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Apple continues its upwards march in the consumer electronics business

It's should come as no surprise that Apple's latest earnings announcement once again exceeded all expectations. Apple has been on a roll quarter after quarter, and its Q2 earnings were no exception. 

The company today announced record fiscal Q2 revenue of $24.67 billion USD and a net profit of $5.99 billion USD. Those numbers are far ahead of Q2 2010 when Apple reported revenue of $13.5 billion USD and net profit of $3.07 billion USD. 

Apple witnessed a 28 percent year-over-year growth in Mac sales to 3.76 million units while iPhone sales grew 113 percent to 18.65 million units during the quarter. Apple's newest booming business sector, the iPad, had sales of 4.69 million units. 

If there was a lone cloud in Apple's sunny report, it was the fact that iPod sales were down 17 percent to 9.02 million units compared to last year.

“With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders,” said Apple CEO Steve Jobs. “We will continue to innovate on all fronts throughout the remainder of the year.”

Apple's iPhone numbers were no doubt helped by the addition of Verizon as the second carrier in the United States, and Apple's new iPad 2 was launched during the fiscal second quarter.

Apple is rumored to be readying a revamp of its popular iMac family and the next generation iPhone is set to make its debut in September.



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RE: I LOVE IT!
By SkullOne on 4/20/2011 7:56:39 PM , Rating: 0
I don't understand why people say stupid crap like this. I hate Apple with a passion. The iPhone 3G I had was a total piece of crap. However, competition is good. I just want people to stop treating Apple and their Lord and Master Jobs like the second coming of Christ.

Plus if I could afford their horribly overpriced stock (Google is the same) I'd buy up a ton because Apple is a big money maker and nobody can deny that.


RE: I LOVE IT!
By iluvdeal on 4/20/2011 10:32:35 PM , Rating: 4
I don't understand people like you. Why hate a company who is one of the few who operate off their own vision? What makes me sick is seeing all those companies who either cannot or will not release anything different because they are afraid of failing or because they have no vision, they just produce more of the same or copy the risk takers after it proves successful. Which type of company do you want to support?

Don't forget, the iPad was not a guaranteed success. Many experts predicted it would fail, it's another Newton they said. A tablet has never been successful, this is a mistake by Apple. Those experts were saying Apple should release a netbook instead, a popular device at the moment. Now who had the vision to see ahead and who could only see what was in front of them? Now of course every company and their mom is releasing a tablet. Why? They only see what's in front of them and Apple just sold a bunch of iPads, now let's jump in. Now where do you think the next cool product everyone wants and other companies will copy will come from? That company you hate with a passion or that company who only copies what's currently successful?

BTW I've made the investing mistake you are making now. If I told you a few years ago you could buy 10 shares of AAPL at $250 or 100 shares of Microsoft at $25, deciding based off the number of shares would have lost you money. Buy companies based on the anticipated growth of their earnings and don't worry about the stock price. Even if you buy fewer shares, if that company is growing faster than companies with a cheaper stock prices but slower earnings growth, you're better off with the faster growing company. I remember people thinking GOOG was "expensive" from day 1 when it was around $100, I was one of those people, now look at it.


RE: I LOVE IT!
By Solandri on 4/20/2011 11:37:52 PM , Rating: 1
quote:
I don't understand people like you. Why hate a company who is one of the few who operate off their own vision?

I think the hatred is because much of their success is based on marketing, rather than a sound cost-effective product.
quote:
BTW I've made the investing mistake you are making now. If I told you a few years ago you could buy 10 shares of AAPL at $250 or 100 shares of Microsoft at $25, deciding based off the number of shares would have lost you money.

Hah, I have that beat. I almost dropped about $10k into AAPL when it was at $18 a share around 2003-2004. I heard on the radio that AAPL had dropped to $20, and I thought "isn't that lower than their IPO price?" I looked it up and sure enough it was.

So figuring it might be worth buying, I did some research on Apple. They'd just had Steve Jobs return to the helm. He seemed to be obsessed with the color of the plastic on the monitors of the iMac. He'd also burned all their bridges with the hardware manufacturers who were making Mac hardware clones. And perhaps most damning they'd just released an MP3 player called an iPod which was bigger, had fewer features, and cost more than Creative's MP3 player. It didn't even have an FM radio for crying out loud.

That was enough for me, and I ran far, far away. Yeah, that worked out real well for me. ;) On paper, the technical specs for their products just aren't cost-competitive. But I learned that the intangibles - user interface, look and feel, user experience, and marketing - can more than make up for it.


RE: I LOVE IT!
By tim851 on 4/21/2011 4:03:06 AM , Rating: 2
Wow, there are so many holes in your story.

