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.

Rumor: Additional Tablet Supplier/Content Details Surface

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

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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.

Rumor: Apple Contacted Media Outfits Regarding Tablet Device

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Date: Wednesday, September 30th, 2009, 04:01
Category: Rumor

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Per Gizmodo, Apple recently approached a number of newspapers, magazines and other print media describing putting their products for sale on iTunes via a new piece of hardware. The report cited people familiar with The New York Times, publishers McGraw Hill and Oberlin Press, and a trip that “several executives from one of the largest magazine groups” took to the company’s Cupertino, Calif., headquarters.

The Apple tablet project has apparently been through a number of different iterations, and the project has been reset numerous times by company co-founder Steve Jobs. The report said that Jobs was presented with a tablet device that ran a modified version of OS X years ago, but the device was shelved because the company could not determine what use people would have for the hardware.

The focus of the hardware now is said to not be the playback of media, which the iPod and iPhone lines already handle well. Instead, Apple is reportedly working to have publishers place their print content on iTunes.

“The eventual goal is to have publishers create hybridized content that draws from audio, video, interactive graphics in books, magazines and newspapers, where paper layouts would be static,” the report said. “And with release dates for Microsoft’s Courier set to be quite far away and Kindle stuck with relatively static e-ink, it appears that Apple is moving towards a pole position in distribution of this next-generation print content. First, it’ll get its feet wet with more basic repurposing of the stuff found on dead trees today.”

The article has stated that the device will debut in early 2010, which seems consistent with the rest of the rumor mill on this issue.

Two employees from The New York Times were allegedly contacted by Apple in June about putting their product on a “new device.” Publishers McGraw Hilll and Oberlin Press are said to be working to put their textbooks on iTunes, possibly in a DRMed format that would allow use for a period of time. Magazine executives are alleged to have presented their ideas on the future of publishing on Apple’s campus. Given the evidence, the report asserts that Apple is looking to go beyond e-readers, like Amazon’s Kindle, to “redefine print.”

Rumor: Apple to Include Blu-Ray Support, Social Media Web Site Integration with iTunes 9

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Date: Monday, August 10th, 2009, 04:00
Category: iTunes, Rumor

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A new report suggests that the next version of Apple’s iTunes could carry support for Blu-ray discs, visual management and rearrangement capabilities for App Store software, and integration with social media Web sites.

According to Boy Genius Report, a “pretty reliable source” revealed new features on Saturday that could be anticipated with the release of iTunes 9.

Citing a “pretty reliable source,” The Boy Genius Report revealed Saturday what could become new features in an anticipated upcoming new release of Apple’s digital media software.

“One of the new additions to iTunes is said to include Blu-ray support,” the report states. “Something else that will most likely make a bunch of people happy is that we’ve been told iTunes 9 will finally include the ability to visually organize and arrange your iPhone and iPod touch applications. Something that wasn’t so clearly described was some kind of Twitter/Facebook/Last.fm integration. Maybe broadcasting what song you’re playing to your friends?”

Sources have recently suggested that two compelling new features would come with Apple’s newest iMacs, leading some to speculate that official Blu-ray support from the company could be coming in the near future. One of those features is said to have long been on the wish-lists of many Mac users while the other is expected to cater to the semi-professional audio/video crowd.

The source for The Boy Genius Report reportedly didn’t provide a time frame for the new iteration of iTunes, but one might assume that Apple could make an announcement at its annual iPod event in September.

If the Blu-ray rumors pan out, it would be a major turnaround for Apple. Less than a year ago, Chief Executive Steve Jobs went as far as to call the technology “a bag of hurt.”

Apple to Release Q3 Financial Results Today

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Date: Tuesday, July 21st, 2009, 05:34
Category: Finance, News

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It’s that time again and Apple has released a media advisory stating that the company will be releasing the financial results for the third fiscal quarter and second calendar quarter of 2009. The results will cover sales from March 28th, 2009 through June 26th, 2009, and will be released at the close of trading (4:00 PM Eastern / 1:00 PM Pacific) on Tuesday.

