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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.
As a WebOS fan, this makes me sad. Why would HP give up on such an incredibly profitable market after only investing $3.3billion http://techcrunch.com/2011/11/21/hps-failed-webos-experiment-cost-them-3-3-billion-but-whats-next/ ? The iOS and Andriod user experiences still have not passed WebOS smoothness, in my opinion, though the notification systems are catching up.
Although HP's management style of WebOS reminded me of: "They say you gotta spend money to make money. I don’t know what went wrong. We spent all our money." - Tom Haverford
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.
Nothing lasts forever. But Apple have put together a quite amazing run. If Apple were to shut down tomorrow, and distribute all of its cash as dividends, it would be returning 100bn to its investors, and for anyone who invested in Apple 10 years ago, they would be getting a stupidly large return. That for what was already a mature company.
Most Profitable Quarter in History?
Did you adjust for inflation?
It shows that nerds are wrong and Apple is right.
Seriously, you're confronted with an existence-proof.
Everybody gets what the majority deserves.
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!
They make very little from the software/media sales. Gross margins on the hardware are huge though: 44.7%. Tim Cook indicated in the conference call that that's probably not a sustainable number (their margins are typically in the high 30s). But the raw numbers of devices they sold grew by stunning amounts. Even Mac volumes rose by more than 25%, and that's in a PC industry that's not doing that well in aggregate.
Say what you want pro or con about their products, but they know how to make stuff that people want to buy.
Case in point: Verizon reported that iPhones accounted for 55% of their smartphone sales last quarter. That's against how many different models of Android phone?
They are building all their products in China. What's so hard to figure about this?
So is everyone else. Everyone else is not enjoying this level of increase in profits quarter after quarter, or the same margins that Apple has.
Only Apple as far as I know has started moving any production (the A5 chip) back into the U.S.
OK, Foxconn will now pay the workers a few Renminbi more
They already do, and yet Apple's sales surge.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You lost me there. Everybody knows it's the drummer that has insight into everything.
The real Sig captains the Northwestern. This one captains
Cause...
I'm a bass player
Meet effect...
it's now considered fortunate to have a shitty McJob
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.
abusus non tollit usum
: abuse does not take away use, i.e., is not an argument against proper use
That is, fanboyish reactions do not strip the relevance of one of the largest players in a tech industry making more money than ever before, or prevent sane discussion of the fact.
This post contains no rudeness or derision of any kind. All arguments are friendly. Terms and exclusions may apply.
You should learn a few things about investing before making a fool out of yourself. The fact that AAPL shares are above 400$ bares no meaning at all on whether the price is "sky high" or not. Berkshire Hathaway class A shares are over 100,000$ each and their price is not "sky high" either. It's all about the actual valuation metrics of the company relative to the share price and according to them, AAPL was actually pretty fairly priced before the earnings release.
Or are you going to be making even more of a fool out of yourself by sticking to your guns and saying that a PE of 15 for a company with projected 30% revenue growth is "sky high"? Except that it was actually even cheaper then that, because the revenue growth ended up being twice higher.
Take a look at this chart.
http://cdn.macrumors.com/article-new/2012/01/appleq112topchart.jpg
The orange strip is revenue from downloads. Sure Apple makes money from them, but it's dwarfed by the money they make from hardware.
He was a drummer, until he took an arrow to the knee
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
Nerds are often arguing about issues that require foresight
That is exactly right, and why you should place no stock in predictions from those on Slashdot that constant predict Apple's demise for reasons that plainly make no sense and exhibit the continued misunderstanding of the market as a whole.
something the general public doesn't have when it comes to IT because they're good at other things than us.
And yet the general public generally speaking could have told you Apple continues to fare well, just form anecdotal evidence. So should not there be some giant red flags here that nerds En Masse have apparently willfully given up the power of foresight simply because of hatred?
Which is why we still argue that the 'losing' alternative is superior.
You can still argue something is superior while correctly predicting the thing you think is not superior will win out and understanding why. That's what helps you to make the truly superior thing fare well in the market.
But again many nerds here on Slashdot have instead decided over and over again to proclaim Apple is not successful because they say so, and the technologies they favor will win "just because". That is not going to work out well long-term.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Damn you, dnaumov, now I have to open at least 5 Wikipedia tabs so I can later pretend I understand something about investing.
Lessee... "PE".... 41 matches. This is gonna take a while...
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.
And the number of "fanboys" appear to grow exponentially each quarter, judging by the financial results. How exactly do you imagine that Apple manages to keep on getting all these new fans?
