Apple Computer on Wednesday reported the financial results of its third fiscal quarter, characterizing the numbers as "the highest revenue and earnings in the company's history." The halo effect seems to be confirmed, as Macintosh unit sales grew by 35%.
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If this is third-quarter results, then the news probably came too late to affect their sales for this quarter. So if it has an effect, it'll show up next quarter or later. That said, I don't know how much the switch will affect sales anyway. Does your average Mac buyer even read technology publications?
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The quarter ended roughly 20 days after the Intel announcement, so you are correct. And why would you think that the average Mac buyer wouldn't read technology publications? Seeming as you pretty much have to make a conscious decision to buy a Mac, I would imagine that they are more likely to do so than (say) Wintel users.
Member since:2005-07-06
I talked to several Mac users about the Intel announcement.
I was surprised that so many of them weren't aware of it. Granted these guys aren't OS and or hardware geeks... but they are high-end users.
Even after telling them, they were like... so, how does this affect me?
I predict that this will have almost *0* impact on Mac sales. But once the transition starts, the people who are in the known but held out for the transition will cause Mac sales to sky rocket.
We'll see.
Member since:2005-06-30
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Absolutely true; the only question they want to know, 'can I still use my applications? can I still get updates? can I still get support?'
For me, even as a 'technical user', with an iMac G5 (20inch, 1.8Ghz), I'm not worried about the transition; its going to be atleast 18-24months before we really start seeing large numbers of Intel Macs, and even then, you're still looking atleast another 2 years, possibly, before the numbers of PowerPC Macs start to dwiddle below the 'return of investment' mark that drives whether or not a software company develops for a platform.
Member since:2005-07-06
Hmmm. That's a constructive, useful comment. And I think you are wrong. I have known, and am myself, developers and power users that prefer macs and mac os, to windows, linux, etc. I also know system people that would LOVE to have a mac but they just don't want to spend the $$$ to buy one.
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Nope.
"Revenue jumps 75% as Macintosh sales also climb"
http://www.marketwatch.com/news/story.asp?guid=%7B64ADB37A%...
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try also calculating the profits each unit brings apple, then multiply those numbers by the units sold and you will see that the macs are the driving force in the company... units sold, by themselves do not give you info on profits.. heck, if apple lost 1 cent on every ipod sold, then a growth in ipod sales would be a loss for the company.
Member since:2005-07-06
"This is a 35 percent growth in Macs and 616 percent growth in iPods over last year's first quarter.
Hello... I wonder what is driving the profits... IPOD!"
Is that your way to say (as Hannibal also said) "Macintosh is the past"?
Though Mac sales grew VERY fast, because Mac sales didn't grow as fast as iPods (even though Macs have higher margins that iPods) this is the new Apple-detractor's rallying cry to help save face that they are being proven wrong yet again.
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"Revenue jumped. Actualy units shipeed dropped."
What the hell kind of fool posting is this?
Revenues jumped - by 75%. Profits jumped - by 425%.
Units shipped jumped - by 616% for iPods and 35% for Macs.
In fact, Apple shipped a record number of iBooks and PowerBooks last quarter. And 6.2 million iPods last quarter was also a new quarterly record in terms of units, by more than half a million units.
Units shipped "dropped?" It's clear you didn't even bother to read the article.
Member since:2005-07-06
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Apple said today iPod shipments dropped to 5.29 million in the three months ended in June from 5.31 million in the second, according to a Bloomberg News survey of eight analysts. Sales of the iPod, which generated almost one third of Apple's .24 billion in revenue, are up sixfold from 860,000 a year earlier.
Which one is right? Could someone please tell me?
I'm sorry now for telling you off - Apparently we have conflicting news sources.
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2005-07-06
There's no such thing as a true monopoly. Microsoft is not a monopoly as long as competion exists in the form of Firefox, Opera, Linux, Unix, *BSD, and Apple. And likewise, how can you even say Apple is a monopoly? The last I heard, even Linux was used more than Mac. Seriously, come on.
Rather, this is how the market should deal with companies:
* If they're good, buy their products and tell friends about them.
* If they're bad, avoid them and tell friends about them.
