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."

Comments

Nokia and RIM

[vakuona]

Nokia and RIM should read and weep. This should have been them.

Re:Nokia and RIM

[Luckyo]

I can. Most of the phones in the world will still be nokia's basic phones just like they have been for last ten years or so. Why? Because in the biggest markets (in terms of numbers sold), people can't afford anything else.

Remember to mention that you're talking about SMARTphones if you want a discussion about rich markets and place where android, ios and black berry have a standing.

Re:Nokia and RIM

[PRMan]

Android is certainly the bargain option. Apple makes more money than Microsoft in the PC market, so you could say they are "winning". But that would neglect the fact that Microsoft has over 90% market share. And that, although Apple had as much as 14% market share in the past, a couple bad decisions and they were nearly gone. Microsoft has made hundreds of bad decisions, and yet they survive no problem.

Re:Nokia and RIM

[Flytrap]

I don't know the real numbers, but Android could still be winning. It's not as if all of the different manufacturers have one joint financial statement.

More than half of Verizon smartphone sales in Q4 were iPhones
Read more: http://reviews.cnet.com/8301-19512_7-57365200-233/more-than-half-of-verizon-smartphone-sales-in-q4-were-iphones/#ixzz1kQco5gZ4

And the rest is shared between all the numerous Android manufacturers, not to mention RIM (which is still hanging in there), the smattering of Windows Phone manufacturers and a hodge-podge of low end smart phones still running Samsung's Bada or Nokia's Symbian.

You are correct... Android is not a company with its own income statement. The Android handset manufactures compete among themselves as much as they compete against the iPhone. And the thing that is rarely ever said out loud (only whispered in dark tech filled corners) is that the majority of the Android registrations that Google cites in its numbers are cheap low end hand sets that most people pick up for free on a two year contract...

The Android standard bearers such as the Galaxy S2 and some of the HTC models are easily as good as or better than the iPhone... but so many people are entering the smartphone world at the bottom end; and that space is filled with so many so-so Android devices, it is understandable why some (39% according to the latest research) make the switch to an iPhone as soon as they can.

Re:Nokia and RIM

[Swampash]

I hear Kodak had a huge market share too.

Re:Nokia and RIM

[jcr]

had to be rescued by Microsoft.

Nope. MS put in $150M as a token investment. The main point of that deal was that MS promised to keep shipping Office on the Mac for five years, and Apple let them off the hook for stealing Quicktime code for Windows.

-jcr

Re:Nokia and RIM

[Kartu]

iPhone4's are top selling model only because competitors like Samsung offer many different models. Apple's smartphone market share is about 14% worldwide, 25% in US. Samsung's market share is about 24% worldwide. Apple making more money with 14% market share than remaining 96% (assuming it's true) only tells you how hard it "pwns" its customers. It might sound good to you only if you've invested in their stocks, but hard too see why anyone would like this fact as a consumer.

Re:Who Cares?

[Anonymous Coward]

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.

American jobs

[Anonymous Coward]

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!

Re:American jobs

[randy of the redwood]

Not to be pedantic, but if your $49 is correct, that would be just under $2 BILLION in reduced profits if they did it in the US for last quarter alone. According to the press release, they sold over 37 million phones last quarter.

I think if I went to my boss and suggested it would be a patriotic move to build here and it would only cost us $8 billion a year, I would probably be looking for work.

I am a big fan of building in the US, but let's look for products like construction equipment (that take large amounts of natural resources we have, and are expensive to ship), and do those first. (See Caterpillar for a success story like this). When China's economy has caught up to ours (they want Lattes too), then we can look to compete on things like electronics that are cheap to ship.

Re:American jobs

[artor3]

Do you think Steve Jobs would have started Apple if he had been born in Kenya? Would the engineers there be able to design great devices if the electricity was only on for four hours a day? What if some warlord rolled through, enslaving, raping, and murdering anyone in their way?

There's a reason you don't see any successful businesses based in Somalia. You need a prosperous, stable nation as a launching point. Companies like Apple are quite happy to take advantage of the great conditions here, but give absolutely nothing back. Those conditions won't be around for the next generation as a result.

Re:American jobs

[stdarg]

Yeah I understand your argument but you're acting like one half is more important than the other.

There's a reason Apple is making billions of dollars and you're not. You both have the advantage of American prosperity and stability. But they made it and you didn't (not to the same level). And yet you want your "piece" of their success.. and the only thing you did to earn it is to be born into this backdrop of prosperity and stability which you have very little responsibility for. So why do you deserve anything more than the same opportunity that the people high up in Apple have? And you already have that opportunity because you live here, you don't need to steal their money to have it.

Even this late in the game you could get a piece of the action by working for them or buying a tiny amount of their stock.

Let's do some calcs.. you said $1.8 billion, divided by 300 million, that's $6 per person. How many shares of Apple would you need to buy to get that same $6 legitimately and morally, not by just taking it from them at gunpoint? Well probably about 1 share the way their price has been appreciating, you'll get more than $6 per quarter.

But nope, that's not good enough for you! They "owe" it to you, because they happen to benefit from American prosperity (just like you).

You know, I can totally get on board with this sense of entitlement. I'll do you one better. China's economy is heavily dependent on American wealth.. so they owe their success to us too. In fact we should own like 60% of China. Africa takes a bunch of aid money from us, I propose a 75% tax for everybody in Africa, payable to us.

Btw this is exactly why so many left wing movements evolve into fascism, from unions to communist regimes. Turns out everybody owes you everything, and you and your buddies are just the men to make them pay their fair share. Screw freedom, it's wealth that makes us all happy and successful.

Windfall profits tax!

[chill]

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.

Scaled Tariff

[WindBourne]

We are LONG overdue for America to implement a scaled tariff. Basically, These are tariffs that target nations that we have large deficits with, but in particular, those that manipulate their money and markets against us:

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:

• China - 36%
• Venezuela - 28%
• Italy - 25%
• Germany - 24%
• India - 22%
• Japan - 16%
• South Africa - 14%
• Mexico - 13%
• France - 12%
• Taiwan - 8%

While giving other nations like Canada a pass:

• Argentina,
• Australia,
• Belgium,
• Brazil,
• Canada,
• Hong Kong,
• Luxembourg,
• Netherlands,
• Singapore,
• South Korea,
• United Kingdom

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.

Re:Scaled Tariff

[jo_ham]

Or instead of crippling yourselves with trade manipulation you could just repeal the Bush Era Tax Cuts - there's 2 trillion right there, that barely touches the bottom 90% of earners and yet will cost the US 2 trillion dollars - more than twice the "expensive, wasteful, ill-affordable" healthcare bill.

Get your house in order before blaming countries like Germany, who have built a very strong export economy, for harming your own. You'd hardly say that Germany was in the position it's in by being like China in the way it goes about becoming a large net exporter - this is not simply about "restoring manufacturing" - it's not as simple as that by a long shot.

Re:Scaled Tariff

[artor3]

The Republicans took millions of people hostage last time we even talked about reducing the Bush tax cuts. They'd burn the country to the ground before allowing them to be dropped entirely.

When ~50% of your government is insane, evil, or both, the best course of action is usually unavailable. We've got to work with what we've got.

Re:Bubble?

[BasilBrush]

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.

Re:Who Cares?

[CharlyFoxtrot]

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.

Money is the final decider?

[dtmancom]

If who makes the most money is what decides what is "right," then I guess McDonald's is the best restaurant in America.

Re:Who Cares?

[Anonymous Coward]

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.

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.

Re:Apple has greater market share too

[Daniel Phillips]

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.