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


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.

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


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.

USB 3.0 Demoed at CES, Initial Peripherals en Route

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


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.

Happy New Year From the PowerPage!!!

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Date: Friday, January 1st, 2010, 07:23
Category: Announcement

Welcome to 2010 and the staff of O’Grady’s PowerPage will be taking the day off to thoroughly rock out to Heart’s “What About Love?” (which will be played on a continuous loop) as well as ponder the upcoming Apple tablet and iPhone OS 4.0 in the new year.

Come back Monday, January 4th, and we’ll continue to do our best to keep you up to date with the best Macintosh mobile news available.


Kaufman Bros. Analyst Predicts Apple, Verizon Alliance Less Likely Than Anticipated

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Date: Wednesday, December 2nd, 2009, 06:27
Category: iPhone, News


Even if Apple is striking a deal with Verizon (currently the largest carrier in the U.S.), competitors T-Mobile and Sprint might be more likely to carry the iPhone in 2010, one analyst believes. Per AppleInsider, Verizon is the top prize in terms of the four major U.S. carriers. Apple is currently in an exclusive deal with the No. 2 carrier, AT&T, which has 82 million customers. But that agreement is believed by many to expire in 2010.

In a new note to investors Wednesday morning, analyst Shaw Wu with Kaufman Bros. said although many believe the iPhone will come to Verizon in 2010, it’s likely wishful thinking. The problem, he said, is both Verizon and Apple have found success by focusing on “customer control.” Their similarities are what he believes will keep them apart.

“Apple runs its own App Store and VZ has aspirations to do so,” Wu said. “Apple controls the media experience with iTunes and VZ with its V CAST service. Moreover, Apple gets very favorable economics with an overall iPhone (average selling price) of US$611 and at AT&T, we estimate it is higher at roughly US$700. RIM, who is by far VZ’s largest smart phone supplier, only has an ASP of $340. Palm’s ASP is US$436 and we estimate Motorola’s Droid ASP is roughly US$450.”

Because Apple and Verizon have conflicting interests, Wu said he believes that a deal between the two companies would take longer than many currently expect. That would make a potential 2010 deal unlikely.

Instead, Wu said that Apple could strike deals with both Sprint, which has 48 million wireless subscribers, and T-Mobile, which has 33 million customers. Both companies are more likely to be agreeable with Apple’s practices in order to offer the iPhone.

“While we believe VZ is likely inevitable at some point when 4G technology rolls out in 2012 or so, we believe Sprint and/or T-Mobile are more willing partners for Apple in helping maintain margins and customer controls,” he said. “From a technology perspective, we believe T-Mobile may have an advantage with a similar 3G UMTS/WCDMA network as AT&T.”

This marks the second time this week an analyst has predicted Apple will jump to T-Mobile in 2010. In terms of technology, T-Mobile would be the simplest choice: Though carrier’s high-speed 3G connectivity operates on a unique 1700MHz spectrum that is incompatible with the current iPhone, the addition of that frequency to a future hardware model would be much simpler than adding compatibility with Verizon or Sprint’s CDMA networks.

Recent rumors have suggested Apple is working on an agreement with chip maker Qualcomm to add CDMA connectivity to a new iPhone in 2010. But both Verizon and Sprint use a technology that, unlike the GSM network of AT&T and T-Mobile, is not widely used abroad.

Another possibility noted by Wu is that Apple could extend its contract with AT&T through 2011. The analyst said he believes AT&T’s agreement ends in the summer of 2010, but a last-minute extension remains a possibility. Earlier this year, there were reports that AT&T was working to extend the contract with Apple for one more year.

Rumor: iPod Touch Camera May See Release Next Spring

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Date: Monday, November 23rd, 2009, 06:19
Category: iPod Touch, Rumor


A long-rumored camera-equipped iPod touch may see the light of day next spring per a source close to the story. A contact insists the device is back on track and that it would unusually launch outside of Apple’s typical upgrade cycle, releasing in spring 2010. To make that goal, however, Apple would use the same 2-megapixel camera as in the iPod nano, which lacks autofocusing and low-light sensitivity.

It’s not known by the Examiner’s supposed insider if Apple would also disable the camera’s ability to capture still photos. While a potential way to differentiate the iPod touch from the iPhone, the pre-existing image tools in the iPod touch firmware would make implementing the technology easier than on the previously camera-free nano.

The accuracy is uncertain and Apple has launched out-of-cycle iPod updates in the past, but has usually kept these to small updates like increased storage or additional iPod shuffle colors; most significant revisions don’t ship until September. Per, a recent story has corroborated rumors of a sensor flaw that had forced Apple to leave a camera out of the model at the last minute but which has since been solved. Prototypes of the original design surfaced in the public eye just a month before the iPod touch was refreshed this past September.

Stay tuned for additional details as they become available.

