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Apple profits rise 15%, iPhone sales soar

When it comes to Apple, the thing most fresh in most peoples' minds have been Microsoft's "Laptop Hunter" ads. Microsoft's three ads took direct aim at Apple's "cool" but expensive laptops and compared them to Windows Vista-based laptops which offered similar specs for hundreds less.

Despite the back and forth that has been brewing on the internet with Microsoft's fresh attack on Apple, the boys from Cupertino have something else on their minds today: Q2 2009 results for the period ending March 29. Despite the downturn in the economy, Apple as a company managed to post revenue of $8.16 billion and profit of $1.21 billion which represented earnings of $1.33 per diluted share. Apple's results for the same period last year were $7.51 billion, 1.05 billion, and $1.16 respectively.

While Microsoft's Laptop Hunter ads came too late in the quarter to personally do any serious damage to Apple's momentum with Mac sales, it appears that the slowing economy and consumers' penchant for lower-priced netbooks was the motivating factor for the three percent slide in Mac sales to 2.22 million compared to a year ago.

On the other hand, iPod sales grew a modest three percent to 11.01 million units while iPhone sales were up a whopping 123 percent from a year ago to 3.79 million units.

"We are extremely pleased to report the best non-holiday quarter revenue and earnings in our history," said Apple CFO Peter Oppenheimer. "Apple’s financial condition remains very robust, with almost $29 billion in cash and marketable securities on our balance sheet. Looking ahead to the third fiscal quarter of 2009, we expect revenue in the range of about $7.7 billion to $7.9 billion and we expect diluted earnings per share in the range of about $.95 to $1.00."

Most Apple fans will now be looking forward to June when the company is expected to announce a new hardware revision of the iPhone and OS v3.0. The next generation iPhone hardware is expected to feature faster connectivity speeds, dual cameras, and support for stereo Bluetooth. The latest iPhone OS revision will bring much-needed support for MMS messaging, copy/paste, push notifications, and landscape email support.



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By ltcommanderdata on 4/22/2009 5:32:17 PM , Rating: 5
I guess with $29 billion in the bank, the speculation of Apple's demise from not targetting the low-end market and netbooks won't be coming true any time soon. It really shouldn't be necessary to be in the race to produce the cheapest laptop/netbook, when you can be just as profitable, if not more, by targetting the mid and high-end markets.

While reports have shown Apple losing overall market share due to netbook sales, I think it'd actually be interesting to see a market share break down by price range. It wouldn't really surprise me if Dell, ASUS, etc. are canabolizing their mid-range sales to gain raw unit sales in the low-end, which may well leave Apple with a larger market share in the more profitable mid-high end segment.




By Brandon Hill (blog) on 4/22/2009 5:34:56 PM , Rating: 3
All reports seem to suggest that Apple is gearing up for a netbook or tablet entry in the coming months. Last year it was just a gentle thumping, not it's a loud drumbeat of leaks and rumors.

I guess we'll just have to wait and see.


By Brandon Hill (blog) on 4/22/2009 5:39:58 PM , Rating: 3
As a followup:

http://i.gizmodo.com/5223490/apple-on-netbooks-if-...

Apple COO Tim Cook:

quote:
"If we find a way we can deliver an innovative product that really makes a contribution, then we'll do that. And we have some interesting ideas in this space."


RE: Apple's Needing to Target Low-End Exaggerated
By quiksilvr on 4/22/2009 10:13:17 PM , Rating: 3
But it is highly unlikely that they can release a netbook in the same price range. The smallest price I could POSSIBLY see Apple go is to $499, and that's pushing it.


RE: Apple's Needing to Target Low-End Exaggerated
By michael2k on 4/23/2009 12:31:08 AM , Rating: 1
They could always release an iPhone with an Atom CPU.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/23/2009 1:17:39 AM , Rating: 2
To get 5 minutes of battery life?


RE: Apple's Needing to Target Low-End Exaggerated
By quiksilvr on 4/23/2009 11:28:34 AM , Rating: 2
LOL. If they can cut the size of the Atom to a 32 nm chipset and underclock it like crazy, then you might even get an hour of battery life :O


By goku on 4/23/2009 12:49:42 PM , Rating: 2
It's the chipset, NOT THE PROCESSOR'S fault. The processor uses like between .5watts to 2 watts max. The chipset however uses like 6 watts and the I/O is like 3 watts, so while the processor uses relatively no power, the powersavings are wasted by the chipset it is bundled with.


