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Apple Announces Most Profitable Quarter in History
zacharye writes with an except from an article over at BGR about Apple's quarterly results: "'Disappointing' though it may have been to some, the iPhone 4S propelled what is now confirmed to have been the most profitable quarter any technology company has ever recorded. Apple on Wednesday reported record earnings for the December quarter, revealing a profit of $13.06 billion on revenue that surpassed $46 billion. Among technology companies, Apple's fiscal first quarter represents the most profitable quarter ever recorded. Only one U.S. company has ever posted a more profitable quarter — Exxon managed a profit of $14.8 billion in the third quarter of 2008 — and the driving force behind Apple's record-setting performance was quite clearly the iPhone."
Nokia and RIM should read and weep. This should have been them.
I'll have to disagree ...it's tech worthy news. The more money Apple gets, the more money they have to influence the shape of things to come.
It's good to be aware of the shifts in power and the current status quo regardless of whether you are a fanboi or not.
I can't help that think with record breaking profits like this, there has to be some sort of bubble that's about to burst. Maybe it's paranoia brought about by the current economy, but goodness.. $13 billion in profit? More than 25% of their revenue is profit? Something is going on here..
They are building all their products in China. What's so hard to figure about this? OK, Foxconn will now pay the workers a few Renminbi more, per hour, but don't expect that to dent the profit margin much.
A feeling of having made the same mistake before: Deja Foobar
Most Profitable Quarter in History?
Did you adjust for inflation?
The entire phone market is switching over to smartphones.
All of CHINA is switching over to smartphones.
Apple's current profits are based on selling to a tiny fraction of the current phone market; at least some iPhones are now free in contract.
This is not a bubble. This is a surfer just at the START of riding in a very big wave.
And that's only figuring in the phone business, the entire PC industry is going to switch quickly to where most casual consumer computing is done on tablets... and there Apple is again, lead surfer on that wave.
Oh, and I forgot to mention Apple is a leader in selling consumers media over the internet. But that would only matter if that were some kind of transition underway also.
So if you think it's time to sell, think again... even if you think buying now is foolish, well plenty said that back at $350. The fact is that just to keep the absurdly low P/E of 15 that Apple has currently, every quarter is going to see a large stock surge like you see now as profits and cash on hand keep dragging the price up against the will of the traders.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
And yet Apple couldn't manufacture iPhones in the US because they couldn't afford the extra $49 it would cost to make iPhones here. It might shave a few millions off of those billions. Can't have that happen!
When Exxon posted those profit numbers people were screaming for a windfall profits tax. Where are those people now? Probably listening to their iPod, tuned out to the world.
Learning HOW to think is more important than learning WHAT to think.
This would not only restore manufacturing, but it would also improve our tax base, rather quickly. Finally, it would force nations that we have supposed open markets with that manipulate against us to change their behaviors.
So, for our top 20 nations that we trade with, this would punish the following:
While giving other nations like Canada a pass:
Interestingly, this is legal PER WTO. WTO's position is that when a nation's trade deficit is larger than 10% with another, than you may take action.
The trick here is to convince the neo-cons that are attached to China's pants to let go and back America instead. Right now, far too many neo-cons are the ones blocking efforts at a balanced trade. In addition, without a budget deficit below 500 billion (or so), this probably becomes impossible to do.
I prefer the "u" in honour as it seems to be missing these days.
So the Android phones that are made in the same factory aren't as profitable.... why?
If it were solely down to the Chinese labour (who are not slaves btw, but we'll ignore the hyperbole) then there would be considerably more highly profitable electronics manufacturers.
The Foxconn factory complex in question has a lower suicide rate than the overall suicide rate for China. When you have half a million employees in the same city, some of them are gong to commit suicide. If you have half a million humans in the same city, some of them are going to commit suicide.
The world's, and particularly the USA's, economy depends on oil. There is no alternative. The world needs oil. If the oil stops, everything falls apart. In other words, whatever the cost of oil is people will buy it. They don't have a choice.
If Apple stops, people will use a competitor's products. No big deal.
(see: "elasticity of demand")
In related news:
Apple spent a tiny, tiny portion of their profits bludgeoning their competition in patent litigation.
$100 million sure sounds like a lot until you see how much they make.
Which is why I mentioned it. If you are on the other side of Highway 101, at a certain company you are probably cringing at this turn of fortunes.
Why not do evil? It evidently pays very, very well.
A feeling of having made the same mistake before: Deja Foobar
I'll have to disagree ...it's tech worthy news. The more money Apple gets, the more money they have to influence the shape of things to come.
It's good to be aware of the shifts in power and the current status quo regardless of whether you are a fanboi or not.
The profit levels say nothing about the shape of things to come (other than more law suits).
What the do indicate is the excessive level of profit is cranked into the iphone/ipad line.
By my estimate they could cut the price in half and still make a profit. None of the other phone
or tablet makers have this kind of profit margin, yet their products easily match the iOS products
in quality and ease of use.
If apple cut their prices the "cool factor" would be diminished, and the fanbois would move onto something
else. If they aren't over paying top dollar its just obviously not the best thing ever.
Sig Battery depleted. Reverting to safe mode.
I'll have to disagree ...it's tech worthy news. The more money Apple gets, the more money they have to influence the shape of things to come.
It's good to be aware of the shifts in power and the current status quo regardless of whether you are a fanboi or not.
