Talk about your wow numbers.
In a scheduled release of third quarter figures today, Apple reported record quarterly revenue and huge sales numbers. “We’re thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent,” said Steve Jobs, Apple’s CEO.
The report indicated that iPhone sales grew 142 percent, and iPad crushed it with growth of 183 percent. Apple reportedly sold 20.34 million iPhones and 9.25 million iPads in the quarter. Cupertino also sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter, as well as 7.54 million iPods, which represents a 20 percent unit decline from the year-ago quarter.
Apple provided live streaming of its Q3 2011 financial results in a conference call this afternoon. On that call, Peter Oppenheimer, Apple’s Chief Financial Officer, stated the company was "extremely pleased" with performance so far this year. He stated that in the first three quarters of this year, Apple has produced $35 billion in year-over-year revenue, and that he expects revenues of $25 billion next quarter, with gross margins of 38 percent.
When asked to pinpoint what drove the iPhone growth last quarter, Tim Cook, Apple's Chief Operating Officer, acknowledged that it was due to making the device available on 42 new carriers worldwide and 15 new countries. However, he went on to state that it was developing markets, specifically China, Latin America, and the Middle East, that were primarily responsible for the incredible growth.
Cook kept beating the drum, and rightfully so, that Mac sales year-over-year grew at 14% which was five times the industry rate of 2.6 percent. He noted that this was the twenty first quarter in a row the Macs beat the market.
However, Cook acknowledged that when you look at sequential Mac sales, growth was five percent, and in recent quarters sequential growth was as high as seventeen percent. He attributed this to three possible causes:
- There was some cannibalization, as Apple shipped two times the number of iPads than Macs. Cook stated that sales of iPad 2 have been a "frenzy" and that while some customers "choose iPads instead of Macs" it was clear to Cupertino that "more choose iPads over Windows PCs." He further stated that there were more "Windows PCs to cannibalize than Macs."
- Many customers may have delayed purchase of a new Mac while they waited for Lion, which will be released tomorrow
- Last year Apple launched the new MacBook Pro; this quarter, Apple launched the new iMac. While both were well received, the MacBook Pro makes up majority of Macs sold, and that makes the comparisons differ
When asked about the ongoing intellectual property disputed, Cook responded by stating, "We love competition. We just want people to invent their own stuff."
To the chagrin of many home theater buffs, Cook claimed that the Apple TV is "still a hobby here", that it was just not looked at the same way as any of the iOS devices. However, he did add that Cupertino was continuing to invest in Apple TV and was very happy with product they launched last fall.
When asked about rumors regarding suppliers, Cook responded with, "We don't want to get this in any detail" and that Apple's relationship with their suppliers was "part of the magic...the things we feel we have the secret sauce in." He stated that "at the end of the day we always make the best decision for Apple."
As if reading off a script of recent Apple rumors, of course the prepaid question came up. When asked about new customers and new markets, specifically the prepaid market, Cook replied with: "There is no better device than the iPhone for a person to move to a smartphone." He added that Apple had "a very good focus here, and we can compete with anyone... In general we are not avoiding the prepaid market; we know we need to play there."
Cook's final statement discussed the overall strategy at Apple. He said, "We will only make products we are proud of, that are the best in the world...It is up to us to convince people to spend a little more for a materially better product."
Oppenheimer finished up the call with some forward looking statements that were separated from financial numbers. "We cannot wait to get iCloud and iOS 5 into the hands of customers this fall," he said. When asked about getting more movie titles into the iTunes Store, he responded with "We have a very, very broad library" and that Apple is "adding more content each quarter." However, he left with the teaser: "Look for some more content later this quarter, we have some neat stuff coming."