By Pirks on 4/22/2009 5:49:13 PM , Rating: 1
quote:
Apple is gearing up for a netbook or tablet entry in the coming months
No need to worry about Apple's profits, they won't produce cheapo Acer style netbook, you can bet on it.


By Murloc on 4/23/2009 7:31:21 AM , Rating: 2
it won't be cheap imho.

It will maybe be a netbook, but by netbook I mean small and mobile, not that it doesn't cost too much.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
RE: Apple's Needing to Target Low-End Exaggerated
By fsardis on 4/22/09, Rating: -1
RE: Apple's Needing to Target Low-End Exaggerated
By Doormat on 4/22/2009 6:04:06 PM , Rating: 3
From the horses mouth:

http://www.apple.com/pr/library/2009/04/22results....

Apple’s financial condition remains very robust, with almost $29 billion in cash and marketable securities on our balance sheet

This is their cash, near cash and short term investment amount. This information is openly available in 10Q and 10K statements published every quarter and year, respectively.


By weskurtz0081 on 4/23/2009 8:46:43 AM , Rating: 1
Marketable securities is not "in the bank"..... good god man... come on!


By Pirks on 4/22/2009 6:24:02 PM , Rating: 1
quote:
prove that they have 29 billion from a statement from the company
Jeez you're dumb... anyway, Doormat has already taken care of you in his post above.
quote:
you are an idiot
At least I'm not as dumb as you, 'cause I'm not asking questions like "where are the company numbers?" RIGHT AFTER THE COMPANY SHOWED ALL THE NUMBERS! Sheesh.


RE: Apple's Needing to Target Low-End Exaggerated
By Doormat on 4/22/2009 6:00:26 PM , Rating: 3
$20.7B as of Dec 31, 2008.

http://www.microsoft.com/msft/earningsFY09/earn_re...

see the line Total cash, cash equivalents, and short-term investments


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By stromgald30 on 4/22/2009 6:33:24 PM , Rating: 2
http://www.microsoft.com/msft/earnings/FY09/earn_r...

20 billion in cash, cash-equivalents, and short-term investments.

Not sure what this really means other than the ability to start new projects/expand or buy out other companies. If you look closer, Microsoft has more long term assets, including 12 billion in goodwill, which just reflects the premiums paid when buying out other companies.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
RE: Apple's Needing to Target Low-End Exaggerated
By BBeltrami on 4/22/2009 6:53:51 PM , Rating: 3
You always have such thoughtful, intelligent contributions that add so much to the conversation. I'm really looking forward to the car analogy, again. I don't understand why you get rated down. DT readers are such tools, huh?


By DigitalFreak on 4/22/2009 9:17:52 PM , Rating: 4
The real reason Jobs had to have surgery was to remove Pirk's tongue from his ass.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By DigitalFreak on 4/22/2009 9:40:11 PM , Rating: 2
That's the best comeback you've got? Pathetic


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By inighthawki on 4/22/2009 10:07:42 PM , Rating: 2
firstly, it's 'well', not 'good'. plus he's not trolling that was just terrible


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By stromgald30 on 4/22/2009 7:01:33 PM , Rating: 4
Considering MSFT's net income is 4 times Apple's and their total assets are much higher, I don't think this means much at all. It's just an impressive figure that Apple's CFO was throwing around.

I remember back in 2002, MSFT kept close to 40 billion in cash and easily liquidated assets just for mergers and acquisitions. Having alot of cash lying around just means that a company is either about to do something expensive or is being poorly managed.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By stromgald30 on 4/22/2009 7:21:51 PM , Rating: 4
Lol. Maybe you should go back to school and brush up on those reading comprehension skills.

I said that a company with a lot of cash is probably about to do something expensive OR is being poorly managed. Why don't you look into all the acquisitions Microsoft did in 2000-2003: http://en.wikipedia.org/wiki/List_of_companies_acq... . They had their third largest acquisition ever in that year.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By stromgald30 on 4/22/2009 7:42:24 PM , Rating: 2
Lol, its funny how short sighted you're being.

There are a lot of other acquisitions there without the cost listed. In addition, some cash needs to be kept in reserve and some needs to be kept just in case a new, good deal comes along. My point is that Microsoft had a ton of cash, and they were using it for some large acquisitions.

