Apple cites $15.7 billion in sales, $3.25 billion profit for 2010 Q3 financial report

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Date: Wednesday, July 21st, 2010, 04:37
Category: Finance, News

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Apple generated its best quarter to date, reporting US$15.7 billion in sales and a profit of US$3.25 billion yesterday with shares accelerating US$3.51 per share, up 75% in the year over year from the same period in 2009. The company’s results beat analyst expectations of $3.10 a share and $14.74 billion in revenue according to Macworld.

The company sold a record 3.47 million Macs during the three-month period ended June 26, 2010, another quarterly record for the company that topped the previous high sales mark by 100,000 units. Mac sales increased 33% over the 2.6 million units Apple sold in the third quarter of 2009. Oppenheimer noted that Apple’s 33% sales growth topped the 22% growth rate market research firm IDC projects for the overall computer market.

As expected, portables drove Mac sales for the three months ending in June. Of the 3.47 million Macs sold, 71% were laptops.

The third quarter also marked the first full quarter of sales for the iPad, Apple’s new tablet. Apple said it sold 3.27 million iPads during the quarter with the company seeing US$2.17 billion in recognized revenue from iPad sales during the quarter. The tablet is currently shipping in 10 countries, and Apple plans to introduce the iPad to 9 more countries on July 23rd. The company also stated that it’s selling iPads just as fast as it’s making them, while attempting to increase manufacturing capacity.

Apple sold 8.4 million iPhones in the third quarter, a 61% jump over last year’s figures. The iPhone 4, which debuted in the waning days of the third quarter, made up about 20% of those sales—or more than 1.7 million units. Apple called the iPhone 4 launch the most successful product launch in its history.

Consumer demand for the new phone has been so great, in fact, that Apple has had trouble filling orders. Last month, the company announced that it would delay the release of the white iPhone 4—it’s expected to ship by the end of July. iPhone 4 orders placed through Apple’s online store list a three-week shipping wait as of this writing. (In contrast, the 8GB iPhone 3GS ships within 24 hours.)

Apple saw recognized revenue from its handsets of US$5.33 billion during the quarter, up 74% from last year’s figures. Apple says the iPhone has a sales value of US$5 billion, for an average selling price of US$595.

Combining the sales of the iPhone, iPad, and iPod touch, Apple sales there are now 100 million devices running its iOS mobile operating system.

iPod sales fell during the third quarter of 2010. Though the company sold 9.41 million iPods, the figure represented an 8% drop from the 10.2 million music players Apple sold in the year-ago quarter. The iPod segment has seen declining growth for some time now, particularly outside of the holiday shopping season. During the fiscal second quarter, iPod sales dipped by 1% while the 2009 third quarter saw a 7% decline in sales.

Despite the decline, the music device remains the top-selling MP3 player internationally and continues to command a 70% market share in the U.S. More significantly to Apple, the iPod touch continues to grow with Apple stating that sales of that product were up 48% from the year-ago quarter, leading to a 12% increase year-over-year in average selling price for the music player. Apple’s iPod segment saw quarterly revenue of US$1.5 million, a 4% increase from last year.

With regard to the iTunes Store, Apple cited more than $1 billion in revenue, a growth rate of 25% year over year. The mobile app segment of the store has grown to 225,000 apps, with 11,000 specifically built for the iPad. Users have download more than 5 billion apps from the App Store, Apple says.

Apple ended the third quarter with 293 Apple Store locations, the company opening seven more during the three-month period. Four of those new stores were opened in the U.S., while two opened in Australia; the remaining new store was in Canada.

Retail stores generated US$2.58 billion in revenue during the quarter, jumping 73% from the year-ago numbers. Apple sold 677,000 Macs via its retail stores, compared to 492,000 last year; half of the Macs sold at Apple Store were to customers new to the platform, Apple says.

Apple plans to open 24 stores during the fourth quarter. In addition to an outlet in Shanghai, China, that opened earlier this month, noteworthy store openings include ones in Paris, London, and Apple’s first two stores in Spain.

Apple ended its fiscal third quarter with US$45.8 billion in cash and short-term investments, up from US$41.7 billion at the end of last quarter.

