Apple releases Q3 2013 numbers, cites $35.3 billion in revenue, $6.9 billion profit

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Date: Wednesday, July 24th, 2013, 06:17
Category: Finance, News, retail

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There wasn’t massive growth, but the numbers were still good.

Per Macworld, Apple reported sales of US$35.3 billion, with net profit at US$6.9 billion for its third fiscal quarter. That translated to earnings of US$7.47 per diluted share. Apple’s revenue marked a record for the June quarter, ticking up 1 percent from the $35 billion Apple posted in last year’s third quarter. Still, profits fell 22 percent year-over-year, down from US$8.88 billion in 2012. Apple also reported a drop in profit during its fiscal second quarter of 2013.

With a tiny increase in revenue but a drop in profit, you’d rightly conclude that Apple’s gross margin dropped: For the quarter, it was 36.9 percent, versus 42.8 percent on the year-ago quarter. That’s because Apple’s most popular products now have lower margins than the top-sellers a year ago.

The company also says it has issued US$18.8 billion in cash to shareholders through dividends and buybacks.

While Apple generally keeps a tight lid on future product announcement, company officials did reiterate a point made during its second-quarter earnings announcement in April—that the company plans to roll out new products starting this fall and into the next year. “We are laser-focused and working hard on some amazing new products,” CEO Tim Cook said in an statement accompanying Apple’s earnings announcement.”

Apple says it sold 32.2 million iPhones—a record for the June quarter. That’s up from 26 million iPhones in the year-ago period. For the U.S., iPhone sales rose 51 percent year-over-year, Apple says.

The picture was less rosy for iPad sales, but Apple has a perfectly reasonable explanation for the 14 percent drop in tablet sales from last year’s third quarter. A year ago, Apple introduced the third-generation iPad and enjoyed a full quarter’s worth of sales to the tune of 17 million units. This quarter, sales fell to 14.6 million iPads.

Still, Apple has plenty of reason to remain bullish on the iPad. Company chief financial officer Peter Oppenheimer said that the iPad ranked tops in a 2013 U.S. tablet satisfaction survey by JD Power and Associates. And during the quarter, the company inked a deal with the Los Angeles Unified School District, the second largest district in the U.S., to roll out iPads to 640,000 students.

In fact, the iPad got the bulk of the credit for a strong quarter of sales to U.S. schools. According to Oppenheimer, the last three months generated the highest quarterly revenue ever for Apple’s U.S. education institution business.

Mac sales also fell in the quarter, down 7 percent from last year to 3.8 million units. Still, Oppenheimer pointed out that the 3.8 million Macs sold beat Apple’s own expectations. And Apple’s sales still were ahead of the total PC market, which saw sales contract by 11 percent according to estimates from research firm IDC. By Apple’s math, the Mac gained market share during the quarter.

The Mac was one of the few product lines to see any changes during the quarter, with Apple updating its MacBook Air lineup at the beginning of June by adding new Intel processors. Company executives had little to say about any impact those new laptops had on overall Mac sales, but Oppenheimer did call it the most successful MacBook Air launch to date, adding that customer response was great.

But during the call, executives implied that there were better things to come. Oppenheimer noted that June’s Worldwide Developers Conference included previews of both the Mac Pro and the next version of OS X, code-named Mavericks.

The iTunes Stores—which includes the App Store, Mac App Store, iBookstore, and the music, movies, and TV sections of iTunes—generated $4.3 billion in billings, Oppenheimer said, culminating in the best week and best month ever for App Store. That translated to quarterly revenue of US$2.4 billion, up 29 percent year over year. Total quarterly revenue from iTunes, software, and services generated US$4 billion in revenue.

Oppenheimer said that Apple now has over 320 million iCloud accounts, and 240 million Game Center accounts.

As for brick-and-mortar retail efforts, the Apple Store saw revenue of US$4.1 billion for the quarter, virtually unchanged from the year-ago quarter. Oppenheimer reported that Apple saw 16,000 visitors per store each week.

For the quarter, Apple had an average of 405 stores, with average revenue per store at US$10.1 million, down US$1 million from the year-ago quarter. Apple opened six stores across five countries during the quarter, giving it 408 stores around the globe; 156 of those outlets are outside the U.S.

The company plans to open nine new stores during the September quarter, giving it 27 new openings during the 2013 fiscal year. It’s not just about new stores, however: Apple says that it relocated four of its stores to more appealing spots; it will complete 23 such relocations before the end 2013 fiscal year in September.

Where stockholders are concerned, the company’s Board of Directors has announced another cash dividend, this one at US$3.05 per share of common stock, payable on August 15 to any shareholder as of August 12.

