMac desktop, Apple has delayed forthcoming orders of the computer by three weeks.

According to AppleInsider, while the 21.5″ models of the new iMac currently ship within 24 hours, as of Thursday new 27″ iMacs have a three-week estimated shipping time. Only days ago, the Mac maker had improved its supply of the larger models to shipping times of less than a week.

The sudden delay comes just one week after Apple’s authorized resellers began receiving their volume shipments of the 27″ model.

Stay tuned for additional details as they become available and if you’ve seen this delay on your end, please let us know.

AT&T, Verizon Drop Calling Plan Rates, Unlimited iPhone Plan Reduced by $30 Per Month

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Date: Monday, January 18th, 2010, 05:59
Category: iPhone, News

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The pot shots between wireless carriers Veizon and AT&T continue with Verizon Wireless on Friday cutting the prices of its unlimited talk and text plans and AT&T immediately following suit. The end result benefits iPhone customers, who can now opt for an unlimited voice and data plan that costs US$30 less per month.

Per Macworld, iPhone users paid US$100 per month for unlimited voice plan plus another US$30 for unlimited data. Starting Monday, however, AT&T is charging US$100 a month for unlimited voice and data. Family Talk plans feature unlimited voice and data for US$180 (assuming two iPhones). Texting prices remain unchanged, at US$20 for unlimited plans and US$30 for Family Talk Plans.

An AT&T spokesman stated that the pricing changes only affect unlimited voice and data plans. Full details as to the new pricing structures can be found here for reference.

For users looking to move over to the new plan, they can make the move starting today without penalty or contract extension using AT&T’s online account management tool.

Rumor: Next-Gen iPhone to Go Into Production Earlier, Feature Magic Mouse-Like Casing

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Date: Friday, January 15th, 2010, 07:26
Category: News

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If it wasn’t for rumors, things would be factually accurate.

And sort of boring.

Per Bloomberg News, Apple will introduce a new iPhone in 2010 that will employ a touch-sensitive plastic back casing similar to the one used on the company’s new Magic Mouse, one analyst has said.

In a recent interview, Robert Chen with Goldman Sachs Group Inc. said the new iPhone will go into production as early as April, and will be available to customers in June or July. Chen said the plastic back panel of the phone could have a touch-sensitive solid shell, much like on the Magic Mouse.

The new hardware could also include an updated version of the iPhone operating system, Chen said.

“Apple’s going to put a lot of innovation, not just on the hardware, but also on the software of the new iPhone,” he told Bloomberg.

Chen’s predictions are more in line with conventional thinking than a report from earlier this week, in which executives at a South Korean wireless provider claimed a fourth-generation iPhone could see a limited debut in April with a dual-core processor and potentially a removable battery.

Contrary to that rumor, Apple typically announces new iPhone hardware at its annual Worldwide Developer’s Conference. It is believed Apple could hold that event starting June 28, coinciding with Chen’s claims of a June or July debut for the new iPhone.

The Magic Mouse, which was introduced in October, lacks any physical buttons on its solid acrylic surface. It allows multi-touch controls that are closer to that of a MacBook trackpad, allowing secondary clicks and finger-based gestures.

Stay tuned for additional details as they become available and we’re looking forward to seeing what comes out of the scheduled Yerba Buena media event on January 27th.

Apple Now Holds 7.4% of U.S. Market Share in Recent IDC Report

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Date: Thursday, January 14th, 2010, 06:28
Category: News

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In spite of a lagging economy, Apple was able to keep its domestic market share above 7% in a 31% year-over-year comparison to 1.5 million units sold.

Per AppleInsider, Apple outpaced the rest of the U.S. PC market, which also grew an impressive 24% in year-over-year during the fourth quarter (the three-month period ending December), according to preliminary data released Wednesday by market research firm IDC. Apple’s sales were enough to keep its placement as the fifth-largest domestic PC maker, behind HP, Dell, Acer and Toshiba, respectively.

In total, Apple sold an estimated 5.6 million computers in the U.S. in during the 2009 calendar year, good for an overall 8% share. This was up slightly from the 5.2 million units and 7.9% share the company held in 2008, representing 8.2% year-over-year growth. Apple was the fourth-largest U.S. PC maker in all of 2009.

While Apple is growing, sales data shows that its slice of the market is not. That can be attributed to the booming market for low-end netbooks, which sell for a few hundred dollars and earn manufacturers razor-thin profit margins. By comparison, Apple’s believed to retain some of the highest margins in the industry, often hovering above 30%.

“Low-cost notebooks and mini-notebooks were the biggest contributors to the successful fourth quarter,” said David Daoud, research manager with IDC’s U.S. Quarterly PC tracker.

