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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.
It shows that nerds are wrong and Apple is right.
Seriously, you're confronted with an existence-proof.
Everybody gets what the majority deserves.
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
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.
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.
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.
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.
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 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.
The sun is the same in a relative way, but you are shorter of breath and one day closer to death
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.
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.
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.
However, the solution to a trade gap is not protectionism. It may help in the short term, and appear to be an ideal solution but it only hurts the economy as a whole and stifles growth.
Examples? This seems to be an oft-quoted talking point, but I've seen few evidence to support it.
I do have a counter example. Brazil has high import tariffs, which apply, among other things, to Apple products. Did Apple pull out of Brazil? Hell no. Foxconn is building a factory in the country now so that they can manufacture locally and dodge the tarrifs. End result: numerous local jobs which feed right back into the country's economy, and, of course, all those workers pay taxes, too.
It's perfectly logical, too. Apple can outsource manufacturing to China to cut costs, but they can't sell as many of their gadgets there as they'd like to (to make profits like the one in TFA). They need rich countries for that - the kinds of countries where workers are not overworked and starved so they have interest in fancy gadgets like that, and paid well so that they can afford them. So if you just make that particular method of cutting costs unprofitable - via tariffs, for example - you'll see manufacturing plants in U.S. and Europe in no time.
And no, you can't compete with China otherwise. Not unless you are willing to bring the standard of living down of their level - and not to the level of Chinese middle class, which is the lucky 200 million; but down to the level of those factory workers, who think of their 12 hour job as God's grace compared to what they face otherwise.
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?