For the next quarter, Apple is predicting revenue between US$34 billion and US$37 billion, with gross margins between 36 and 37 percent. That sales figure would put Apple’s performance in line with the US$36 billion in revenue it reported in the fourth quarter of 2012. For the coming quarter, Apple also predicts operating expenses will be between US$3.9 billion and US$3.95 billion, with a tax rate of 26.5 percent.

Stay tuned for additional details as they become available.

Analyst sees late September launch date for iPhone 5S, earlier launch dates for next-gen iPads, Haswell-based Retina Display MacBook Pro

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Date: Tuesday, July 23rd, 2013, 06:06
Category: Hardware, iPad, iPhone, Rumor

The guesses as to when the next-gen iOS devices are out.

Per AppleInsider, according to a research note obtained by the web site, KGI Securities analyst Ming-Chi Kuo, Apple’s so-called “iPhone 5S” is seeing setbacks in the production of “numerous components,” as well as handset assembly, meaning the next-gen smartphone will be available in limited amounts following a late September launch.

“While shipments forecasts may still grow sharply in 4Q13, we are concerned iPhone 5S may face the same problem as its predecessor, namely that by the time supply matures, demand will already have waned, hurting shipments,” Kuo writes.

The analyst also sees shipments of the much-rumored low-cost iPhone being below expectations, though the device will be available sooner than the iPhone 5S due to a less complicated manufacturing process. Kuo sees the model being priced at US$450 to US$550, with shipments capped at 26 million units for 2013. Market consensus had shipments at 30 to 40 million units.

As for Apple’s tablet plans, Kuo notes a redesigned 9.7-inch version will be the “highlight of iPad in 2013,” as no new iPad mini model is set for release this year. The analyst says Apple is unlikely to debut an anticipated Retina display version of the 7.9-inch tablet with A7 SoC this year. Due to higher energy demands attached to the Retina panel, as well as the components required to improve power efficiency in such a small form factor, Apple will likely shoot for a launch in March or April 2014.

Interestingly, Kuo points to a possible cheaper iPad mini running a legacy A5 processor. That device could still see release by the end of 2013, December at the earliest, but given the model is unlikely to see a substantial price cut compared to the current iPad mini, Apple will most likely debut the tablet next year.

Finally, the Mac lineup will see continued upgrades to Intel’s Haswell silicon in the coming months. Apple’s Retina display MacBook Pro is looking at a mid-September refresh, while the iMac will get the chips in late August.

Stay tuned for additional details as they become available.

Rumor: Apple testing larger-screen versions of upcoming iPhone, iPad devices

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Date: Monday, July 22nd, 2013, 06:09
Category: Hardware, iPad, iPhone, Rumor

Maybe there’s money to be made in the larger display market.

Per the Wall Street Journal and 9to5Mac, Apple and its suppliers are reportedly testing versions of the iPad and iPhone with larger displays.

Apple and its Asian component makers are testing larger screens for iPhones and tablets, officials at the company’s suppliers say.

Due to mounting competition from hardware competitors like Samsung, a larger-screened iPhone has long been expected and rumored. However, this is one of the first specific claims for a larger sized iPad. In March of this year, an unverified claim emerged for a 12.9-inch iPad model being in the works with a rather unlikely name. The report pointed to a display “measuring slightly less than 13 inches diagonally.”

A June report claimed that Apple and its suppliers are testing versions of the iPhone with both 4.7-inch and 5.7-inch screens. With Apple likely releasing a new iPhone with the same design as the iPhone 5 later this year, it seems likely that Apple’s 2014 iPhone will include significant design changes. The WSJ report does not specify screen sizes for the future iPhones.

The 2013 iPhone update, likely known as the “iPhone 5S”, will include an improved camera system, better chip, and potentially a slow-motion camera mode and fingerprint sensor.

As for today’s larger iPad claims, as Apple moves forward in its post-PC initiative, and as Mac sales dwindle, larger iPads that could replace more Mac features seem plausible.

In 2012, Apple slightly enlarged the iPhone display size by increasing the screen to 4-inches diagonally. Apple also shrunk the iPad by debuting a 7.9-inch model called the iPad mini.

Stay tuned for additional details as they become available.

Verizon follows trend, announces Edge smartphone upgrade program

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Date: Thursday, July 18th, 2013, 07:46
Category: iPhone, News, retail

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If you’re a Verizon aficionado, this isn’t the worst thing in the world.

Per AppleInsider, in response to similar offerings from rivals AT&T and T-Mobile, Verizon on Thursday unveiled its new Edge smartphone upgrade program, offering subscribers the ability to upgrade to a new handset after six months.

Verizon Edge is pitched as a “flexible equipment payment plan,” allowing customers to spread the retail price of a new phone over a 24-month period. If users pay 50 percent of the retail cost of their smartphone, they can upgrade to a new phone in as soon as six months.