But back to why I really scrolled down to the posting form... 35%?! That's incredible! I, like everyone else, was sure sales would dive when they announced the Intel switch. I guess this teaches us all a valuable lesson... hardcore geeks are the only ones who give a crap about any of this.
Member since:2005-06-29
Take a look at this post by Cory Doctorow, it tell very well the problem with Apple right now:
http://craphound.com/someone/000363.html
Besides that, I think I make very clear that I was talking about Apple's monopoly in digital music these days... But maybe my bad english doesn't did justice to that. Most of Apple earnings these days comes from Music (read iPod and iTunes Music Store)...
Also, just because a company has a really good marketing/propaganda, doesn't mean it's good for us. Microsoft monopoly in office format isn't good for us the same way Apple's in music industry isn't. If you're a fan of marketing, then Apple has a lot to teach you. If you value your costumer rights, I wouldn't say so.
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Err..isn't that just what he said?
quote:
"However, it's not illegal to be a monopoly, but it is illegal to use that monopoly power to break the market and bite the "invisible hand."
and btw. the things he said about what makes a monopoly is also true for Scandinavia, and probably the whole of Europe.
btw. the country I live in still has state monopoly in many ares, though they might by diminishing by private gettings access, and sate companies getting on the stock exchange.
--mtw
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I'm not sure how you can think that Apple has a monopoly in digital music. Are you sure you know what the word monopoly means? It doesn't mean having a popular product or service, it means having virtually the only source for a particular commodity. Obviously, digital music is available from many, many sources. Where's the monopoly? Now, like any business, I'm sure Apple wishes it could have a monopoly in digital music, but it doesn't and it never will. It's just not possible.
Member since:2005-06-29
Back in November, Apple has 87% of hard drive based MP3 players in north america. As far as I know, the ONLY way to legally buy music for this iPods (again, 87% of all market share), is from iTunes Music Store and *only* iTunes Music Store. (there's Real's hacked workaround to their music work in iPod, but how it's "legal" depends how you interpret the law... as apple has taken legal actions against then because they didn't license the technology from Apple, even if Real tried to).
I do consider this monopoly. You may think different.
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You are correct that the only Online Music Store that you can buy music from for the iPod is the iTunes Music Store, but the iPod will also let you put MP3 and other file types on it. So you do not have to buy music from the iTunes Music Store in order to put music on your iPod. In fact you can even set iTunes (the application, not the store) to not even show the Music Store. So although they may control over what music you buy online for the iPod, they are not making you only use it.
On a side note. I believe that Apple will support WMA-protected files on the iPod, which will allow you to buy music from other online music stores, once Microsoft makes those file types work on the Mac. I believe that the last thing Apple wants to do is say that the iPod can do WMA-protected files but it is Windows only.
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"As far as I know, the ONLY way to legally buy music for this iPods is from iTunes Music Store and *only* iTunes Music Store. (...) I do consider this monopoly. You may think different."
You're completely wrong.
As Anonymous already said, you can play .mp3s on your iPod, no matter where they came from. Heck, you can also buy CDs from Amazon or a music store in your town (what a concept) and rip it to the iPod --- legally.
So, actually, I think different.
Member since:2005-06-29
mmm emusic comes to mind.. no problems putting that on an ipod.. i think what you mean is the only legal music you may download and put on an iPod that contains DRM is from the iTunes music store.. but there are plenty of sites that offer music in one of the dozen of formats iPods can play
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In the *academic sense* there is no such thing as a true monopoly. But then, the academics of economics rarely fits into the real world. In the real world and legal sense, a monopoly (just speaking for the U.S.) is a company that has enough clout in a market to start pushing others around. However, it's not illegal to be a monopoly, but it is illegal to use that monopoly power to break the market and bite the "invisible hand."
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they have an 80% market share on legal downloads, but that is not enough to be considered a monopoly because there are so many other players still in the market.
Microsoft was considered a monopoly because after the late 80's/very early 90's they were really the only viable OS on the PC.
today, apple might command the largest share of the legal download market, but there are a plethora of other players in the market.
Member since:2005-07-06
But nothing is stopping anyone else from coming in with their own music player and/or Music service; Apple has created the best product, marketed it with equal zeal of a evangelical, and they're getting converts - all it seems like to me, is a few whiners hate the fact that they might actually have to compete with a company who seems to have its act together - listening to the customer, and delivering to those demands.
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"All you guys are blind: check the numbers...
1,182,000 Macintosh units
6,155,000 iPods
This is a 35 percent growth in Macs and 616 percent growth in iPods over last year's first quarter.
Hello... I wonder what is driving the profits... IPOD!"
1,182,000 Macs, costing anywhere from $500 to $3000 (of course the majority are somewhere in the middle)
6,155,000 costing $100-$400.
You can't tell me what the profit margin is on any given iPod any more than I can tell you the profit margin on any given Mac.
So unless you have evidence or real numbers (or a real screen name attached to an e-mail address, for that matter) then your claims are completely unfounded and irrelevant.
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2005-07-06
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I think the folks who said that the Intel transition won't make a difference are right. My friends who are Mac power-users read books like "Unix Tricks for OS X Tiger." The vagaries of Apple's latest shift in their Java attitude bothers them more than any processor change. And application oriented users care even less.
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Agree. Moreover, Mac users have successfully transitioned from Os 9 to Os X. So while going from IBM to Intel will demand that we change our habits a little (regarding Firmware etc), I think we can handle it with aplomb as long as the OS has the basic philosophy/behavior of the Mac OS.
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Estimates for the Mac mini range around 20%
Estimates for the Macintosh Powerbook/Powermac/iMac/iBook ranger between 25% - 30%
Estimates for the iPod (iPod mini to iPod video) margins hover around 20%.
Out of those 6 plus million iPods that include the sum sales of iPod mini to iPod video we don't know the breakdown, yet.
Now from Appleinsider and Apple's CFO:
http://www.appleinsider.com/article.php?id=1179
Below are some other notes of interest from the conference call with Apple CFO Peter Oppenheimer and vice president Tim Cook:
Sales and unit shipment breakdown
Apple shipped a total of 1,182,000 Macs during the quarter, including 687,000 desktops and 495,000 portables (a new quarterly record). This represents 65% year-over-year growth for desktops and 8% growth for portables. Desktops combined to deliver $845m in revenue while portables added another $720m.
A total of 6,155,000 iPods shipped during the quarter, accounting for over $1.1b in revenue. Year-over-year this represents a 616% increase in unit shipments and a 343% increase in revenue. From the previous quarter, iPod unit shipments rose 16% with revenue growing 9%.
Apple's "other music products" added another $241m in revenues, a 230% year-over-year increase. Compared to the previous quarter, this segment grew 12%.
Peripherals and other Apple hardware sales brought in $266m in revenue, a year-over-year increase of 21%. However, this figure represents a 5% sequential decrease in sales from the previous quarter.
Software sales, largely fueled by the release of Mac OS X 10.4 "Tiger," grew 21% year-over-year to $345m or 44% from the previous quarter -- the highest quarterly software sales in company history.
Geographical and Retail revenue breakdown
In the Americas, Apple shipped a total of 595,000 Macs representing nearly $1.74b in revenue. Year-over-year these figures represent an increase of 26% in unit shipments and 71% in revenue.
International sales accounted for 39 percent of the quarter’s revenue.
Apple shipped a total of 283,000 Macs in Europe, a year-over-year increase of 48% in unit shipments and 82% in revenue.
Apple was "unhappy" with Mac sales in Japan, which dropped 7% year over year. The company said it will continue to make changes to its direct and indirect Japanese distribution channels.
Apple's retail stores combined to sell over 144,000 Macs during the quarter. Overall the retail segment accounted for $555m in revenue, 106% year-over-year increase.
Apple's "other segments" combined to sell 84,000 Macs, bringing in an additional $257m in revenue -- an increase of 76% year-over-year.
Other notes of interest
Apple saw "no obvious reduction" in demand for current PowerPC Macs in the three weeks following its announced transition to Intel processors.
95% of Wal-Mart stores are now carrying the iPod. Apple is investigating whether to expand to the retail giant's international locations.
