All Articles Tagged profit

While all of the 2010 Verizon iPhone/Tablet rumors are still in the air, Verizon has seen a very real loss of profit this last quarter. Their total profit was $3.16 billion, which was down from $3.4 billion one year ago. According to Denny Strigl, Verizon’s president, this loss is partly due to AT&T and iPhone 3GS.

“When you think about what Apple has done in bringing the iPhone into the marketplace, it truly has accelerated innovation. And as we talk to all of our manufacturers, everybody has come out with their own iconic device, and I think that this has been very good overall for our customers.”

Verizon is planning to launch a few iPhone competitors in the near future with the Palm Pre and the new BlackBerry Storm 2, along with some Google Android phones. Make no mistake, those are some nice phones, but none of them have an Apple logo on the back side.

2010 should be a very interesting year…

[Via AppleInsider]

Quarterly results time, when the internet’s fancy turns to chicken-little predictions of how many percentage points this or that company slipped on which or what index of… who cares.

It’s not the first time we’ve mentioned this, and we’re certainly not the first people to have mentioned it. Yet, just like clockwork every 3 months analysts spout estimates and every blog and their commenters race to re-publish what in essence are meaningless numbers.

Cases in point: Apple and the iPhone.

Certainly, without much room for doubt or question, Apple’s market share and likely iPhone market share will be down this quarter. Newsflash: the market will likely be down this quarter. So if Apple is selling 1% or 2% less in terms of units, hellseven 10% less in terms of units, is that reason to panic?

If you’re an analyst or shockmedia type, likely “yes”, or if you’re manipulating stock for short term turnover rather than stable long term growth, “aye, ye scurvy dogs!”. But if you’re Apple?

No.

Historically, Apple doesn’t care about market share, they care about profit share. (They already own mind share, so we’ll remove that from the equation for now).

Apple is a public company that reports its margins, which typically run around 30%. Let that sink in for a moment. When Palm is selling millions of Centros and losing money hand over fist, when Nokia owns the international market and revenues plummet, when PC makers are racing each other to the bottom of the netbook price list to eek out razor-thin margins and gaining footprint only to hemorrhage cash, rumors of iPhone nanos and cheapo iNetbooks make as little sense for Apple as iSupply- and analyst-fueled headlines.

Sure, it’s nice for consumers to get low prices, but not at the expense of the companies going out of business and no longer giving us products or competition. Short term gain at long term loss isn’t sustainable. It’s the $0.99 fart app of the electronics space.

Apple reports earnings on April 22nd.

Yeah, yeah, Michael Dell once said Apple should be shut down and the money returned to shareholders. We all know the can of whupApps Steve Jobs has unleashed on the industry since then. These days, Apple’s profits look as good as their products and Dell’s… likewise.

So it’s with no small amount of trepidation we notice WMExperts noticing the world noticing Dell might just be making an entry into the smartphone market…

What’s wrong with that picture is pretty much what’s wrong with the exhibit in general. While Apple holds a fairly small percentage of the global cellphone market (as it does the global computer market), it happens to enjoy among the largest percentage of profit in the market (also, as it does with computers).

MacDailyNews highlights that while Apple ships an insignificant number of units compared to a behemoth like Nokia, it makes DOUBLE the profit of Nokia. Likewise, while rivals such as the Palm Pre are getting some much deserved attention, their finances (and thus ability to pay talent and fund much needed R&D) are on the brink — while Apple has nearly $30 BILLION in the bank.

So, while carriers are increasingly desperate for “hero” phones to make a splash and attract high-spending customers, according to mocoNews.net, current performance is showing few — if any — can currently match either the return on investment, or user experience, of the iPhone.

Sure, the smartphone market in general is continuing to grow, and may even be recession proof according to Forbes, but is anyone outside of Apple really poised with enough creativity, cash, and cunning to leverage it?

[Thanks to Jeremy and Dieter for source links!]

So you’ve been running on iPhone 2.0 (hopefully, 2.0.1) for a while now. And you’ve all enjoyed the plethora of quality apps at the App Store, but did you know how well the App Store was actually doing? Well, according to one of those old reputable printing press companies, pretty darn well.

The App Store holds a current pace of earning a revenue of over a million dollars a day, which roughly translates to $360 million a year. Steve Jobs issued some resounding statements about the App Store saying,

“This thing’s going to crest a half a billion, soon,” he added. “Who knows, maybe it will be a $1 billion marketplace at some point in time.” and also said, “I’ve never seen anything like this in my career for software”

Though the WSJ doesn’t believe Apple will be able to derive much profit in this current 70/30 split since they only make enough money to cover credit card transactions and maintaining the App Store itself, Jobs believes that having such a direct pipeline of apps will be able to sell more iPhones much like how iTunes enabled more sales of iPods.

So yeah, that App Store is doing great. Who would have thought an easy-to-use, iTunes-like interface would revolutionize the mobile software industry? Best of luck catching up RIM, WinMob, Android..

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If you hadn’t heard, Apple was the lone bright point in a sea of bad financial news yesterday¹. Their last quarter was stupendous. revenue grew 35% year over year, total profit grew about the same amount. Apple’s profit margin even grew by a couple of ticks. They’re earning more revenue than ever and they’re making more profit off of that revenue than ever:

The Company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share. These results compare to revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 31.2 percent in the year-ago quarter. International sales accounted for 45 percent of the quarter’s revenue.

What spurred this growth? Why, selling more gadetry, of course. Macs were way up, but check out these iPhone sales numbers:

Apple shipped 2,319,000 Macintosh® computers, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter. The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 2,315,000. –

…For those of you keeping score, that means Apple sold only 4,000 more Macs than they did iPhones. That will change this quarter, I’m sure.

When I think about it, the most surprising thing about Apple’s turnaround since the return of Steve Jobs is how long it took them to get into making things like the iPod and the iPhone. Apple’s strength has always been making hardware and software seamless work together in a way that creates just a little joy for the user. Limiting that skill to just computers (well, and the Newton) as Apple basically used to do seems just plain crazy now.

Seems like every time I wrestle with a gadget lately – from a Cable Box to a Camcorder, somewhere in the back of my mind I’m thinking “Apple could so this better.” Not “I could do this better,” mind you. Apple could. I’m willing to bet that there are millions like me right now.

…And that’s as good an explanation as any for why they just had their best quarter ever.

¹ – No, I’m not a financial analyst, but even that rate cut seems to have been taken as a sign that things are bad — a desperate measure.