For the fiscal fourth quarter ending in September, Apple expects revenue of US$18 billion and earnings per share to come in around US$3.44. Analysts were predicting sales of US$17.03 billion and earnings of US$3.82 per share in advance of Apple’s announcement on Tuesday.

Apple said it would defer revenue during the quarter as a result of its decision to offer free cases to iPhone 4 customers. Last week, the company made its free case offer after reports of reception problems related to the placement of antennas in the iPhone 4. Oppenheimer put the cost of the case giveaway at US$175 million; Apple will recognize the cost of those cases as they’re delivered to customers.

Apple shifts remaining online, retail Bumper stock over for giveaway

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Date: Tuesday, July 20th, 2010, 05:55
Category: iPhone, News

When in doubt, throw some free bread to the rioting masses…

Per iLounge, Apple has pulled its remaining stock of iPhone 4 Bumper cases from its retail and online Stores ahead of its free giveaway. A check with an Ohio-based retail store, as well as with Apple�s online store, shows no availability of the Apple-branded cases, and a retail store representative confirmed with iLounge that the cases had been pulled due to the giveaway.

Apple announced on Friday that it would be offering a free Bumper or other, yet-to-be-determined case to all current iPhone 4 users and those who purchase the handset by September 30th due to complaints over the iPhone 4�s antenna issues.

Stay tuned for additional details as they become available.

Game Review: Predators™

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Date: Monday, July 19th, 2010, 11:41
Category: Fun, Game, News, Review, Software

The Predators game for iPhone, iPod Touch, and iPad is a direct tie-in with the recently released Predators movie by Robert Rodriquez (directed by Nimrod Antal) distributed by Chillingo for Fox Mobile. I haven’t seen the movie yet but I’ve been told it’s good fun and the game seems to do it’s job of getting me a little more jazzed to see it. Unlike a lot of game-movie tie-ins, this game actually has some solid play value.

One of the things appreciated about this game is that is it a Universal app, meaning the same app plays on all three “i” devices. An issue that bugs me a little is games that require you to buy a completely new app in order to play it in full resolution on the iPad. I understand that developers have to make money, and that they do have to do some extra work, but it just feels wrong to have to pay a second, higher price for a game I already paid for. I wish they would just work out a system to upgrade to a Universal app for the difference of the two. On a side note, I had a problem with the game on my iPad crashing on launch, but rebooting the iPad seems to have fixed it so far.

Off my soap box, and onto the action.

In this game, you are playing the role of the Predator which is a nice switch up. This is probably because he has all the cool gadgets. The first several “missions” teach you the essentials of mauling and beheading humans for trophies. There are also in-play tutorials for learning to use the gadgets like the wrist knives, shoulder cannon, and the cloaking device. Later, you also get other abilities like thermal vision. I really liked how the tutorials played out so you can get used to using just one weapon or combo attack, rather than just being thrown into a melee and having to figure it out.

The game isn’t strictly a shoot ‘em up either. In some scenarios, you get more points for stalking your prey in cloaked mode, and killing humans undetected. There are also human “boss” characters which represent the main characters from the film such as Royce who is played by Adrian Brody in the film. These guys are harder to beat. I haven’t gotten too far in the game, but so far the terrain has just been your basic jungle with some different environmental factors like darkness or rain (with makes you more visible in cloaked mode). I’ve been through about seven levels and it hasn’t gotten boring yet, so I hope it just keep getting better.

The game stays very true to the Predator feel and mythos. Even the crosshair for the shoulder cannon works like it did in the movie and you can shoot people behind you. The graphics can be a bit gruesome if you are worried about younger audiences. There is lots of blood and your Predator very clearly rips people in half and pulls their head off with a nice, wet, ripping sound. Obviously the graphics are very good and optimized for the iPhone 4 and iPad, and the sounds are quite good as well; probably taken directly from the movies. You will also be happy to know that the game is compatible with iOS 4′s backgrounding, so you can leave in the middle of a mission and come back in the same spot and continue. There is also a pause menu too, until the iPad gets iOS 4.

