Print 23 comment(s) - last by sebmel.. on Jul 22 at 8:10 PM

Apple continues to gain momentum on the back of strong Mac, iPhone sales

2010 has seen the introduction of several new or revamped products for Apple. We've seen new MacBook Pros, new MacBooks, the introduction of the iPad, a redesigned Mac mini, and of course the new iPhone 4.

Of those aforementioned products, the Mac mini and iPhone 4 were the only ones to be released since Apple's blowout Q2 2010 results. The Mac mini got flak for its $100 price increase while we the controversy surrounding the iPhone 4 is legendary.

Despite these bumps in the road since April 20, Apple's financial might is still fully on display. The company announced today that revenue for the third quarter came in at a record $15.7 billion while quarterly profit was a healthy $3.25 billion. Those numbers compare to $9.73 billion and $1.83 billion respectively from the same period one year ago. Earnings per share came in at $3.51.

Apple sold 3.47 million Macs during the quarter (33 percent increase from a year ago), 3.27 million iPads, and 8.4 million iPhones (61 percent unit growth compared to a year ago). The only downside was the company's iPod unit which saw sales drop eight percent year-over-year to a still impressive 9.41 million units for Q3.

Apple shares are up 3.5 percent in after hours trading.

It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” said Apple CEO Steve Jobs “iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

Apple didn't give any guidance to how much “Antennagate” will cost – the company announced last last week that it would provide free cases to customers who purchased iPhone 4s and will refund the $30 purchase price of bumpers that have already been bought direct from Apple. Apple's free case/case reimbursement program will begin later this week and will last until September 30.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

iPad Sales Decline
By Digobick on 7/20/2010 5:55:52 PM , Rating: 1
Apple was selling 35,000-43,000 iPads per day, but those sales figures tell me that they've only sold 10,000 iPads per day since hitting 3 million.

How long before we see a price cut to boost sales?

RE: iPad Sales Decline
By Gungel on 7/20/2010 6:19:16 PM , Rating: 2
And that includes sales in additional countries since they started selling the iPad. Would be interesting to see how many units they sold in July for the U.S. only.

RE: iPad Sales Decline
By Commodus on 7/20/2010 6:30:38 PM , Rating: 3
The 270,000 units beyond 3 million were only up until the end of Apple's fiscal quarter, on June 26. Apple sales haven't tanked at all; they're actually growing, because it's expanding production and going to more countries but still is facing constant sellouts.

RE: iPad Sales Decline
By Gio6518 on 7/20/10, Rating: -1
RE: iPad Sales Decline
By retrospooty on 7/20/2010 9:01:49 PM , Rating: 1
"and even with the iphone 4 "reported sales", apple is still losing mobile market share...."

Mac's "meteoric" rise from 3 to 5% marketshare has stalled as well. Its about at its peak. They make plenty money and arent going away, but I dont see them ever gaining more than 5-6% global market share. Not now that Windows 7 is out and clearly better then OSX

RE: iPad Sales Decline
By ralniv on 7/20/2010 11:19:49 PM , Rating: 2
Not sure what aspect of Mac's marketshare data that has you underwhelmed. There are only a small handful of companies ahead of Apple (e.g. HP) and Mac sales volume continue to grow faster than most of their competition.


Note: These stats do not include tablet (e.g. iPad) sales and are for US only. Apple is not in the top 5 worldwide.

The numbers look much stronger for Apple if you focus on the home market or if you consider PCs above $1,000. Apple actually dominates the later bracket. Yes, Apple is expensive, but people buy lots of them and Apple profits are commendable.

RE: iPad Sales Decline
By retrospooty on 7/21/2010 8:24:52 AM , Rating: 2
"Not sure what aspect of Mac's marketshare data that has you underwhelmed. "

The part about PC=91% and Mac = 5% of the global market part.

Underwhelmed isnt really the right word. Apple is doing well, thier profit margin's are through the roof. I was just stating how their market share isn't growing, it has hit its ceiling at 5%.

RE: iPad Sales Decline
By sebmel on 7/21/2010 1:36:20 PM , Rating: 1
"The part about PC=91% and Mac = 5% of the global market part."

Have you ever considered how that 91% is made up?

Microsoft claim that 50% of all Windows installations are pirated. In 2007 Microsoft announced that 22% of WGA authentications fail, and obviously, most pirates don't authenticate. That may come as a shock to US citizens but many countries openly pirate a lot of software.