The conference call discussing the results will follow at 2:00 PM Pacific and will be available via an audio webcast.

Stay tuned to PowerPage throughout the day for updates galore.

Apple CEO Steve Jobs Returns to Work

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Date: Tuesday, June 30th, 2009, 04:27
Category: News

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Apple CEO Steve Jobs returned to work at Apple following a six-month medical leave.

“Steve is back to work,” a company spokesman told Reuters. “He’s currently at Apple a few days a week, and working from home the remaining days. We are very glad to have him back.”

In January, Apple announced that Jobs, who was thought to be suffering from a hormone imbalance that was contributing to his weight-loss, would take a medical leave through the end of June after discovering that his health problems were “more complex” than originally thought.

It was later revealed that Jobs spent much of that waiting for, receiving, and then recovering from, a liver transplant that was conducted at Methodist University Hospital in Memphis, Tennessee.

James D. Eason, M.D., chief of transplantation and professor of surgery at the hospital, would later say that Jobs’ prognosis following the surgery was “excellent.”

Jobs Acknowledges Liver Transplant, Cites Good Condition

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Date: Wednesday, June 24th, 2009, 04:35
Category: News

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Working to settle the question of his health once and for all, Apple chief Steve Jobs has acknowledged that he did undergo a liver transplant at Methodist University Hospital and that he has come out of surgery in good condition.

Per AppleInsider Jobs gave permission to the Tennessee hospital to publish the news after a leak on Friday had all but confirmed the operation in the southeastern state.

Program director Dr. James D. Eason justified the transplant, which can sometimes be controversial due to its uncertainty, by noting that Jobs likely needed it. He was the patient with the greatest likelihood of developing an end-stage liver disease among those with a blood type matching the next available donor liver; as such, he was a prime candidate for the operation.

Even so, as he was the patient with the greatest risk in the waiting line, Jobs is now believed to have come out of his surgery with an “excellent prognosis” and a strong recovery.

Jobs declined to provide more information on the reasons for the surgery or his current state, but experts may have answered these questions themselves. Physicians speculating about the operation suggest that, like the majority patients who recovered from the form of pancreatic cancer he had in 2004, the cancer had metastasized in his liver, creating the “hormonal imbalance” that ultimately forced Jobs to take leave of his normal office for the past six months.

Tennessee is known to have been chosen for the small size of its transplant waiting list. Where the median number of days a patient would have to wait for a procedure in the US was 306 as of 2006, Tennessee’s list was just 48. Methodist University Hospital also points out that it’s one of the ten largest locations offering liver transplants in the U.S. and that Jobs specifically chose the hospital due to its strong reputation for patient survival rates.

Though it’s currently unknown just how healthy the Apple CEO is or when his surgery actually took place, Jobs has purportedly been seen on campus this week. He was also quoted in a press release for the first time in months on Monday.

Jobs Receives Liver Transplant, Expected to Return to Apple at End of June

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Date: Monday, June 22nd, 2009, 09:23
Category: News

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While it was never entirely clear what Apple co-founder Steve Jobs would do to recuperate between January and June, a Wall Street Journal article maintains that he’s had a liver transplant and that his return to work may be gradual at first.

Citing sources close to the story, the article state that Jobs had his transplant two months earlier through doctors in Tennessee. Although these are sometimes problematic, the company head is viewed as “recovering well” and on track to resume his usual post in the often-repeated late June timeframe.

Upon his return, Jobs isn’t expected to go full-out, as usual. Instead, his physicians have reportedly advised him to only work part-time for the first “month or two” until it’s certain he can handle a full slate.

As a consequence, Tim Cook, normally the chief operating officer and temporarily handling chief executive duties during Jobs’ absence, may now be more involved with Apple’s leadership than he has in the past. How much of this will vary from his current acting CEO role isn’t clear, but it’s hinted he may be placed on Apple’s board of directors sometime soon, giving him greater sway over the direction of the Mac maker.