Between 2000 and 2004 Apple's stocks didn't reach 18$, nevertheless drop to it. The only time Apple's stock ever dropped in that range was in the summer of 2000.

Steve Jobs came back to the helm in 1997. That was the time he burned the bridges with the clone makers.

In 2002 Apple introduced the all-white iMac G4, a year before came the all-white iBooks. No colory plastic anymore.
The iPod was released in 2001.

The only thing about your story that seems to fit is that you didn't get rich on Apple stocks...


RE: I LOVE IT!
By robinthakur on 4/21/2011 7:17:51 AM , Rating: 2
quote:
I think the hatred is because much of their success is based on marketing, rather than a sound cost-effective product.


No, they just understand how to market their products to their target audience (the majority) and the rest of the manufacturers tend to market mainly to people that already know what the product is (the minority) It#'s not hard to see why they are successful.

In terms of being "sound" and "cost effective" these terms are vague and mean different things to different people. Initial cost is high, but total cost of ownership, useful life, build quality and product support are intangibles not always apparent in the initial cost.

Some would argue that in that sense, Apple products are actually cost effective because they hold their value far more than competing products which are worth virtually nothing once the product line is refreshed the next year (if its that long)

For example, the resale value of my iPhone 4, which I purchased on launch almost a year ago is still roughly £480. The Samsung Galaxy S by comparison is now worth as low as £180, so has depreciated more. Obviously this will change once the iPhone 4 is not the latest and greatest model, but you get the point.


RE: I LOVE IT!
By The Raven on 4/21/2011 11:41:05 AM , Rating: 2
quote:
Some would argue that in that sense, Apple products are actually cost effective because they hold their value far more than competing products which are worth virtually nothing once the product line is refreshed the next year (if its that long) For example, the resale value of my iPhone 4, which I purchased on launch almost a year ago is still roughly £480. The Samsung Galaxy S by comparison is now worth as low as £180, so has depreciated more. Obviously this will change once the iPhone 4 is not the latest and greatest model, but you get the point.

Couple things…
1) I'm not sure I believe your resale number there (at least if it was in the US) since someone could get a new improved iPhone for the same price as that. That certainly is the case with the iPhone 1. You would be stupid to by one of those used since you can buy a new one at Walmart for $50 (w/ contract)... so resale value? Really? We are talking ‘disposable’ electronics here that the naïve people out there upgrade every 2 years. Wait until that 2 year mark hits and watch the alleged resale price of yours drop like a rock. You compare something that has MANY comparable models released throughout the year and something that is only released when Jobs says so and you are comparing the price of the two. That doesn’t make sense. Again you would have to wait 2 years after the iPhone 4 release date where a) owners are out of contract and b) there is another iPhone on the market. Then the resale price of the 2 would be somewhat comparable. But still not even since there would only be the choice of a handful of iPhones vs. all the Samsungs, HTCs, etc.

And since you think that Apple is successful because they market to the technologically naïve (majority) then they will stick to the more scarce iPhones out there. Especially since they are shiny!
quote:
they just understand how to market their products to their target audience (the majority )

Since the majority doesn't follow tech trends... What does this have to do with technological advances? That is his point. That they make this money because they "fool" people to buy inferior/overpriced products (also like MS and Windows). (I put the quotes around 'fool' because these people know what they are getting when they buy it, so Apple is not doing anything ethically wrong.) As you said in so many words, many of these iPhone buyers are the naive majority unlike you or I. So the higher I see Apple stock climb and sales increase, the lower my expectation are of the future since it is the uninformed majority that are making the decisions that influence the rest of us greatly. Just like in politics lol.

So no, I don't see why anyone would be thrilled about this unless they owned stock. They are not tech leaders in the industry, they are business leaders in the industry. Hopefully they will turn into a tech leader, but when it is better to make money, why would they. Again, I'm not judging Apple, just this reaction to the news. I respect their place in the market just not the lemming mindset that fuels their growth.


RE: I LOVE IT!
By KoolAidMan1 on 4/21/2011 2:29:00 AM , Rating: 2
Excellent post


RE: I LOVE IT!
By SkullOne on 4/21/2011 7:51:00 AM , Rating: 1
Well I'm not investing in Apple. I can't afford it. However, Apple continues to grow. I would not be surprised if they can actually hit $500 like some people are predicting. That would make buying their stock worth it.

There's also a difference between hating a company and wanting it to flounder and go out of business. I want Apple to continue causing innovation and competition.

I hate Apple's marketing which is full of lies and deceit. I hate Jobs' "holier than thou" attitude. The whole "you're holding it wrong" and "others did it first but we did it right" crap is vomit inducing. If Lord and Master Jobs truly "knows what users want" why did it take them 3 years to add copy/paste? That's why I hate Apple. It's all about the attitude, not what they make.


"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il














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