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Apple CEO Steve P. Jobs holding the elusive white iPhone 4  (Source: The Star)
Company continues to put analyst estimates to shame

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 transplant).

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 earnings trickled 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 20.3 million.  

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.



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RE: Nice
By Tony Swash on 1/19/2011 6:23:15 AM , Rating: 0
quote:
How many hours of your life have you spent talking up Apple on tech sites?

Ballpark.


Not enough - but then I have lots of spare time because I invested in Apple shares in my pension fund and retired a couple of years back at the age of 57. Now life is sweet :)

Here is a another nice snippet (thanks to Daring Fireball)

Back on April 2 2010, on Fox News’s Strategy Room, host Clayton Morris asked how many iPads Apple would sell in 2010. This was one day before the Wi-Fi version went on sale. The answers from his guests:

Jason Snell: 3 million
Andy Ihnatko: 3 million
John Gruber: 8 million
Mike Rose: 4.5-5 million
Ross Rubin: 5 million
Natali Del Conte: 5 million
Clayton Morris: 9 million

The actual answer: 14.8 million.

Of course the comfort meme around here is that once Android tablets hit the market Apple will face some "real competition" and iPad sales will stop growing, maybe even decline.

An alternative view was voiced by Apple COO Tim Cook during the company's fiscal Q1 2011 results call where he expressed criticism not just for existing tablets from rivals but future ones as well. He said:

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.


Anybody care to offer a prediction for total iPad sales for the coming year?


RE: Nice
By jamesjwb on 1/19/2011 6:45:49 AM , Rating: 2
12


RE: Nice
By Skywalker123 on 1/19/11, Rating: 0
RE: Nice
By eskimospy on 1/20/2011 12:21:16 PM , Rating: 2
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.


RE: Nice
By Tony Swash on 1/20/2011 1:19:37 PM , Rating: 2
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.


Relax. I am fine.

Posting here takes hardly any time and the rest of my life is full - too full at times to be honest - how did I ever find the time to work for a living?. I even managed to post here whilst spending seven weeks last summer driving around the National Parks of of the American west (seriously beautiful country). I used to churn out reports and project briefs and memos by the hundreds. Now I write about what I want to when I want to. The stuff here is tiny proportion of that. If you really want to engage get me going on the subject of climate change alarmism - I got so worked up about that that I set up my own web site to publish stuff on, it's here if you remotely interested:

http://a-sceptical-mind.com/

and then there is my photography obsession.........

A little bit of combative discourse is good for the soul ;)


RE: Nice
By eskimospy on 1/20/2011 5:49:16 PM , Rating: 2
That you're a climate change denier explains a lot. You seem to be attracted to faith based movements. :)

Seriously though, if you're churning out this much crap here and then hosting a whole new site to churn out even more inane crap, you're wasting an awful lot of your life. I wouldn't wish that on anyone. Do us both a favor and spend less time regurgitating Apple press releases, more time out in the real world.


RE: Nice
By Tony Swash on 1/20/2011 5:56:57 PM , Rating: 2
quote:
That you're a climate change denier explains a lot. You seem to be attracted to faith based movements. :)


I think those that accept the theory of catastrophic AGW are the ones who are faith based. I had no opinions on the matter but decided to investigate out of curiosity. The evidence I found led me to be sceptical about the AGW hypothesis. I decided to put some of that evidence on my web site. As it says on the web site - if the evidence changes I will change my mind. If you think I have come to the wrong conclusion feel free to tell what bits of the evidence I have found that I have misunderstood or what what evidence I have missed. Using words like "denier" is way to avoid rational discourse. Its better to be rational.


RE: Nice
By eskimospy on 1/20/2011 11:41:57 PM , Rating: 2
It certainly is better to be rational. Physician, heal thyself.


RE: Nice
By Tony Swash on 1/21/2011 7:32:01 AM , Rating: 2
quote:
It certainly is better to be rational. Physician, heal thyself.


So no comments about the actual evidence. Telling.


RE: Nice
By Pirks on 1/21/2011 10:26:02 AM , Rating: 1
Yeah pwn them well Tony, hurt those nasty AGW trolls like eskimospy. Those idiots are so annoying. I'm glad you're on the masher's side when it came to serious business (too bad you don't know who masher is but local old timers will get it)

And also you might want to answer my post here in the process: http://www.dailytech.com/article.aspx?newsid=20684...

Wanna know your opinion about it, thanks


RE: Nice
By eskimospy on 1/21/2011 12:34:15 PM , Rating: 2
Uhmm, the whole reason why I wouldn't discuss the evidence with you is contained in my prior post, in case you missed it. I don't believe you to be capable of rational assessment of evidence.


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein

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