WARNING: This question actually requires you to think. Be careful. Do some warm ups first.
abusus non tollit usum
: abuse does not take away use, i.e., is not an argument against proper use
Quod Latine sonat alta.
Faster! Faster! Faster would be better!
Of course some people seem to think that Windows and Android are winning.
It all depends on your definition of winning. One of the analysts covering the mobile industry was being interviewed on CNBC after Apple reported their quarterly results. This analyst claimed that 94% of current iPhone users would buy another iPhone but only 47% of current Android users would by another Android device.
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.
I completely agree. Having used Android, iOS and WebOS I agree that WebOS was a superior platform to both of them. However, WebOS failed on two fronts:
WebOS failed where Apple succeeded because WebOS didn't have the cult following, and WebOS failed where Android succeeded because many hardware manufacturers made Android devices.
Everyone has to admit that the flagship WebOS device, Palm Pre, was a beautifully designed device. It even made the iPhone look like an eye sore, but it was clear from day one that without the support of the fanboys and without the blessing of the hardware manufacturers it was just not going to go anywhere.
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.
1) "match the iOS products in quality and ease of use." We'll have to agree to disagree on that one. Most Android phones I've seen (with some very few exceptions) feel cheap, they feel much cheaper than they are in fact.
2) Android makers get the OS for free, remember Apple does more than just sell the hardware. There's R&D, software development, patents to be bought, etc.
3) Even with a free OS, show me the phones and tablets significantly undercutting iOS devices while providing the same quality. And the "going out of business, please buy our inventory" sales don't count.
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.
To me calling people "fanbois" and looking down on them because they think "the mainstream is so cool but they don't know what's cool, I know what's cool" just makes you another hipster. Just accept there are people who like something different from you, is that so difficult ? I can see why people like Android or Windows Phone, that doesn't make them idiots or "fanbois" just people with other needs.
If all else fails, immortality can always be assured by spectacular error.
If who makes the most money is what decides what is "right," then I guess McDonald's is the best restaurant in America.
I love this "the masses think" remark, because it exposes your elitism as well as lack of touch.
And the rest of your comment demonstrates your own elitism and lack of touch. Seriously, read your own comment. Since you don't use an optical drive, it's archaic? Since you're more productive with OSX, everyone else is as well? (I regularly use both OS X and Windows, by the way, and I'm far more productive on Windows).
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.
Apple now has $96 billion in cash/equivalents.
Which means that the $100M spent on Android lawsuits accounts for just over 0.1% of their current cash (equivalent) reserves. Barely a blip on the quarterly report.
Any insufficiently advanced magic is indistinguishable from technology.
It may not make sense to you, but it sure make sense to apple fans.
If they didn't care about technology they wouldn't buy every new phone apple puts out.
Making things expensive has ALWAYS brought new customers and repeat customers. If the product in question is anything other than a commodity, raising the price, and thereby implying a better product always sells well.
Sig Battery depleted. Reverting to safe mode.
I think they meant it was Apple's most profitable quarter ever and the second most profitable for any US company.
I've always wondered about this statistic.
When you compare a single company to a country, you have to consider demographic differences. For example, suicide rates are generally higher among the unemployed, among the mentally unstable, among the elderly, etc.
Foxconn employs people who are young, healthy, sane, not on drugs, and (obviously) gainfully employed. What is the national rate among that demographic, and how does Foxconn's rate compare? My guess is not favorably.
You should check out QNX on the Playbook -- It's undoubtedly rather heavily inspired by WebOS, and smooth as silk.
Required reading for internet skeptics
That's a boatload of cash. No, literally, a large boat load of hundred dollar bills. And it looks like they're going to need a bigger boat. That's like 1,200 congresses.
Help stamp out iliturcy.
I'm on the verge of getting an iPhone, because it's the only remaining smartphone that appears to be designed to fit in a pocket. I went to see about upgrading my Motorola Droid to a Droid Razr, thinking I would get something a little thinner, a little lighter, a little more battery, than what I have now. The Razr is the size of a ping-pong paddle. It's stupid. I walked out angry and still have my old phone.
I don't understand what the Motorola and other engineers are thinking. Congratulations on how thin the Razr is. Too bad it's comically large in X and Y. I held my Droid against every other smartphone in two different stores, and not a single Android phone is smaller in X or Y (some are thinner). The Droid is already right at my upper limit for pocket comfort.
Maybe Apple sold most of the phones on Verizon because the iPhone is the only phone-sized product remaining on the market. (I am happy to hear suggestions for a phone-sized Android phone, perhaps I missed one in my search.)
1977 - Consumer friendly complete computer out of the box Apple II ...