The new program is available for any smartphone that Verizon offers, including Apple’s iPhone lineup. Customers choose the phone they want along with a month-to-month service plan.

The full retail price of the handset is then divided over two years. Customers pay the first month of that plan at the time of purchase.

When a customer upgrades to a new phone after six months, the 24-month payment period starts over again. Verizon Edge, which launches for Share Everything customers on August 25, does not include any service contracts, finance charges or upgrade fees.

The announcement comes only a few days after Verizon’s main rival, AT&T, announced its own similar plan, dubbed Next. With AT&T Next, customers can upgrade their smartphone or tablet every 12 months with no down payment and no activation or upgrade fees.

Starting July 26, AT&T will allow customers to spread the cost of a new smartphone or tablet over a 20-month period as part of their monthly wireless bill. Subscribers will have the option to trade in their device and upgrade to a new model after one year.

Both AT&T and Verizon followed in the steps of T-Mobile, which unveiled its own program called Jump last week. That service allows customers to upgrade their smartphone as often as two times per year at an added cost of US$10 per month.

T-Mobile Jump allows customers to pay the same subsidized price for a new smartphone as a new customer. Subscribers are required to wait at least six months after enrollment, after which they will be able to trade in their phone and upgrade to a new model twice a year.

Verizon’s announcement on Thursday leaves out only Sprint as the only carrier among the “big four” wireless providers in the U.S. that does not offer an early upgrade subscription program.

Stay tuned for additional details as they become available.

Microsoft releases native Outlook Web Application for iOS

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Date: Wednesday, July 17th, 2013, 08:04
Category: iOS, News, Software

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You may not love it, but your workplace does and Microsoft finally released a native version for iOS.

Per The Unofficial Apple Weblog, Microsoft has released two different native versions of its Outlook Web Application for iOS, one for iPhone and one for iPad. OWA for iOS connects to the email, calendar, and contacts of Office 365 of business subscribers giving them complete access to their Outlook on the go. Beyond those basic tools the app features push notifications and a powerful voice search that can access your contacts or bring up your calendar.

iOS for iPhone and iPad requires iOS 6.0 or later to install and run.

Top three Russian wireless providers drop iPhone over subsidies, other costs

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Date: Wednesday, July 17th, 2013, 07:29
Category: iPhone, News, retail

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If you’re headed to Russia and need to pick up an iPhone, your options may have become a bit more limited, comrade.

According to Fortune, three major Russian wireless providers have stopped carrying Apple’s iPhone, with the largest telecom, MTS, dropping the handset due to the high subsidy costs associated with being an Apple partner carrier.

As reported last week, Russia’s largest provider by subscribership, MTS, announced that it would be dropping the iPhone from its lineup, saying subsidies and marketing costs were to blame.

“Apple wants operators to pay them huge money, subsidizing iPhones and their promotion in Russia,” said MTS CEO Andrei Dubovskov. “Now it’s not beneficial for us. It’s good we stopped selling the iPhone as these sales would’ve brought us a negative margin.”

Fortune’s Philip Elmer-Dewitt speculates three factors played a part in the “big three’s” decision to ditch Apple’s handset. First, Russian carriers are limited by the federal agency Rospechat, which does not allow subsidies on the same level as seen in the U.S. For example, MTS is not able to offer an iPhone 5 for US$199.

Duties and taxes are also higher than normal for Europe, with an unlocked 16GB iPhone 5 selling for roughly US$925 on on the just-opened Russian Online Apple Store, or US$276 more than an identical U.S. variant. Apple says US$140 goes to Russian VAT, while the remaining US$129 is for foreign exchange rates, import duties, and channel mark-up.

Finally, Apple’s contract requirements, specifically those pertaining to marketing, are said to be extremely stringent. Because the contract terms are unknown, it is impossible to tell whether Russian carriers are subject to any special clauses.

The future of the iPhone in Russia is unclear, though estimates from IDC suggest that demand for the handset was already on the decline, dropping to 8.3 percent in the second quarter of 2013, down from 9 percent in 2012.

Stay tuned for additional details as they become available.

Apple vows to aid investigation surrounding electrocution of 23-year-old woman using charging iPhone 5

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Date: Tuesday, July 16th, 2013, 07:55
Category: Hardware, iPhone, Legal, News

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It’s hard to say where this will go.

Per Reuters, Apple has said it will aid in the investigation of the death of a Chinese woman who was allegedly electrocuted when she answered a charging iPhone 5.

Apple announced the company is “deeply saddened” by the “tragic incident” that killed 23-year-old Xinjiang woman Ma Ailun. Apple vowed to “fully investigate and cooperate with authorities in this matter.”

Police say Ma was killed when she answered a call on her charging iPhone 5. The story gained traction when her sister wrote on the microblog Sina Weibo to warn other users to be careful.

