Another quarter has rolled around, so did a
bullish Apple embarrass the Wall Street analysts yet again? Such an event
has seemingly been a quarterly tradition by now. But this quarter's
earnings reports, while sticking true to tradition in revenue and several other
areas, actually fell short of analyst's typically overly conservative
expectations in two areas.
This quarter's earnings will likely be
over-scrutinized in the face of much bigger questions facing the trendy gadget
maker. While there'd been a bit of optimism surround the upcoming
iPad 2 and availability of
a CDMA (3G) iPhone on Verizon, most Apple-related financial chatter over
the past two days had centered around the company's CEO, co-founder, and
creative guiding hand, Steven P. Jobs taking
a medical leave of absence (the CEO has battled cancer over the last
decade and is recovering currently from a liver
A strong earnings report wouldn't completely silence
concerns about a possible future Apple leadership crisis, but it
might offer a decent distraction.
Apple's official accounting of calendar Q4 2010
in at around 4:30 p.m. on January 18.
Revenue was $26.74B USD, a new record, grossly
surpassing the consensus expectation of $24.4B USD and the "high"
expectation of $25.5B USD. Earnings per share (EPS) similarly whipped
expectations to the tune of $6.43 USD, versus a consensus estimate of $5.38,
and a "high" estimate of $6.02.
IPhone and iPad shipments beat expectations,
recording 16.24 million and 7.33 million, respectively, units shipped, versus
respective expectations of 15.5 million and 6.2 million.
If there was one trouble spot in the earnings
report, it was the shipments of Mac computers and iPods, which fell short of
expectations. Apple only shipped 4.1 million Macs vs. a consensus of 4.3
million, and only shipped 19.45 million iPods vs. a consensus expectation of
The iPod shortfall is perhaps expected -- sales of
the portable music player have slumped as tablets
and smartphones have boomed, filling many of the niches once filled by the
portable music player. The lower than expected Mac shipments are a bit
more troublesome and a sign perhaps that Apple is slowing in its quest to gain
ground on industry leaders Dell and HP. The Mac shipments, while lower
than expected, represented a 23 percent increase from shipments a year ago.
The iPod shipments, on the other hand, represented a 7 percent drop.
Despite the couple of weak metrics, the record
revenue, strong iPad/iPhone sales, and higher than expected revenue/EPS
guidance for Q1 2011 all culminated to a generally positive reception of the
report. While it is early to fully characterize the net impact, Apple
stock in resumed after hours trading has swung upwards $7.23 USD/share, a 2.12
percent gain that almost erases a 2.25 percent Tuesday drop, which was driven by
the aforementioned leadership concerns.
Apple CEO Steve Jobs, put in a good word,
enthusing, "We had a phenomenal holiday quarter with record Mac, iPhone
and iPad sales. We are firing on all cylinders and we’ve got some exciting
things in the pipeline for this year including iPhone 4 on Verizon which
customers can’t wait to get their hands on."Note: We originally overstated the revenue as $27B USD. It is actually slightly lower ($26.74B USD). Some have questioned the analyst consensus surrounding Macs. We have consulted several different publications, and the figure 4.3 million is consistent across them and appears correct. Apple also fell short of its own Mac sales predictions.
quote: My equivelent apple product to my pc. It has to have a hexacore chip 8gigs of ddr3 2000 crossfired 6870's and a 120g sandforce controlled ssd boot program drive and a 3gig raid array. Needs to be able to seemlessly integrate with my 2xbox360's so I can wirelessly stream all audio and hd video content stored on pc to both HD tv's. Has to be able to run my companies vpn client as well. Im waiting......
quote: FYI the consensus was 4.3 million, not 4. Its been reported many times that this was the figure most people agreed with before the earning call. They certainly missed it, and the wall street is going to notice.
quote: That said, the fact that you are calling the guys down at Wall Street utterly irrelevant just shows that you don't know what you are talking about. Apples stock was valued based on those expectations, and it will most likely have a negative impact, just as the same people undervalued their total revenues which will most likely have a positive impact.