I liked the iPad version the best, but mainly because the controls cover less screen than the iPhone version. Menus are slightly different for the iPad, but the gameplay is identical to the iPhone/iPod Touch version. I liked that none of the combos were too complicated. I find that annoying about some console games because you end up concentrating too much on how many buttons to push instead of the game. The controls are pretty good and straightforward. There is a “joystick” on the left and action buttons on the right. There are also toggles for things like night vision, weapons, and cloaking. It isn’t a problem for me, but I’d like to see more games give people the option of flipping the controls. The only problems I had were the ones inherent in a touch-based system; when the action gets fast, you tend to slide your fingers off the controls and can’t center again without looking away form the action. Perhaps I have more trouble with this than most people, but I can’t really fault the game for this.

Lastly, the game uses the Crystal gaming network. The frustration I have with all the game networking systems could be a whole post in itself. I’m waiting to see how Apple’s Game Center changes things. Developers naturally have investments in tying themselves to particular systems, but I wish you could choose which system to use for each game instead of being forced to use the one the developer picks.

I highly recommend this game. If you like action games, shooters, and anything to do with Predators, this game is a steal at $2.99.

iOS 4 upgrade offers some battery life improvements over iOS 3 for iPhone 3G, 3GS handsets

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Date: Monday, July 19th, 2010, 04:30
Category: iPhone, News

With the recent release of iOS 4.0 and iOS 4.0.1, one question has needed to be answered: does the update boost your iPhone’s battery life. Per Macworld, it does, the lab downgrading an iPhone 3G that was running iOS 4 to iOS 3.1.3 and running a series of tasks. The staff then upgraded the iPhone 3G to iOS4 and ran the same set of tasks.

The iPhone 3G with iOS 4 lasted 5% longer (10 minutes) than the iOS 3-configured iPhone 3G.

In additional tests, there proved to be an even greater increase in battery life with iOS 4 on an iPhone 4GS, with the updated iPhone 3GS lasting 14% longer (35 minutes) than with iOS 3.

Take a gander at the article for specific details behind each test. And in spite of AntennaGate, the iPhone 4 and the usual complaints that come with any upgrade (“iOS 2.0 used to paint my house for me and that’s why I’ll never upgrade!!!”), it’s nice to see the battery life improve a bit.

Rumor: Apple to update iMac, Mac Pro desktops for fall, add USB 3.0, improved FireWire

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Date: Monday, July 19th, 2010, 03:12
Category: iMac, Mac Desktop, Rumor

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Amidst the cacophony of the iPhone 4 press conference, French website Hardmac reported Friday that Apple aims to update its iMac and Mac Pro desktops in time for its back to school sales period. The report cited one of the site’s “better sources” in relaying the information.

“On this occasion, Apple should inaugurate two great innovations, the arrival of USB 3.0 and a faster FireWire interface, 1600 or 3200,” they wrote. “Thus, FireWire will not be forgotten. Note that Apple is also interested in LightPeak technology, but they do not expect to use it or set it up before one year.”

Finally, the report also said that the new hardware will not support Blu-ray discs. That news should come as no surprise to those who have heard Apple Chief Executive Steve Jobs’ assessment of the format. Jobs was recently alleged to have said that the physical medium’s days are dying, and will give way to digital download services like iTunes.

The USB 3.0 specification was in Apple’s hands over a year ago. The new standard will be ten times faster than the current Hi-Speed USB standard (USB 2.0), and also more power-efficient, leading to lower active and idle power requirements. Like its predecessor, USB 3.0 is backwards compatible with USB 2.0 devices.

Rumors of a new Mac Pro have persisted for all of 2009, with Apple expected to adopt Intel’s Gulftown processor, the 32nm Core i7-980X with six cores. The chips have 12MB of L3 cache. Apple usually doubles the processors in its high-end professional workstations, so it’s possible the new Mac Pro system could have a total of 12 cores and 24 threads.

The last major refresh to the Mac Pro equipped it with its Nehalem Xeon processors, with a high-end eight-core Mac Pro offering two 2.26GHz Quad-Core Intel Xeon 5500 chips. Last year, Apple quietly upgraded that to a potential maximum 2.93GHz eight-core system.