Prior to the incident in China, there have been no widespread claims about faulty charging with the iPhone 5. Apple did recall iPhone 3G power adapters back in 2008 over a shocking risk that affected just a “very small” number of adapters.

Negative publicity in China regarding warranty policies prompted Apple to issue a formal apology in April. Since then, the company has been more aggressive in publicly responding to negative reports from the Chinese media.

Stay tuned for additional details as they become available.

Apple, Google may be improving relations following Jobs’ passing

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Date: Friday, July 12th, 2013, 07:13
Category: News

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It’s funny how quickly things can change in the world of tech. One second, former Google CEO Eric Schmidt is on stage with Steve Jobs during the iPhone introduction, and the next, Jobs is threatening to destroy Android and go “thermonuclear” against Google for “slavishly copying” the look and feel of Apple’s crown jewel — iOS.

You might also recall that Jobs, during an Apple town hall meeting in 2010, didn’t mince words when asked a question about Google and, in return, replied with the following comment:

“We did not enter the search business. They entered the phone business. Make no mistake: they want to kill the iPhone. We won’t let them […] This don’t be evil mantra? It’s bullshit.”

All that said, it hardly comes as a surprise that Apple over the past few years has removed every Google property from the iOS home screen. You may have also noticed that Bing is now the search engine that powers Siri’s web search results in iOS 7.

Suffice it to say, Google and Apple are full-on competitors and have been for quite some time. Indeed, it almost seems like eons ago when Schmidt actually held a seat on Apple’s board of directors.

But the vitriol between the two companies, as evidenced by Jobs’ statements above, appears to have died down a bit — at least if you’re inclined to believe Schmidt.

Speaking to reporters on Thursday at the Allen and Co media conference, Schmidt said that relations between Apple and Google have improved and that the two companies are having “lots and lots of meetings.”

Reuters reports:

He noted that Google Chief Business Officer Nikesh Arora, who joined him at the press briefing, was leading many of the discussions. The two companies are in “constant business discussions on a long list of issues,” Schmidt said.

That’s all well and good if it’s in fact true, but it’s easy to be skeptical when Google and Schmidt have always played it coy when it comes to publicly characterizing their relationship with Apple.

Possible low-cost iPhone mock ups surface, add to speculation

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Date: Thursday, July 11th, 2013, 06:46
Category: iPhone, Pictures, Rumor

The rumor of a low-cost iPhone lives.

And occasional photos of mock ups tend to keep it alive.

Per 9to5Mac and Gizmodo, a series of mock ups of the new iPhone from Martin Hajek have surfaced. The design doesn’t stray too far from what’s been seen and heard in the past, but the color choices seem to be influenced by Apple’s recently announced iOS 7 update.


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In addition to these new concept photos, some new high-resolution photos of the back shells for the purported cheaper iPhone have leaked. While these images can’t presently be verified, they represent the thought as to what a low-cost iPhone would look like.

Stay tuned for additional details as they become available.

Rumor: Apple considering switch to IGZO displays to boost next-gen MacBook Pro battery life

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Date: Wednesday, July 10th, 2013, 15:54
Category: Hardware, MacBook Pro, Rumor

The next-gen MacBook notebooks could possess even longer lasting batteries.

Per Korea IT News, Apple is once again rumored to be considering indium gallium zinc oxide (IGZO) LCDs, this time for inclusion in not only upcoming versions of its iPad, but also in its forthcoming MacBook Pros. A recent report has the Cupertino company talking with Sharp and LG Display in preparation for wider manufacture.

The new MacBooks would reportedly be scheduled for release some time early in 2014, though the report gives no word on when IGZO-packing iPads would be set for release. The latest speculation surrounding the iPad does make mention of reduced backlighting and improved battery life, both of which could be outgrowths of IGZO technology.

An oxide semiconductor, IGZO is about 10 times faster in electron mobility than an amorphous silicon semiconductor. This allows the technology to consume far less power in operation. IGZO also requires smaller wiring, which also contributes to its lower power consumption.

The panels are significantly more expensive than traditional LCDs, though, so that could represent an obstacle for Apple in bringing them to market in the MacBook Pro line. Some estimates have Apple paying 1.5 to two times as much for the same panel sizes seen in current models.

A switch to IGZO could be in keeping with Apple’s already established goals for this generation of MacBooks. When introducing the 2013 MacBook Air, Apple made sure to note that the inclusion of Intel’s new Haswell processors had boosted overall battery life to 12 hours for the 13-inch model. The inclusion of less power-intensive displays could push the next generation of MacBook Pros to even greater heights.

Apple has long been rumored to have been looking at IGZO technology for future devices. Previous rumors have focused on the iPhone or iPad.

Stay tuned for additional details as they become available.