So you can reduce that 91% by half immediately, if your interest is how well a company is doing financially.

Regarding the remaining 45.5% you can consider how many of those were a personal choice and not a business PC. I don't have that figure... so if someone does perhaps they could offer it to the discussion. Dell will explain to you how hard it is to make money out of selling business PCs. Apple's 5% looks less significant than it is, in BUSINESS terms.

Consider cellphones as an example. Apple sells about 7% of all smartphones. It's a tiny percentage of the total number of phones. Yet Apple makes more profit from phones than Nokia, the world's leading cellphone manufacturer by numbers.

There is a lot to be said for targeting the profitable end of the market. You can do things like bundle apps to push sales without any of the hassle Microsoft suffered just from bundling a browser.

Apple may be selling only 5% of PCs and a tiny portion of the cellphones but they are taking a serious chunk of the profit out of each of the markets they enter.

Finally, developers have known for years that Apple customers tend to spend more than PC users on software. The Mac community supported a much larger number of shareware developers that their tiny numbers suggested they should, way back in the 90's, even when the company appeared to be floundering.

The iPhone app store continues to bear this out, and statistics from the very recent iAds market shows the same thing. So, again, that 5% is far more significant commercially than number suggests.

Wealth disparities in the USA are currently approaching the levels of the 1920s. Look at these figures from 2008:

Top earners vs National wealth

This is an involved subject, and obviously what people spend on a company's products is not necessarily proportionate to their wealth. Rich people are often very good at accumulating wealth and hesitant to spend it. However, if 93% of US wealth is in the hands of just 20% of the population it makes sense in many situations to target that, and there are serious diminishing returns about chasing that last 7% (especially when you consider that levels of DISPOSABLE income make the disparity even greater).

You may not like Apple's products, or some of the company's decisions, but that's not the point: I can assure you that many companies are working assiduously to try to emulate much of their business strategy. 4000% growth in 10 years doesn't go unnoticed.

RE: iPad Sales Decline
By retrospooty on 7/21/2010 3:42:13 PM , Rating: 2
wow, that was a whole lot of typing, cutting and slicing you put into that.

Yes, Apple makes plenty of money. I didn't say they didn't, and I don't dislike their products as you inferred. But 5% is 5% and it isn't increasing. The past several years it went from 3% to 5%, and that is about all Mac will ever get... Unless they come out with something far better, far cheaper, or at least open platform and compatible with the rest of the world. With the $$$ they are making, I doubt they ever will, and that is fine, nothing wrong with it. And you cannot just discount business PC's, because they are built, and paid for just like a home PC. They are used even more, generally 8+ hours a day every day M-F at a minimum.

What is even your point by all this? You feel that the true # of 5% of the worlds PC's are Mac needs explanation? So you eliminate business PC's, pirated PC's and then low end cheap PC's? That's like me saying, if I dont count all the college graduates, and poor people that may not have been able to afford to go to college, then I am one of the smartest 1% in the world. Pointless... What does that get you? 5% is still 5%, and that isn't a bad thing.

RE: iPad Sales Decline
By sebmel on 7/22/2010 8:08:09 PM , Rating: 1
"What is even your point by all this?"

I think it was your comment that Mac account for only 5% of computers worldwide. Considering the following comment:

"But 5% is 5% and it isn't increasing."

I think you are suggesting that the products lack marketplace significance. Perhaps you think developers will not be attracted to the platform.

So I suggested that Apple's customers have money to spend and explained how that has sustained a productive community in the past.

To cover the possibility that you were suggesting that the 5% sales figure suggests the company is failing I showed how it is profitable. Today Goldman Sachs pointed out that the iPhone alone makes more profit that Nokia, RIM, Sony Ericsson, HTC and Motorola COMBINED.

So the point is two-fold:
Apple's strategy is profitable
Apple's products are relevant to developers

As for Apple's portion of the market not growing: you contradicted yourself. Apple sold about 2% of the world's computers in 1997. Now it sells 5%... but it also sells the iPod Touch, iPhone and iPad. Those are relevant in certain circumstances: the browser, for example. Safari has to be targeted because you have to add about 25 million computers to about 50 million working iPhones and iPod Touches. And now you have to add over 3 million iPads.

Look at this graphic of Apple product sales separated over time:

It only goes to Q3 2010... but you see that all but the iPod numbers are growing. What it doesn't show is iPad sales booming. It does show Apple selling over 10 million Safari using products in a single quarter. It also shows that next quarter, Christmas, is the big one. So Apple is shifting over 40 million internet enabled devices a year.