Last October, Apple updated its iMac desktop line, redesigning the hardware with a new edge-to-edge glass design and seamless all-aluminum enclosure. The LED-backlit iMacs come in screen sizes of 21.5″ and 27″.

Stay tuned for additional details as they become available.

Apple offers free bumper to iPhone 4 customers, explains antenna issue at press conference

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Date: Friday, July 16th, 2010, 10:49
Category: iPhone, News

After being hounded by weeks of complaints regarding the iPhone 4′s antenna, Apple today held a press conference to tackle the press conference head on.

While the company didn’t issue a sweeping recall, it noted that you can get a free bumper case (or a refund if you’ve already purchased one) and that since they can’t make bumpers fast enough, you’ll be able to select from a choice of cases on the Apple website starting late next week.

Per the full play-by-play over at the Apple Core, iPhone 4 customers still have the option of returning the phone for a full refund, with no restocking fee within 30 days. Apple also announced that the white iPhone is going to start shipping at the end of July and that its bringing the iPhone to 17 more countries on July 30, including:

Australia
Austria
Belgium
Canada
Denmark
Finland
Hong Kong
Ireland
Italy
Luxembourg
Netherlands
Norway
New Zealand
Singapore
Spain
Sweden
Switzerland

Stay tuned for additional details as they become available.

Rumor: Apple to avoid iPhone 4 recall, offer details at press conference later today

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Date: Friday, July 16th, 2010, 05:11
Category: iPhone, News

In spite of the press conference scheduled for today, the iOS 4.0.1 update and Apple’s well-documented problems with the iPhone 4′s antenna and reception, a new report claims that a recall of the handset won’t be among the announcements.

According to the Wall Street Journal, a source close to the story has stated the company doesn’t plan to instate a recall of the more than 2 million units it’s shipped worldwide thus far.

That same source echoed an earlier report in claiming that hardware engineers warned chief executive Steve Jobs about the risks of the phone’s new external antenna design nearly a year ago, but that Jobs “liked the design so much that Apple went ahead with its development.”

The report went on to document how Apple’s immense secrecy over new iPhone masked the problem during the company’s evaluation process with its carrier partners, as design verification units were disguised as “stealth” phones that obscured their design and some of their functions.

“Those test phones are specifically designed so the phone can’t be touched, which made it hard to catch the iPhone 4′s antenna problem,” the Journal said. The paper added, citing people familiar with the matter, that Apple afforded carriers “limited time to test the iPhone 4 before its June 24 launch” and equipped them with “fewer devices to test than other handset makers.”

Although Apple declined to comment on its development methods for the new iPhone, a company spokesperson fired back at the claim that a senior antenna expert had expressed his concern over the new design to Jobs, challenging the publication to “produce anything beyond rumors to back this up.”

“It’s simply not true,” the spokesperson said.

Concerns over the iPhone 4′s new antenna design began generating headlines ever since its June 24th launch, when some users began reporting the handset’s propensity to lose reception and sometimes drop calls when cupped in the lower left corner.

Though media coverage of the matter persisted for a couple of weeks on and on-and-off basis, it reached a boiling point earlier this week when Consumer Reports did a 180-degree turn on its stance on the iPhone 4, and announced that it could no longer recommend the device to consumers because of the antenna issues.

Since then, the matter has only escalated further up the chain, with democratic New York Senator Charles Schumer on Thursday issuing an open letter to Jobs, calling Apple’s current solutions to fixing the problem “insufficient” and asking the company to provide a free fix for consumers.

So yeah, it’s been a fun three weeks…

Stay tuned for additional details as they become available.

Apple releases iOS 4.0.1 for iPhone, iOS 3.2.1 for iPad, hunts down long-standing bugs

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Date: Friday, July 16th, 2010, 04:03
Category: iPad, iPhone, News, Software

Following up on rumors, Apple has released iOS 4.0.1 via iTunes. Per MacNN, the update makes just a single major change, that being improved accuracy in iPhone signal display. The company recently promised a software fix in light of reception issues, though it’s now believed the problem is traceable to hardware. The download is only available for the iPhone 3G, 3GS and 4.

