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

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

applelogo1.jpg

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.

Apple Releases Aluminum Keyboard 1.1 Firmware Update

Posted by:
Date: Tuesday, January 26th, 2010, 06:14
Category: Software

Late Monday, Apple release version 1.1 of its aluminum keyboard firmware via an update. The new version, a 1.5 megabyte download, improves battery performance of the 2007 aluminum Apple Wireless Keyboard when used in combination with other Bluetooth devices and addresses an issue with the 2007 aluminum Apple Keyboard and the 2007 aluminum Apple Wireless Keyboard where a key may repeat unexpectedly while typing.

apple-aluminum-keyboard

The update requires Mac OS X 10.5.8 on the Mac OS X 10.5 end or Mac OS X 10.6.2 on the Mac OS X 10.6 end to install and run and can also be snagged via Mac OS X’s Software Update feature.

If you’ve installed the update and noticed any major changes, please let us know.

Rumor: AT&T Exclusive iPhone Deal Could End Wednesday

Posted by:
Date: Monday, January 25th, 2010, 05:15
Category: iPhone, Rumor

3gs.jpg

AT&T’s exclusive contract with the iPhone (read: license to essentially print money) could end on Wednesday. Per Electronista, a purported contact within the carrier says exclusivity should end along with the January 27th date. The tipster doesn’t say who would join AT&T in supporting the iPhone, albeit Verizon has often been cited as the most likely pick, in part for the large subscriber base as well as the frequently cited network strength.

While evidence have yet to be provided, possible signs of this have shown up in the following leaked screen capture:

iphone-verizonrumorlg1

A contract found by web site HotHardware has cited a strategy that AT&T strategy that the company has indirectly confirmed itself. The company would “compensate” for losing sole rights to the iPhone by carrying smartphones on platforms it has previously ignored. The carrier has already said it would offer several new smartphones in the first half of the year that include five Android devices as well as Palm’s webOS phones, most likely GSM versions of the Pre Plus and Pixi Plus. It’s also been noted anecdotally that AT&T has lately deemphasized its exclusivity and has instead focused on attacking Verizon.

Per the contact, AT&T has been mentioned as being internally frustrated with the reputation it has garnered through its network problems and may actually be willing to end exclusivity simply to offload the more publicly hostile customers to Verizon. It’s been hinted that some of the complaints may stem from the iPhone having a less than ideal transition from 3G to GSM when 3G isn’t ideal. Nearly all of AT&T’s upgrade efforts in recent months have focused on adding either 850MHz 3G or improving 3G capacity behind the scenes.

Once again, all should be revealed at the media event on Wednesday.

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

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

stone-10

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

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

snowleopard

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

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

newimac.jpg

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.

Rumor: Apple Could Release Verizon iPhone at Jan. 27th Media Event, Additional Tablet Specs Emerge

Posted by:
Date: Thursday, January 21st, 2010, 05:03
Category: Hardware, iPhone, Rumor

verizon-logo-470x310

Albeit a new generation iPhone isn’t expected until June, Apple could use its January 27th media event at the Yerba Buena to announce a Verizon handset next week.

Per AppleInsider, Canaccord Adams analyst Peter Misek has stated that he expects Apple to announce a Verizon iPhone as well as introduce iPhone OS 4.0. The Verizon iPhone could fall under the category of Steve Jobs’ “One More Thing…” used at the end of his product announcement speeches.

Misek said he believes tiered data plans are imminent with most wireless carriers in the U.S., but his checks with industry sources indicate that a Verizon-capable iPhone would still carry an unlimited data plan. He also said that the new handset will run on both CDMA and GSM networks.

“Together with our semi-conductor partners, we have ascertained that there is a reasonable chance the Asian supply chain is prepping for mass production of a new iPhone in March, for availability in late Q2, likely June,” he said.

In addition, he predicted the new handset will have different pricing than Apple’s current model. However, he said, sources have not provided any details on prices.

Misek also stated that he expects Apple to release an LTE-capable “4GS” iPhone in June 2011.

Per Apple’s long-anticipated tablet, analyst Ashok Humar of Northeast Securities has stated that he believes the tablet will be available in a subsidized model through Verizon at launch.

Kumar has offered his thoughts as to the tablet’s specs, which he believes will be manufactured by Samsung and will be based on the Cortex-A8 ARM architecture, rather than the new Cortex-A9, with a speed of about 1GHz.

As for a Verizon-compatible iPhone, Kumar disagrees with Misek that the handset would be a world phone capable of both CDMA and GSM networks. Kumar has stated that dual-mode chips from Qualcomm will not likely see enough availability for a June iPhone launch. Instead, Kumar expects a separate CDMA-only phone to be introduced in 2010, alongside the existing GSM-only models.

Six days and we’ll see what’s what, homegeese. Six days.

Rumor: Additional Tablet Supplier/Content Details Surface

Posted by:
Date: Wednesday, January 20th, 2010, 07:38
Category: Rumor

stone-10

With January 27th and Apple’s expected tablet release date approaching, the rumors are flying in interesting new directions.