1983 - Mass market desktop metaphor computer and software Lisa
1984 - Macintosh
1987(?) - Small business affordable ($6000) PostScript laser printer LaserWriter
2001 - iPod (hard drive based music player with easily purchased popular digital music, N.B. iTMS took some time to develop
2001 - Mac OS X first unix OS that allowed but did not require geek cred
2001 - Apple Store first tech store that didn't suck (usually) in contrast to Best Buy, Circuit City, etc
2007 - iPhone first modern multitouch based "smartphone"
2010 - iPad first tablet that is not a laptop wannabe due to same iPhone pioneered multitouch interface
Dates are off the top of my head so could be off slightly. You can contest all you want about "didn't exist before" but these things were not in stores available to buy from competitors
Everyone I know has gone Mac in the last 2-3 years, and most have a story like mine. I was committed hardcore to another platform, though I had more than a few complaints. Still, no expectation of ever switching.
But the iPhone was a quantum leap in consumer technology. I was using a Palm, which was "not a bad smartphone" the month before the first iPhone announcement was made. Then iPhone was released and after 10 minutes using it I knew it was a completely different class of device. Within a few months I had realized that I couldn't keep my hands off one and bought it. Rather than let me down and gradually disappoint me, leading to rationalization and acceptance (the usual model for technology buys of all kinds), it continued to impress weeks and months into ownership and I have had no desire to switch—only to upgrade—ever since.
When iPad came out, I was absolutely sure I didn't need one, but ended up using one regularly for reasons unrelated to my own consumerist impulses. But boy did it drive those consumerist impulses... Again, within months I had bought one and it has becomemy most used and relied upon work device.
After those two experiences, Mac OS didn't seem far off, and already being in love with iPhone/iPad based on my own use of them, the one annoyance I had with them was the way that they seemed not to mesh as well with other platforms (in my case, Linux, but the same goes for Windows) as they do with Mac OS. So I resolved never to spend Mac-level money, but to buy a very old old used Mac and a Mac OS update pack, and get the OS X pack running on a hackintosh machine to "test the waters." I built a hackintosh box for $250 or so with a dual core mainboard, Firewire-800, and a RAID-1, and within a week of using it I knew I would soon migrate my life from Linux (where it had been since 1993) to Mac OS.
Within six months of going "Mac OS only," though, the difference in quality and hardware/software integration between my iPhone/iPad and my other technology devices (a hackintoshed desktop and a hackintoshed Thinkpad) was painfully obvious and I knew that I was done for—I really, really wanted access to true Mac hardware to avoid the niggling little issues and flaws of PC world hardware that seemed increasingly apparent to me.
Got a MacBook Pro 13" machine last January, finally.
It is the best computing device I have ever owned, bar none. Build quality is exceptional, fit and finish are so precise and refined that you feel as though it wasn't made by humans, but by perfect machines. Even the ThinkPads I'd always owned had little things that I'd never noticed. For example, I would never have said that the power switch was slightly crooked or that there was a little key vibration and noise in some keyswitches, or that the hinge had uneven tension throughout its range or that the display was a bit uneven in its brightness UNTIL getting and really using a MacBook Pro. The build quality is measurably better. It has raised my expectations for technology goods.
Aside from that, the ergonomics are also much better. Apple's touchpad and keyboard, though very foreign to me at first, have now enhanced my work speed considerably. For example, the key travel distance and key "give" on the chicklet keyboard has given me another 10-15 wpm in typing speed with no loss (indeed, a gain, thanks to keys not touching each other) in accuracy.
And of course beyond all of these things, there are just fewer fatal flaws. No BIOS to worry about. Exceptional battery life. No need to fuck around with drivers. No "update hell" in which the latest round of absolutely necessary updates kill some functionality in your system that you rely upon, leaving you installing/uninstalling/tweaking in a desperate haze for hours or days (problems seen both in Windows and in Linux). Just massive, massive piles of It Works Without You Having to Think About It, and It's Tough as Nails to Boot.
My parents and siblings' families have gone Mac (something I never thought would happen, an
STOP . AMERICA . NOW
Let's think about this for a moment. Exxon and Apple are approximately the same "size" as measured by market capitalization. Imagine what would the world be like if Apple just vanished overnight. Now, imagine if Exxon vanished overnight. Does it not make sense to anyone else that Exxon should be far more valuable? They drill, refine and ship oil and petroleum products that are used in damn near everything man does on Earth. Apple makes computers, smart phones, and tablets. It would be hard to live without computers, but I could do that a lot easier than without oil.