And those are going to a market that has on average more money to spend than PC users.
Not irrelevant & immensely profitable.

As for my point about Microsoft: the 5% market share figure suggests Apple is irrelevant.

The reality is that the company is growing faster than Microsoft, makes less profit as a percentage of revenue but almost exactly the same revenue and is valued higher than Microsoft by the market because investors expect it to grow bigger than Microsoft.

That will probably happen in the next quarter. Apple will probably make more revenue, more profit and have a higher market cap than Microsoft after the Christmas quarter.

Microsoft will probably always make more profit as a percentage of sale price than Apple, because their product mix contains more software and services, as opposed to hardware, than Apple.

RE: iPad Sales Decline
By sebmel on 7/22/2010 8:10:42 PM , Rating: 1
Here's a page that shows growth of revenue: Apple vs Microsoft...

... both growing... Apple faster.

RE: iPad Sales Decline
By ralniv on 7/20/2010 11:06:34 PM , Rating: 2
Not sure where these marketshare #s are coming from. The last data I saw (June 2010), iPhone had a 28% slice of the smartphone market. It's nearly 10 percentage points higher than Windows Mobile and only 7 points below RIM's Blackberry OS. Apple (and Android) gained 2% points in 1Q2010, while Blackberry OS (and Windows Mobile) lost 2%.


RE: iPad Sales Decline
By Aloonatic on 7/21/2010 4:54:26 AM , Rating: 2
I wonder if many will start to appear on eBay and such as people realise that they are not really interested in owning a tablet as it's not the life changing "magical" device etc that the add said that it is.

Anyone know anyone that has got one? I only know one guy who has and raved about it at the start, but now doesn't seem to use it all that much. Admittedly, I'm saying that mostly because his Facebook updates seem to be posted mostly via the android phone again, that he is supplied with by his employer.

RE: iPad Sales Decline
By Tony Swash on 7/22/2010 11:13:06 AM , Rating: 2
This really made me laugh out loud!

You do realise that Apple are selling iPads as fast as they can make them?

Wishing for something is OK but claiming you have it when you don't is delusional. You may not like Apple or the iPad but claiming it is a failure or a fad means you will fail to notice or understand one of the phenomena that is profoundly changing the tech world.

Bring on the haters
By chrish89 on 7/20/2010 5:17:25 PM , Rating: 1
Tell us why Apple is doomed to fail

RE: Bring on the haters
By Gungel on 7/20/2010 5:25:26 PM , Rating: 2
What if Steve Jobs bytes the dust?

RE: Bring on the haters
By jhb116 on 7/20/2010 7:48:11 PM , Rating: 2
I don't think this will be as bad as everyone thinks it will. Jobs has done a great job surrounding himself with great marketing and engineers. If Jobs left - I think there is a chance the Apple "platform(s)" will start open up without gov't intervention. If that happens - I would actually start thinking about spending money on their products. With Jobs - they are way too much "1984'ish" for my taste.

For now - I'll stand on the sidelines - thanking Apple for pushing the other companies in their respective markets to be better.

RE: Bring on the haters
By retrospooty on 7/21/2010 8:31:22 AM , Rating: 3
"For now - I'll stand on the sidelines - thanking Apple for pushing the other companies in their respective markets to be better"

That is something that very few people seem to see. We all owe APple a thank you. Without the Mac alternative, PC market would be stagnant and more expensive, slower to innovate.

And especially true on smartphone's. The iphone wa a mediocre pone witha great UI, OS and screen. It really forced all other players to raise the bar. Now that they have, smartphones are far better for it.

By Hare on 7/21/2010 2:22:53 AM , Rating: 2
Q3? It's still July... Q2 results?

RE: Q3?
By IceBreakerG on 7/21/2010 8:29:38 AM , Rating: 2
Fiscal years are not always the same as calendar years. Many companies have their fiscal year end in the middle of the calendar year for financial purposes. Apple's fiscal year will end around September/October, then the new fiscal year will start. Different seasons for different companies affect the fiscal year differently. Some even try to have specific quarters start or end before a certain season too (Christmas season is a big one).

Good news....
By Daniel8uk on 7/20/10, Rating: 0
By Samus on 7/20/10, Rating: -1
RE: money
By MADAOO7 on 7/20/2010 5:06:48 PM , Rating: 5
It's a publicly traded company, profits have to be made public to shareholders, investors, etc.

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki