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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 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
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
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.

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
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.

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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