Overall PC growth during the fourth quarter was bolstered by the launch of Windows 7, which pushed the industry to a record quarter of 20.7 million units for the three-month period. IDC said that consumer confidence was a key factor in these advances, though business spending has lagged behind and is likely to take some more time to take hold.

“The U.S. market exploded in the 4th quarter driven by a series of factors contributing to the unexpected 24% year-on-year growth,” Daoud said. “First is the rubber-band effect and recovery from the year-ago quarter, which suffered from buyer contraction when the economic crisis was confirmed. Then vendors responded with new low price points to stimulate demand and face competition.”

Global sales were also strong, with the market seeing a 15.8% yearly gain. Overall, the fourth quarter of 2009 represented the first double-digit growth in PC shipments since the third quarter of 2008, IDC said.

Rumor: Next-Gen iPhone to Include OLED Screen, Dual Core Processor, Other New Features

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Date: Wednesday, January 13th, 2010, 06:27
Category: News

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What’s life without rumors?

Aside from, you know, accurate and filled with information that’s been solidly confirmed by sources and publications.

Per the Korea Times, high-ranking executives at wireless carrier KT, Apple’s exclusive carrier in South Korea, have commented that the next-generation iPhone will include an OLED screen, support video chat and – perhaps most surprisingly – have a removable battery.

The unit will reportedly feature a dual-core processor, more powerful graphics and an improved camera. The officials say that KT’s corporate clients will get the new phones in April as a “litmus test” before they’re provided to local distributors in June.

International availability isn’t specified in the report, but an upgraded iPhone in June would fall in line with Apple’s history.

Following the feature-by-feature breakdown, an OLED screens seems likely. This feature was rumored for the iPhone 3GS and never came to fruition. Competitor Google’s Nexus One handset has just arrived with an OLED screen, thereby perhaps pushing Apple to include one as well.

The removable battery on the other hand seems less likely, as Apple has a history of non-removable batteries in its iPhone and current notebook lineups. Last February, The Register dug up a few battery-related Apple patents, one of which describes a method for removing batteries from mobile devices and charging them in a host computer, so Apple might have a trick up its sleeve.

Video chat could arrive in the next iPhone, but prove to be a double edged sword, as wireless carrier AT&T might express concern about potential bandwidth use. This feature would also require a front-facing camera, which could be valuable even without video conferencing.

Korea Times says the 4G iPhone is being pushed out early to quell rising interest in Android phones, though this has yet to be confirmed.

Stay tuned for additional details as they become available and let us know what you think in the comments.

Adobe Releases Acrobat, Acrobate Reader 9.3 Updates

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Date: Wednesday, January 13th, 2010, 05:00
Category: News

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Last Friday, Adobe released version 9.3 of Acrobat and Acrobat Reader, the company’s Portable Document Format reader and creation utility.

Adobe Systems has updated Acrobat and Reader to version 9.3. Both updates are available through the Adobe Updater application or for download through Adobe’s Web site.

The new versions address a number of customer workflow issues, security vulnerabilities, and offer additional stability.

Both Adobe Reader 9.3 and Adobe Acrobat 9.3 require Mac OS X 10.4 or later to install and run. Adobe Reader 9.3 is available for free while Adobe Acrobat 9.3 retails for US$299.

USB 3.0 Demoed at CES, Initial Peripherals en Route

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Date: Monday, January 11th, 2010, 06:50
Category: News

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Over at CES, Jeff Ravencroft, the president of the USB Implementers Forum discussed the arrival of USB 3.0 and gave a brief demonstration of transfer speeds on a Hewlett-Packard.

The demo proved one thing: USB 3.0 is much faster than the current USB 2.0 protocol, a nearby display showing the one minute four second time necessary to move a 2.1 GB file from a notebook to an external hard drive under USB 3.0 as opposed to two minutes and seven seconds under USB 2.0.

Per CNET, the USB 3.0 standard is more power efficient than USB 2.0 “This uses one-third of the power it would take on USB 2.0,” said Ravencraft, in an interview at CES. “And it’s backward compatible,” he said, meaning it can also handle peripherals that use older USB standards.

On the peripherals friend, hard drive maker Western Digital has announced a new WD My Book based on the USB 3.0 specification with an adapter card, which will make an existing desktop PC USB 3.0-compatible.

Also, cards that go into a laptop’s ExpressCard slot are available, Ravencraft said. This allows an existing laptop to be upgraded to 3.0.

No official word has been made available as to when USB 3.0 ports and peripherals will arrive on Apple’s products.