The transplant, if true, could well create a much clearer picture of what triggered Jobs’ rapid weight loss in 2008 and his forced break in 2009. Washington University doctor William Hawkins believes that the pancreatic cancer that affected Jobs in 2004, once thought cured, metastasized again in his liver — the organ most likely to continue supporting that particular form of cancer. About three quarters of all those who recover from the initial pancreatic tumor get that cancer again.

Strangely enough, few opt for a liver transplant, as spare organs are rare and there’s no guarantee that replacing the cancerous organ will solve the problem. The odds are nonetheless good and again see three quarters of those who pick the transplant option surviving at least five years longer. Tennessee was likely chosen as the waiting list was shorter than in other states and feasible for a man with the income to travel wherever he could get the quickest treatment.

Not surprisingly, confirming any of these assertions proves difficult through Apple’s tendency towards secrecy, and especially that of Steve Jobs, who has long expressed frustration with journalists and investors intruding into what he sees as a private matter. None of the hospitals committed to regularly performing liver transplants say they have Jobs as a patient. When asked, Apple spokeswoman Katie Cotton would only echo the company’s official statement that Jobs “continues to look forward” to his end-of-June return.

Report Cites Jobs as Ready to Return to Apple

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Date: Friday, June 5th, 2009, 09:27
Category: News

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Apple’s stock rose appreciably following news that company CEO Steve Jobs is on track to return to the company from his medical leave of absence as planned.
Per a Reuters article, sources have cited that Jobs will return by the end of the month, which would place his comeback ahead of Apple’s Worldwide Developer Conference in San Francisco on Monday, an event at which Jobs unveiled Apple’s 3G iPhone a year ago but had not been expected to attend this time.
Jobs, 54, had said his medical leave would run until the end of June when he initially announced the move in January, setting the stage for a July return. Company representatives had said repeatedly he remained involved in strategic decisions and would return as scheduled.
Jobs was treated for a rare type of pancreatic cancer in 2004. He appeared gaunt at an Apple event last June and in January said he would take a leave of absence because his health problems were “more complex” than originally thought.
The Apple CEO’s recovery “is coming along,” the news wire reported.
The report also said two people who do business with Apple have been told by Apple managers that the company is trying to coordinate Jobs’ return with a product launch or public event.
Stay tuned for additional details as they become available.

Woz Cites Jobs as “Healthy”, “Energetic” Prior to Scheduled Return to Apple

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Date: Thursday, May 28th, 2009, 08:58
Category: News

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Joker/dancer/Apple co-founder apparently had the opportunity to speak with Apple CEO Steve Jobs recently and has reported that Jobs sounded “healthy” and “energetic” with a little over a month prior to his scheduled return to the company.
Woz’s comments appeared yesterday at on the Wall Stree Journal’s web site, and though Wozniak admitted to having never asked Jobs about his health directly, he told representatives for the financial paper that his one-time pal “doesn’t sound like he’s sick,” nor does he appear to be battling a dire health problem.
The upbeat comments contrast with those made by Jobs’ real estate attorney Howard Ellman last month during a town council meeting to determine whether the chief executive should be free to demolish a historic but abandoned mansion he owns in the Woodside Hills.
“I don’t think he would be strong enough if we were here until 1 a.m., and I think there’s a strong possibility of that,” Ellman said, referring to the time it would take for the local review board to hear all arguments on the matter.
On January 14th of this year, Jobs stated that he would take a medical leave from his daily role at Apple through the end of June in order to attend to health issues that turned out to be “more complex” than he originally thought.
Although he underwent successful surgery for pancreatic cancer in 2004, Jobs’ health would again emerge as a topic of public concern when he appeared increasingly gaunt during Apple media events in 2007 and 2008.
Wall Street analysts have used recent quarterly conference calls to press members of Apple’s leadership for an update on Jobs’ health, to which they’ve responded by saying they still expect Jobs to return at the end of June.
It remains unclear as to what capacity Jobs will return to the company in and some analysts have speculated that if he does return, it will be in the form of a reduced role such as Chairman.
Stay tuned for further information as it becomes available.