First, sources close to Time Inc. have informed MediaMemo that “Apple has only recently started” sharing details about its forthcoming device, and even those discussions have minimal details. Most of the talks between Time and Apple reportedly took place within the last few weeks.

As a result, Time Inc. isn’t expected to have anything to present at next week’s tablet unveiling. The source was quoted as stating that Time remains “intensely interested” in the device.

“But for now, Time Inc. executives are thinking about this stuff in a bit of vacuum, because they don’t know exactly what Steve Jobs has up his sleeve,” the report said. “Tease that out a bit and you can tell the story of most media companies: They’re excited to start taking advantage of the tablet–as soon as they find out what it is, exactly.”

In December, Time Inc. released a video demonstrating how users might read Sports Illustrated on a tablet-like device. Some members of the press were also allowed to test working demos of the concept.

In an interesting development, a new note Wednesday from UBS Investment Research cited industry checks in forecasting that the Apple tablet will be powered by a processor designed by P.A. Semi and built by Samsung. Analyst Maynard Um said it would likely be a complex system on a chip design.

Per AppleInsider, Um pegged Hon Hai Precision Co. as the manufacturer for the tablet, and said LG Display will likely supply most of the screens, with AUO being a second source.

Other parts noted by UBS were:

- Connectors from Chen Uei and Hon Hai.
- Wintek, Sintek and TPK as touch suppliers.
- Batteries from Simplo and Dynapack.
- NAND flash memory from Samsung.
- Broadcom to provide a “combo” chip for connectivity.

The note said the tablet is expected to hit the market at some point in the first half of 2010.

“Key will be timing and price points, in order to asses how material it could be for suppliers,” Um wrote. “In addition, how convincing the device will be could generate debate as per whether the tablet device category could be revived and help overall demand.”

Apple purchased chip designer P.A. Semi for US$278 million in 2008. The company specialized in sophisticated low-power designs.

Finally, Publishers Marketplace has said that “secret” negotiations are taking place between Apple and “nearly all (and most likely all) of the six largest trade publishers” in the U.S. The talks are reportedly underway in New York as Apple preps to unveil its tablet next week.

Those involved said that it’s possible a deal may not be reached in time for the January 27th event. It also noted that publishers could be “seeking greater control over pricing and supply of digital material.”

The rumors follow a report from earlier this week that Apple was in talks with publisher HarperCollins to sell e-books on the tablet, with a business model that would follow that of the existing App Store for the iPhone and iPod touch. Typical bestseller releases could cost about US$9.99, and Apple would give publishers 70% of the revenue, while keeping a 30% share for itself.

It’s speculation at this point, but it’ll be resolved in a week over at the Yerba Buena.

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

Apple Releases Security Update 2010-001

Posted by:
Date: Wednesday, January 20th, 2010, 06:58
Category: security, Software

applelogo1.jpg

Late Tuesday, Apple released Security Update 2010-001 for its Mac OS X operating systems. The updates, which range between a 21 and 159 megabyte download (depending on operating system), address critical vulnerabilities in the system where hackers and malicious software can take advantage and either compromise the system or steal personal information.

The update requires an Intel-based Mac running Mac OS X 10.5 or later for the Mac OS X 10.5 operating system and Mac OS X 10.6.2 or later for the Mac OS X 10.6 operating system and can also be located and snagged with Mac OS X’s Software Update feature.

If you’ve tried the updates and noticed any major changes, please let us know.

Rumor: Apple to Release iPhone OS 4.0 at Jan. 27th Media Event, Details Leaked

Posted by:
Date: Tuesday, January 19th, 2010, 09:08
Category: iPhone, Rumor

3gs.jpg

You’ve got to admit, it’s the rumors that make life interesting.

Boy Genius Report has reportedly received information from a source close to the story claiming iPhone OS 4.0 will be introduced at Apple’s press event next week at the Yerba Buena on January 27th. Per the source, iPhone OS 4.0 will be limited to the iPhone 3G and 3GS (presumably including at least more recent iPod touch models and omitting the original iPhone) and will incorporate solutions for multitasking by running applications in the background and a revamped user interface for easier navigation.

Other changes will include the following:

- There will be multi-touch gestures OS-wide.

- “A few new ways” to run applications in the background — multitasking.

- Many graphical and UI changes to make navigating through the OS easier and more efficient.

- The update will supposedly be available for only the iPhone 3G and 3GS, but will “put them ahead in the smartphone market because it will make them more like full-fledged computers” more than any other phone to date. Everyone is “really excited.”

- A brand new syncing ability for the contacts and calendar applications.

The ability to run iPhone applications in the background has been near the top of many users’ wish lists, but Apple has yet to implement full backgrounding and multitasking due to its effect on performance and battery life, instead opting to deploy push notifications as a means for closed applications to serve data to users.

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