Speaking of which :
@fmanjoo : "Apple's profits ($13 billion) exceeded Google's entire revenue ($10.6 billion)."
Thought that was pretty mind-blowing since we're all used to thinking of Google as some kind of juggernaut.
If all else fails, immortality can always be assured by spectacular error.
That's precisely why I don't own any shares of Apple. As soon as people start acting like there's a sure thing you can be pretty sure that the price is already way too high.
There have been a few very significant changes at Apple lately which lead me to suspect that it might not continue going up much longer. One they lost their CEO and the individual that drove the branding and marketing for Apple.Apple is mostly marketing, they rarely if ever do anything first and most of the time they way over price the items they sell, depending upon name recognition and glamor to pull it off. I'm not so sure that they're going to be able to continue that without Steve. Sure, they may very well, but so far I don't have any reason to assume so.
Then there's been the patent trolling and general dickishness of Apple trying to kill Android. It's going to come back to haunt them in the future in terms of increased competition and damaged image. I personally, am not going to be recommending Apple products any time soon, which makes it somewhat difficult as I don't generally recommend MS products either.
Lastly, stocks have a nasty tendency to regress to the mean over time and the more people view the money as guaranteed the more likely that it is that there's going to be a correction. Right now, if you want money, MSFT is a much better buy than AAPL is.
Will this lead to AAPL taking a bit of a dive, I don't know, it's hard to really figure out how long delusion is going to last before it finally comes into contact with reality.
I have Apple stock and yet I still can't help but be a little sad. Apple makes good products. I own a few and many other people I know have them as well (hence the stock). That said, I like to see winners that are worthy of emulation. Apple hasn't been a good corporate citizen lately. They have tried to drive competition from their markets by less than honorable means. They have not given back to the society that nurtured them. They have not set an example of how to treat your employees, your partners, or your country.
I know it would be considered heresy at American business schools, but I don't believe a company exists only to benefit its shareholders. A company is given many gifts by their society; monopoly on their brand and inventions, protection in trade, infrastructure to distribute their goods, and consumers to buy it. Companies cannot succeed on capitalism alone. Don't misunderstand me, I believe that capitalism is the greatest economic system yet devised because it harnesses our inner greed, but the power of that greed can be self-destructive.
So I guess when I see profits of this magnitude, it makes me a little nervous.
If who makes the most money is what decides what is "right," then I guess McDonald's is the best restaurant in America.
That'd be a great point, if customer satisfaction surveys and analysis of support call center numbers didn't suggest the exact opposite of what you've just claimed.
Here's what's funny: the iPad has been competing with similarly priced competitor devices for a while now - devices from Motorla, Samsung, Dell... how is it that those other makers have lower profit margins on their devices (by your own claim), yet Apple could cut the price of the iPad in half and still make a profit?
And the profit levels absolutely do say something about the shape of things to come: the person with the thinnest profit margins is the one who has to start cutting corners on build quality and components to be able to make a profit. The person with the biggest profit margins has some room to reduce their per-unit profit without sacrificing build quality, allowing them to maintain their market share in the face of competitive pressures.
First of all, if Apple does any R&D
Webkit?
LLVM?
Obviously doing material based R&D on materials for cases and such...
It's a little odd how even the most casual, and certainly any technical user, could be unaware of the R&D Apple does.
Hell just with LLVM alone they are probably even ahead of Microsoft in modern compiler research!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The number of iOS devices (iPhone and iPod Touch) sold last quarter exceeded the number of Android units
Just barely, and only if you believe that overtly biased analyst's estimate. And why would you count the Touch as a phone? Apples to apples please :-)
More to the point, there is no guarantee of a repeat next quarter, far from it.
Have you got your LWN subscription yet?
Please. Palm Pre failed because the hardware was horrible and WebOS was half-baked at best. I lost track of how many bad reviews the Pre had due to the cheap build quality. WebOS has potential, but the powers at be - Apple Wannabe Rubenstein kept tripping up on everything. That's the reality.
At least the 1st gen iPhone was polished coming out of the gate. Sure it was missing some features, but it was polished. It's a concept that even the current handset makers just can't seem to comprehend.
The number of iOS devices (iPhone and iPod Touch) sold last quarter exceeded the number of Android units
Just barely, and only if you believe that overtly biased analyst's estimate. And why would you count the Touch as a phone? Apples to apples please :-)
The question is, why do you care about whether iOS or Android is "winning?"
If you're Verizon or Sprint, or HTC or Sony Ericsson, then you might just care about phones. You want to know which devices are drawing customers into your stores, so things like the iPod Touch and wifi-only iPad are irrelevant to you. All you want to know is how many handsets and 3G tablets get activated on your network.
On the other hand, if you're a developer, or just an armchair tech enthusiast, you want to know which platform is more successful. Which ecosystem has a larger market for apps, which OS do people prefer to interact with, which vendor holds sway over more eyeballs, which vendor has more influence when doing deals with content providers and such. I think most Slashdot readers fall into this category.
And to those of us who are armchair-referreeing the platform race, handheld and tablet sales are extremely relevant. A platform that is successful on a variety of devices has a definite advantage in the marketplace. It will attract more content providers, more app developers, and more accessory makers. This in turn reinforces the strength of the platform, which encourages consumers to buy more devices.