Apple 4Q Profit Jumps 47% On Higher Mac, IPhone Sales

http://online.wsj.com/article/BT-CO-20091019-712705.html

by sant0sk1 • 17 years ago

89 45 17 years ago

online.wsj.com

stcredzero4• 17 years ago

Time for them to come out with the next big thing, before they become the captives of their own success. (Has that happened to Google? Definitely happened to Yahoo.)

pieter• 17 years ago

Their iPhone is their current 'next big thing', with iPod sales declining, the iPhone is what is keeping their profits up.

unalone• 17 years ago

The curious thing is that the only reason iPod classic sales are declining is because Apple beat its own product with the iPhone and iPod touch. They're their own best competition.

joez2• 17 years ago

I'm not sure if I can agree 100% with this statement. While Apple is long touted as a company built on innovation, they can probably extract profits without any new innovations for a while. (A while being 2-3 years, doesn't mean to stop trying though.) And it's true that iPod sales decreased 8% over last year's Q3, they expected this because of increasing iPhone sales.

I believe while other hardware companies are racing to the bottom in prices, Apple is able to extract premium on its hardware and this is really reflected in the gross margin and bottom line.

Could Apple produce a 600$ laptop? Sure. But it is not worth the temporary gains they'd see. A low end line would cannibalize the margins of their other computers. The quality would probably suffer and it would hurt their brand equity. Apple could introduce an economy line of computers and take over way more of the market, probably grow their sales by 25-40% in a year. To me, that is a strong statement... in that they could but they don't.

I think one thing that Apple will have to contend with is the image. As iPhone's and Macbooks become more and more mainstream, the elitism behind it is decreasing. They will need to do some kind of segmentation (and price discrimination). I wouldn't be surprised if they came out with a higher end Pro series priced around 2500.

Full disclose, I do own a few shares of AAPL. So I believe the future is bright for Apple.

stcredzero4• 17 years ago

I also believe the future could be bright for Apple. Even if they've peaked, or soon will peak, they'll be profitable for a good, long time. That's not my point. My point is that they can keep on the upward side of the peak by coming out with another game changer.

I fully expect them to.

As iPhone's and Macbooks become more and more mainstream, the elitism behind it is decreasing. They will need to do some kind of segmentation (and price discrimination).

Elitism is easy to maintain. Just make the packaging fancy and charge lots of money! The ability to charge a premium also enables innovation, however. You can charge more for your new, different thing, and if it's truly different then it probably does cost more since economies of scale aren't fully in play. Also your new thing can be truly new and different -- this enhances the caché and lets you tap into status-seeking early adopters.

Apple seems to be in the space where Mercedes used to be -- able to charge a premium for well engineered and truly (though conservatively) innovative high-quality products. The danger is in too much power in the marketing arm. If the company succumbs to the temptation to sacrifice quality and innovation for better marketing, then it is done for. If that happens, Apple will become a vacuous status symbol, and the real engineering innovation will come from someone else. A clear and present danger! (Many would say it has already happened.)

tjogin2• 17 years ago

It's never been about elitism for Apple, that's just the way the people who don't buy Apple perceive it.

Apple has used a slogan like the following for several of their products: "X for the rest of us", where X is some product or service that they deemed were previously too difficult to use. That's not elitism, it's the opposite of it.

The elitism charge doesn't really vibe with the other general charges that Apple products are toys, either, nor that their users are stupid and need dumbed-down devices.

brianobush• 17 years ago

I think the next big thing will be when the iphone is not locked into AT&T only. The growth will surely accelerate when it is more easily available.

whatusername2• 17 years ago

I'd be quite interested to see what the International breakdown of those 7 million iPhones are. Because the iPhone is available on a lot more than 1 carrier. (And it is available for the other 5.7 billion people in the world.

wmeredith2• 17 years ago

I concur. That's what I'm waiting for.

phil• 17 years ago

It's too soon: we've just begun year 3 of a roughly 5 year cycle.

tsally• 17 years ago

Ugh, this morning I almost put some capital in Apple stock. Now it's up 12% in after hours trading. Investing is stressful as hell. I'm coming to the conclusion that lacking a large amount of money or extraordinary skill, $/hour is far better working a part time job.

Stegg• 17 years ago

I dabbled with investing in Apple stock a few years back and it turns out I don't have the stomach for it. I hear ya.

sahaj• 17 years ago

it's up ~$12, or ~6%.

jonknee• 17 years ago

"Investing" in the short term is simply gambling. It can be a lot of fun, but the average person is (as you note) better off working.

yardie• 17 years ago

My mom is still kicking herself for not buying Apple when it was trading for $2 (~'97). I knew as soon as Steve Job's stepped in things could only get better.

It's the same feeling you get when you forget to buy the lottery ticket the day they call your number.

seiji• 17 years ago

Who killed the link to the primary source non-subscriber content with actual numbers?

http://www.apple.com/pr/library/2009/10/19results.html

netsp6• 17 years ago

Quarter:

    Macintosh sales: 3.05        up     17%
    Ipod sales:      10.2        down   8%
    Iphone Sales:    7.4 up             7%
    Revenue:         $9.87b    (up from $7.9b)
    Profit:          $1.67b    (up from $1.26b)

spicyj2• 17 years ago

And earnings of $1.82/share, way above analysts' predictions of ~$1.42.

10ren2• 17 years ago

For context, the 2008 iPhone sales (whole year, not a quarter) were $1.84B. And now it's $7.4B in one quarter. Is that even possible?

http://blogs.eweek.com/applewatch/content/corporate/apple_fi...

Here's 2009 figures in a similar table: quarter not whole year: http://www.betanews.com/joewilcox/article/Apple-Q4-2009-by-t...

spicyj2• 17 years ago

Clicking through Google gets rid of the pay wall:

http://www.google.com/url?q=http%3A%2F%2Fonline.wsj.com%2Far...

schammy• 17 years ago

Whoopee. Wake me up when you an interesting story to report.

gamble• 17 years ago

Apple's 10% market share is actually a financial advantage now that application support isn't such a big issue. Whereas it would be hard for Microsoft to grow beyond the overall market for PCs, Apple has plenty of room to grow.

netsp6• 17 years ago

Definitely. They have 10% of the OS market, 10% of the hardware market & good margins on both. Growing from 10 - 15% is admirable, but not as hard as growing from 70% to 105%.

wmeredith2• 17 years ago

"Growing from 10 - 15% is admirable, but not as hard as growing from 70% to 105%." I just emailed this around the office. Hilarious.

Apple 4Q Profit Jumps 47% On Higher Mac, IPhone Sales

Related Stories