For iPad owners, Apple has meanwhile posted iOS 3.2.1. The firmware solves several issues, most notably trouble with Wi-Fi connections. It also corrects a glitch with PDF attachments in Mail, and two video bugs: one causing videos to freeze, and another hampering the official iPad Dock Connector to VGA Adapter. The one feature addition is Bing support for Safari search.

To download and install the updates, which each weigh in at over 300 megabytes, attach your iPhone or iPad to your computer, open iTunes, select the device and search for an update. The process will occur as per usual.

Apple is scheduled to hold a full iPhone 4 press conference today. Stay tuned to the PowerPage for additional details as they become available.

And if you’ve noticed any major changes or would like to offer feedback on this, let us know.

Consumer Reports vouches for Apple’s Bumper as resolution to iPhone 4 antenna bug

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Date: Thursday, July 15th, 2010, 04:49
Category: iPhone, News

There may be a light at the end of the tunnel for Apple’s iPhone 4 reception issues. On Wednesday, Consumer Reports announced that Apple iPhone 4 owners can eliminate reception problems by enclosing their phones in the “Bumper” case Apple sells.

The findings could presage a decision by Apple to offer iPhone 4 owners a free Bumper, as the publication confirmed yesterday that it has been in contact with Apple over its testing results.

Per Macworld UK, the consumer testing organization said it could not recommend the iPhone 4 because of major reception issues when users touched the external antenna, the publication’s engineers went back into their lab to retest with iPhones equipped with Bumpers.

Apple’s Bumper, which retails for US$29, represents the company’s first efforts to move into the iPhone case market.

“With the Bumper fitted, we repeated the test procedure, placing a finger on the Bumper at the point at which it covers the gap [on the lower left side of the case],” said Paul Reynolds, Consumer Reports’s electronics editor, in an entry on the magazine’s blog on Wednesday afternoon.

The publication tested only Apple’s Bumper, although another Consumer Reports editor said yesterday that it was planning on evaluating several different cases.

“The result was a negligible drop in signal strength – so slight that it would not have any effect, in our judgment.”

On Monday, Consumer Reports explained its could-not-recommend decision by describing testing of three different iPhone 4s in its radio frequency (RF) isolation chamber, where a cell tower emulator simulates real-world signals.

The magazine’s engineers also tested several other AT&T-sold phones, including the iPhone 3GS and the Palm Pre. None of those phones showed the signal-loss problems of the iPhone 4.

Stay tuned for additional details as they become available and I’ll happily trade you my first born for a Bumper should the need arise…

Analyst: Full iPhone 4 recall could cost Apple $1.5 billion, affect operating income by 1%

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Date: Wednesday, July 14th, 2010, 04:08
Category: iPhone, News

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Following up on the iPhone 4 antenna issue, one research investment firm has studied the numbers and determined that a recall of the iPhone 4 could cost Apple as much as US$1.5 billion.

Toni Sacconaghi, an analyst for Bernstein Research, said in a note to clients on Tuesday that while a full product recall is “highly unlikely,” it could theoretically cost the company up to US$250 per phone. Sacconaghi estimates 6 million units sold or in transit, resulting in a recall price tag as high as US$1.5 billion according to CNET.

Another option is for Apple to offer an in-store hardware fix, which could cost US$75 per phone. Giving away a free bumper case, which currently retails for US$29, would be a much cheaper alternative for the Cupertino, Calif., company. Sacconaghi estimates this approach would cost just US$1 per unit.

The report arrives just a day after Consumer Reports warned that it could no longer recommend the iPhone 4. After conducting its own tests inside a radio frequency isolation chamber, the organization issued a statement on its blog reversing its previous recommendation of the phone.

For its part, Apple earlier this month released an open letter stating that the iPhone 4′s reception issues were largely due to an inaccurate formula for calculating signal strength. The company assured that a free software fix would be available in the coming weeks. Consumer Reports’ findings are in opposition to Apple’s statement.

Another Wall Street analyst, Gene Munster with Piper Jaffray, estimated Tuesday that a fix from Apple could impact its operating income by 1%. Like Sacconaghi, Munster also suggested the possibility of issuing free bumper cases. Additionally, the analyst said that since only 25 of users are affected by the issue, the company could “weather the storm” by doing nothing.

Stay tuned for additional details as they become available.