quote: Professional analysts’ first year iPad unit forecasts in millions (sourced from TMO Finance Board)Brian Marshall, Broadpoint AmTech 7.0David Bailey, Goldman Sachs 6.2Kathryn Huberty, Morgan Stanley 6.0Shaw Wu, Kauffman Bros. 5.0Mike Abramsky, RBC Capital Markets 5.0Gene Munster, Piper Jaffray 3.5Ben Reitzes, Barclays Capital 2.9Keith Bachman, BMO Capital 2.5Jeff Fidacaro, Susquehanna 2.1Chris Whitmore, Deutsche Bank 2.0Scott Craig, Merrill Lynch 1.2Peter Misek, Canaccord Adams 1.2Doug Reid, Thomas Weisel 1.1Yair Reiner, Oppenheimer 1.1Here are the predictions from Tech Bloggers:Clayton Morris: 9John Gruber: 8Horace Dediu: 6Natali Del Conte: 5Ross Rubin: 5Mike Rose: 4.5-5Jason Snell: 3Andy Ihnatko: 3Apple sold 14.8 million iPads in 2010.I sometimes use the phrase “unforeseeable growth” to describe the kind of growth that not even the most knowledgeable observers of a market can predict. It’s usually an indicator that fundamentally transformational change is taking place.It’s not a sufficient condition, but it’s clear that “nobody saw it coming” is a common refrain when disruptions are seen in the rear-view mirror.If analysts, to a man, fail, you can be sure that competitors are no wiser. This collective shrug amounts to the greatest competitive advantage any entrant could ever hope to obtain.
quote: people trying desperately - desperately - to find some way to talk down Apple's fanatics
quote: so many people seem to really, really like Apple products
quote: I thought the main reason for keeping Macs and OS X was as an iOS software development platform. Everything else can be done on a Windows PC.
quote: Between the Mac and the iPad the slow haemorrhage of Microsoft is well underway
quote: The main blood loss is with the OEMs who are all jumping ship.
quote: Macs are still a tiny tiny tiny portion of a personal computer market
quote: Apple dies with Steve Jobs. I know you know it and so does the Market.
quote: What would rather do, dominate yesterday's business model or tomorrows? Sell into shrinking markets or growing markets?
quote: Cling onto the past. It's all you have.
quote: How many hours of your life have you spent talking up Apple on tech sites?Ballpark.
quote: With the variety shipping today, the OS wasn’t designed for a tablet; but Google said this. So you wind up having the size of a tablet that’s less than reasonable, or one that's not even a real tablet experience. It's a scaled-up smartphone; that's a bizarre product in our view. Those are what is shipping today. If you do a side-by-side with an iPad, some enormous percentage [is] going to pick the iPad. We have no concern there.Android 3 tablets - There’s nothing shipping yet, and they lack performance specs and pricing. Today they’re vapor. However, we’re not sitting still. We have a huge first-mover advantage. And a huge user advantage from iTunes to the App Store. Huge number of apps and an ecosystem. We’re very confident entering into a fight with anyone.Windows tablets fairly big, heavy and expensive" with weak battery life. They also need to have a keyboard or a stylus for input and were largely irrelevant in the market. From our point of view and what we've seen, people just aren't interested in them.
quote: Wait, so you're not even doing this while screwing off at work, or otherwise involuntarily unemployed with nothing better to do? Like, you are retired and could do anything you want with your life... and you choose to spend countless hours fighting with internet nerds over how great Apple is?That's so much more pathetic than I could even have imagined. Seriously, you are depressing me.
quote: That you're a climate change denier explains a lot. You seem to be attracted to faith based movements. :)
quote: It certainly is better to be rational. Physician, heal thyself.
quote: Record 851,000 Macs sold, up 24%. About half were to customers new to Mac.
quote: quote:Record 851,000 Macs sold, up 24%. About half were to customers new to Mac."Nobody ever went broke underestimating the intelligence of the American public." H.L. Mencken
quote: The first principle is that you must not fool yourself—and you are the easiest person to fool.... After you’ve not fooled yourself, it’s easy not to fool other scientists. You just have to be honest in a conventional way after that.Richard Feynman:
quote: 400,000 new customers in a year? That probably includes schools that are practically given the computers (yea learn on a Mac and then never see one again brilliant). I dont really see that as very impressive. Apple tv is a joke (funnier than google tv). Ipad and iphone are it for apple. Good products still growing no doubt. Mac market share is flat at best. They are now for the first time facing stiff phone competition and will face heavy tablet competiton this year. The honeymoon is over and now Jobs is sick again? Yeah things looking better than ever for Apple.
quote: MS has the best quarter ever, with stuff like Xbox business growing record breaking 38% and outselling everyone in the US for more than four months, and is now producing the most widely used software in the world. There really is only one conclusion you can come to - MS is doomed!Sheesh
quote: Microsoft's main problem is that the products which prop up the whole of it's business, products that supply the vast bulk of it's profit, are all 25 years old
quote: So I don't think Microsoft is doomed but I do think it will get smaller in relation to the tech market over the coming years
quote: The iOS has twice the number of games as the following platforms combined: NES+Master System+Genesis+SNES+PS1+Saturn+Xbox+PS2+Gamecube+Xb ox 360+PS3+Wii+XNA+XBLA+Gameboy+GBA+DS+PSP