Apple has more cash/liquid assets now than it has in years, possibly ever. So if it sits there, its poor business. I doubt it'll sit there for long. More likley Apple will try to do something big, maybe a buy out, a new project/product launch, new facilities, etc. Or, next quarter, they might simply have invested the money into more long-term assets.

Also, Navision wasn't a 1.3B company. Microsoft paid 1.3B for it, there's a big difference there.


By StevoLincolnite on 4/22/2009 11:36:58 PM , Rating: 2
Having cash on hand allows a company to fall on it in tough times, When the Xbox was originally conceived Microsoft lost Billions, which has now been made up for. (I think.).

Also worthy to mention is that both Microsoft and Apple have more income than some countries governments around the world, even more cash on hand.

Having allot of cash on hand also allows for aggressive advertising, and acquisitions as well as product launches where they might need to cover warranty and pay for other things.


By xRyanCat on 4/23/2009 9:04:28 PM , Rating: 2
Microsoft hasn't recuperated their losses on the original Xbox, but the Xbox 360 division did see profit a few quarters ago.


By weskurtz0081 on 4/23/2009 8:45:48 AM , Rating: 1
Hmmm.... it seems you have quoted incorrect information.

Apple does not have $28 Billion in the bank, depending on your definition of "the bank". It's more like they have around $7 Billion in the bank. Pirks, I thought you of all people would know that!


By weskurtz0081 on 4/23/2009 9:06:49 AM , Rating: 2
Sorry, I also looked at the wrong information (See Dec 2008). As of the LATEST quarter, Apples cash on hand (see: in the bank) is about $4.5 Billion.... not $7 Billion, or $28 Billion.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/23/2009 2:40:34 PM , Rating: 1
So what if MS doesn't have even that?


By stromgald30 on 4/23/2009 4:24:41 PM , Rating: 2
Um, Microsoft has $8 billion in cash and cash equivalents.

Look at the numbers before posting, please.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/23/09, Rating: 0
By weskurtz0081 on 4/23/2009 9:36:24 PM , Rating: 2
I am really curious if you have even looked at the latest financial reports.... or are you just repeating incorrect information that you are seeing other people post?


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/24/2009 3:22:12 AM , Rating: 2
Are the official Apple's and MS's financial reports incorrect?


By weskurtz0081 on 4/24/2009 7:45:55 AM , Rating: 2
I never said THEY were, I said what you are quoting.... and where ever you got that info from, is incorrect.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/24/2009 3:58:19 PM , Rating: 2
So you're saying the official Apple and MS info is incorrect? I've got it from the official MS and Apple web pages, see links above.


By weskurtz0081 on 4/24/2009 4:16:41 PM , Rating: 2
I have them too! Here, I will post the links and the data for those of you (not naming names) in the cheap seats!

Cash/Equivalents
MSFT: $7.285B
APPL: $4.466B

S.T. Securities
MSFT: $18.055B
APPL: $20.547B

Total Current Cash/Equivalents etc:
MSFT: $25.34B
APPL: $25.013B

Now.... lets go ahead and skip to TOTAL assets!

MSFT: $68.853B
APPL: $43.237B

http://www.microsoft.com/msft/aspx/secfilings.aspx
https://www.apple.com/investor/

I think that is pretty self explanatory isn't it?


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/24/2009 5:19:11 PM , Rating: 2
http://www.apple.com/pr/library/2009/04/22results....

"$29 billion in cash and marketable securities on our balance sheet"


By weskurtz0081 on 4/24/2009 5:48:36 PM , Rating: 2
Oh.... I see. You are quoting what someone else says.... and NOT what the balance sheet says! Nice.........

So, have you even looked at the balance sheets? Do you know how to read them?

Ok... since you are taking the word of an Apple shill... and don't seem to understand financial statements, I will break it down for you.

The number, which is actually $28.878 Billion is Current assets PLUS long term securities.

Typically, long term securities are not listed the way Apple listed them because it is hard to determine the value of a long term investment... hence it should not be counted as CASH. What Apple did is bolster the balance sheet by listing it as a CURRENT asset, which it is typically not listed as.

So, why don't you go take a look at the official balance sheets of both companies, rather than take the word of an Apple mouthpiece, and try to understand and learn what all of that means. ;)


By weskurtz0081 on 4/24/2009 7:47:24 AM , Rating: 2
Do I REALLY need to pull the data off of each of the companies Q2 10Qs?


By weskurtz0081 on 4/23/2009 5:22:01 PM , Rating: 2
I don't really care what either has or doesn't have.... I was just stating that you guys were using false information.