I know the fundamentals of AAPL back up its valuation. So maybe, the purchase habits of consumers in our society have gotten way out of whack with reality.
The fact you can raise a price to imply a better product, does not mean that expensive products are not better.
By there very nature better products will often cost more to produce.
People really struggle to separate price and value.
Invaders must die
Even less thought has been put in by the posters that refer back to the story as if suicides only happen at Chinese factories producing iPhones.
I don't think those people are being any less honest than the people who try to brush it off as a normal suicide rate by improperly applying statistics.
Don't forget that Apple got their OS for free too (most of it, anyhow).. since its primarily based on BSD, which they use and then of course contribute little back to the open source community, unlike Google who makes significant contributions to many open source projects
Oh really?
It looks like Apple contributes quite a few open source projects.
Sapere aude!
You do know that the income gap in China is narrowing, right? And it's widening in the US? Conditions in China are bad, but getting better. Conditions for workers in America are much better, but getting worse. Who's getting hurt here?
This is an expression of the free market at work, with a good dose of unintentional consequences for the corporate masters who shipped all the jobs overseas in hopes of getting cheap labour, thereby increasing the value of that labour, and slowly improving the lot of the workers there (at the expense of the workers back home, of course). All this crying and gnashing of teeth ignores the fact that conditions in China are improving for workers, and American workers don't like that.
The real problem isn't the shipping of jobs to one part of the world or another. The real problem is executive compensation. The leeches at the top pay themselves hundreds or possibly thousands of times the wages of the people at the bottom of the supply chain, instead of limiting themselves to something reasonable (but still quite a lot of money) and making sure that everyone else in the chain makes a decent standard of living.
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
> Apple's success is the limited variance. They make a few models of each device, and generally a good/better/best option for each
That is certainly a factor.
See: http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html
For why choice is a bad thing for consumers.
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
Apple is sitting on a giant pile of cash.
They probably have a very good reason for doing so.
So do you want to invest in a company with a lot of foresight or what?
And even if the market totally craters AAPL cannot go much below the cash value... around $82. A loss (if you were forced to sell then), but only 1/4 current value.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I hadn't realized you're the same person who posted the initial comment, so please don't think I was singling you out.
However, you ARE misusing statistics. Maybe not intentionally, but you are all the same. You can't just say "this stat is easily available, therefore I'll apply it" while ignoring all of the factors that would clearly run against your conclusion. For example, the median American wage right now is $33k. If Microsoft decided it was going to pay it's engineers $40k, you wouldn't say, "That's a good salary, because it's above what most people make." You have to compare apples to apples.
So where are the people clamoring for a windfall profits tax on Apple?
Or do we just call for those against companies that we dont like (energy)?
The number of iOS devices (iPhone and iPod Touch) sold last quarter exceeded the number of Android units
Just barely, and only if you believe that overtly biased analyst's estimate. And why would you count the Touch as a phone? Apples to apples please :-)
More to the point, there is no guarantee of a repeat next quarter, far from it.
Have you got your LWN subscription yet?
Please. Palm Pre failed because the hardware was horrible and WebOS was half-baked at best. I lost track of how many bad reviews the Pre had due to the cheap build quality. WebOS has potential, but the powers at be - Apple Wannabe Rubenstein kept tripping up on everything. That's the reality.
At least the 1st gen iPhone was polished coming out of the gate. Sure it was missing some features, but it was polished. It's a concept that even the current handset makers just can't seem to comprehend.
And there will always be people who will continue to claim that the happy run ends tomorrow. They've been doing that since AAPL was 70$ and somehow it doesn't happen. You have to understand the experience before you get why the return customer rate is 94+%. It's not a fanboism or cool factor (that may sometimes be the inital thing that gets you to the product at least to check it out). It's the actual quality and ease of use. Believe me 99% of populace couldn't care less what CPU the thing runs on or how many MP the camera has as long as it runs and does the things he/she needs and produces results. It's the geeks that squirm because it's not latest/greatest tech, but most of the time there's good reason for it. Take 4G for example. The network might even be getting there (I for one have 4G at home and benefit from it greatly for home network), but the current generation of 4G chips require a dedicated chip and draw quite a lot of power so you trade possible faster download speeds (and hype) for battery life. The next iDevices will have 4G because qualcomm has now a chip that can do most of the wireless stuff in one chip and the batter drain is less. That wasn't there yet for 4S and hence no LTE. The Android makers just wanted to scream WE'VE GOT 4G so they made it with no due consideration to end-user satisfaction (and I doubt you're satisfied with a half-day battery life on 4G).
Go use iDevices for 1 month and come back claiming you still don't understand the phenomenon...
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.