Apple Wins Key Legal Ruling Against Clone Maker Psystar

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Date: Monday, November 16th, 2009, 04:03
Category: Legal

The lesson for the day: If you didn’t develop or actually license an operating system, you can’t sell computers with that operating system on it. Late last week, clone Mac maker Psystar discovered this in a court decision in the company’s ongoing legal battle with Apple. According to AppleInsider, judge William Alsup ruled this week in a summary judgment that Psystar infringed on copyrights owned by Apple in order to place Mac OS X on unauthorized computers built and sold by the Florida corporation. In addition, Psystar was found to be in violation of the Digital Millennium Copyright Act by circumventing Apple’s protection barrier that prevents installation of its operating system on third-party hardware.

“Psystar infringed Apple’s exclusive right to create derivative works of Mac OS X,” the ruling reads. “Specifically, it made three modifications: (1) replacing the Mac OS X bootloader with a different bootloader to enable an unauthorized copy of Mac OS X to run on Psystar’s computers; (2) disabling and removing Apple kernel extension files; and (3) adding non-Apple kernel extensions.”

Alsup also denied Psystar’s own motion for summary judgment, in which the company attempted to prove that Apple engaged in copyright misuse. The judge ruled that Apple’s End User License Agreement only attempts to control use of Apple’s own software, which is within its rights.

The summary judgment isn’t the final blow and a number of issues remain to be resolved. Apple has alleged that Psystar has also engaged in breach of contract, trademark infringement, trademark dilution, and unfair competition, among other activities.

Another hearing has been scheduled for Dec. 14, and trial between the two companies is due to start in January of 2010.

The decision came after both companies requested summary judgments, which turned into a positive for Apple and a significant defeat for Psystar.

The decision marks the latest of many setbacks for Psystar as it has attempted to defend itself from Apple’s suit. In September, a member of the Psystar defense team withdrew himself from the case. And in July, the Florida-based corporation brought on a new legal team after it emerged from bankruptcy.

The company, which sells machines with Snow Leopard, Apple’s latest operating system, preinstalled began to license its virtualization technology to third-party hardware vendors as of October. The Psystar OEM Licensing Program intends to allow Intel machines made by companies other than Apple to run Mac OS X 10.6.

RadioShack Announces iPhone Sales Plan for 2009/2010

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Date: Tuesday, November 10th, 2009, 05:37
Category: iPhone 3GS, News, retail


If the Droid’s coming out and looking promising, it never hurts to have another retail outlet on your side.

Late last Friday, electronics retailer RadioShack announced that it would begin selling the iPhone in a few New York city and Dallas stores in time for the holiday shopping rush, with wider availability to begin in 2010.

While the addition of another retail outlet to the mix of stores may not do a whole lot for general availability of the device, it shot RadioShock’s stock up over 14% on the first trading day since the announcement, with analysts suggesting that the presence of the iPhone may help to drive up in-store traffic for the Shack during the busy holiday season and year-round.

And still, another 5,000 chain stores never hurts sales…

Axiotron Drops Modbook Prices for Holiday Sale

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Date: Friday, November 6th, 2009, 06:09
Category: Modbook


Late Thursday, Axiotron announced a reduced price for the company’s Modbook tablet Mac. The price fell to US$699 for Modbooks built from a customer-supplied MacBook base system and US$1,599 for Modbooks that include a dealer-supplied 2.13Ghz MacBook base system. The holiday discount program runs through December 31, 2009.

Axiotron today also announced that the Modbook Pro tablet computer, unveiled during the Macworld Expo 2009, is planned for release at the end of the second quarter of 2010.

Every Modbook includes a 90 day Modcare warranty on the entire system (including the MacBook base system, whose warranty is voided during the Modbook conversion). Extended warranty options for one or more years are available through participating Axiotron sales partners. Servicing and repair of the Modbook are provided by Axiotron’s service provider network.

Current Mac OS X 10.6.2 Seed Refers to Unreleased MacBook Pro Notebooks

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Date: Monday, October 26th, 2009, 04:58
Category: MacBook Pro, News


The latest beta seed build of Apple’s upcoming Mac OS X 10.6.2 update references a slew of new Apple notebooks. Per Spanish web site, entries exist in the 10C531 build that make references to “MacBook Pro 6,1″ and MacBook Pro 6,2,” neither of which exists in the market. The current MacBook Pro notebooks range between 5,1 and 5,5.

The move from 5 to 6 in the naming scheme points to these being significant revisions rather than minor refreshes. Both may be signs of early preparation for MacBook Pro portables unofficially expected at the start of 2010. Apple is likely to be one of the earliest adopters of Intel’s upcoming Arrandale processors, which in January should bring the Core i5/i7 architecture to more power-efficient dual-core chips that would fit in a thin-and-light notebook’s enclosure and require a new underlying platform.

If you’ve heard anything from your end or have any ideas as to what to expect, let us know in the comments.