By ImSpartacus on 4/22/2009 5:43:29 PM , Rating: 2
Yeah, Apple really makes a good product on the high end. I don't think Apple wants to make a netbook. If they did, I don't think it would be very Apple-y.

However the market needs the netbook. It's the perfect product for this economy. Granted, it cannibalizes more profitable sales, but it is still a sale. Frankly I don't think that companies can get picky right now.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/2009 5:55:34 PM , Rating: 1
quote:
I don't think Apple wants to make a netbook
A $600 netbook? Why not?


By stromgald30 on 4/22/2009 6:47:01 PM , Rating: 5
Probably closer to $800. Apple has to be careful that it doesn't cannibalize revenue from their other laptops like what's happening to other laptop manufacturers. I doubt they'd survive if they made it possible to get in the 'I'm a Mac user and I'm better than you' club for only $400.

Apple just doesn't make good low-end products because of their price premiums. Seriously, look at how the first and second generation iMacs turned out. The Mac Mini was a decent stab at it, but hasn't been updated much.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
By stromgald30 on 4/22/2009 7:05:23 PM , Rating: 2
I know. I said $400 because that's about as much as I would pay for a moderate to high-end netbook.


RE: Apple's Needing to Target Low-End Exaggerated
By Doormat on 4/22/2009 7:15:21 PM , Rating: 2
Because Apple wants to keep up its 30% margins?

Without some awesome killer app, Apple shouldn't enter the netbook market. If they can pull off the tablet, running either on a Atom or consumer LV CPU (1.2/1.4Ghz) and make it a great user experience then they should.

I don't think Apple would get a whole lot of sales if they just took a $400 netbook and marked it up to $600 and put OSX on it. It would run well (I have OSX on a Dell Mini 9 with 2GB it runs just fine), but consider the audience of the netbook: those who cant (or dont want to pay for) a more expensive laptop, or those who need a compact laptop for travel.


RE: Apple's Needing to Target Low-End Exaggerated
By Pirks on 4/22/09, Rating: -1
RE: Apple's Needing to Target Low-End Exaggerated
By Doormat on 4/22/2009 8:35:14 PM , Rating: 2
quote:
Why do you think $600 netbook is impossible to do with the same 30% margins?

Read the second part of my post - only the Apple fans will buy it. It'll end up being another AppleTV.

quote:
Well, if that netbook is a tablet with ARM CPU and because of that has, say, 10 hours of life on a single charge plus all the iPhone OS goodness plus some more... maybe it'd be enough to justify $600?

Like I said - Apple would need a novel approach that either Dell/HP cant replicate or a niche they wont address. 10 hour battery life? Thats something people will pay for. But they cant just take the standard netbook guts and style it in a Apple laptop case, and put it out there.


RE: Apple's Needing to Target Low-End Exaggerated
By taber on 4/22/2009 11:50:24 PM , Rating: 2
quote:
Why do you think $600 netbook is impossible to do with the same 30% margins?


Because of the fact that the cheapest computer they make is a mac mini that costs $600. I think that might actually use a laptop CPU, but it's missing a touchscreen and battery for costs. I don't know what the total is, but the iphone costs much more than $200 when contract cost payments that flow back to Apple are considered.

Apple might come out with some interesting niche tablet product, but I don't think it'll be $600.


By Hacp on 4/23/2009 12:01:36 AM , Rating: 2
Actually, I think many people will be willing to buy a 600 dollar netbook. Why? Cause its the cheapest OSX machine. I'm also pretty sure Apple will make quite a margin on the netbook. Heck, it can have a 12.1 inch screen and a cd player and apple could still probably make 30-40%. Look at the Dell Mini 9. It has all the essential netbook internals, and its being sold for 200 bucks!


By Lightnix on 4/23/2009 7:44:08 AM , Rating: 2
It'd be pretty neat if they could address a similar price segment to normal netbooks, but reduce costs and increase battery life by using a powerful ARM CPU like the Qualcomm Snapdragon 45nm part (1.5GHz dual core). It'd be my first Apple product if they managed that.


By invidious on 4/23/2009 10:32:30 AM , Rating: 2
The only market apple makes money in when it comes to laptops is the uneducated with money to burn and people to impress market.

I dont care how much PC's manufacturers focus on netbooks, PC mid and high range laptops blow apple out of the water in both functionality and price point. Dont think for a second that Apple can move in on those markets without changing their pricing scheme.


“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads














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