Apple ended the quarter with 25,000 storefront distribution points for the iPod world-wide, an increase from 21,000 distribution points from the end of the previous quarter (primarily due to the addition of 3,500 US-based Wal-Mart locations).
Sales of Mac OS X "Tiger" added about $100m in revenue to Apple's quarterly results. Best selling release in company history. The install base of Mac OS X is now close to 16 million.
According to recent NPD Techworld data, Apple's iPod holds an approximate 75% of the entire MP3 player market in US. The next closest competitor to Apple holds less than a 5% share.
Apple's iTunes Music Store accounts for an 83% share of legally downloaded music. The store operated at above break-even during the quarter.
Apple ended the quarter with 4-5 weeks of Mac channel inventory, in range with the company's expectation.
Apple ended the quarter with 4-6 weeks of iPod inventory, also inline with expectations.
Gross margins during the quarter were higher than expected primarily due to strong sales of Mac OS X Tiger and Final Cut Studio.
Gross margins are expected to decline slightly during the current quarter due to a fall-off in sales of the two aforementioned software products.
Gross margins for iPods for Q3 were close to 20%. Apple hopes to keep iPod gross margins at about 20%.
Over two million copies of Tiger shipped by early June. Apple then shipped "several hundred thousand" additional copies of the OS with new Mac purchases.
Apple opened 7 retail stores during the quarter, bringing its total to 110 stores. The company reiterated its expectation of operating 125 stores by year's end.
Retail traffic rose to over 12 million for the quarter, or about 8,900 visitors per store each week.
Each retail store averaged about $5.3m in sales, up from $3.4m during the year-ago quarter.
Apple achieved the highest educational Mac revenue during a quarter in over nine years. Both revenue and Mac unit shipments rose 16%. K-12 sales grew 8%.
HP iPod shipments accounted for 8% (??) of total iPod shipments during the quarter.
The tax rate for the quarter was 32%, as expected. Apple expects the same rate for the current quarter.
During Q3 Apple saw a decrease in DRAM and flash prices. However, Apple expects commodity prices to increase during the current quarter due to typical industry trends and demand. The company is also forecasting higher than originally expected storage component prices.
Apple now holds over $7.5b in cash.
Apple is guiding earnings of 32 cents per share on revenues of $3.5 for the current quarter.
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I-pod is definatly profitable, but is only about 1/3 the profits because Ipod margins are very low. Macs (even the mini) still provide a much larger margins.
What is most important about the iPod is what it has done for the Apple brand. It is now cool to own Apple products again. combine this with the best operating system on earth and you have a recipie for mac growth.
Every measurable catagory show apple growth. 12% increase in market share 3-4 times the growth rate of the industry. Estimates of a doubling of market share in the next 18 months.
What to expect in the future:
iPod sales increases to slow - you just can't maintain 500-600% growth indefinatly. However it will be years before iPod sells get down to th 150% growth range (in most cases this would even be considered phenominal growth.
Mac sales drop to just above the industry average for the next 1-2 quarters, followed by a period of rapid increase as the new models are made available.
In five years Apple will be aproaching a 10% market share (with well over 20% of the installed base). They will also represent 50% of all software sold. Currently with 3.7% market share, 10-12% installed base, Apple accounts for some 30% of all software sold. As more developers discover that windows may have numbers, but apple users buy more software, they will support the mac, and take away Microsofts one foothold - software availability.
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2005-07-06
I suppose it couldn't it have something to do with Windows viruses. Nope, not at all. (sic)
Yes the ease of use and excellent experince friends of mine are having with their iPods has had a Halo effect. So it got them thinking about Macs. But they all site virues as being one of the main factors in _seriously_ thinking about buying a Mac. And no, they don't think there will be fewer viruses with LongHorn. Some have switched. Others are trying to decide whether to wait for the Intel Mac. But most don't even know about the Intel Mac thing at all and are just saving up for a couple of months.
Member since:2005-07-06
Most swichers I know were concerned about their Microsoft Office files; once I informed them that Microsoft sells a version of Office for Mac, and that you can easily share files back and forths, they were off like lightening down to the local Mac shop.
Apple needs to dispel the myth that having a Mac will make you incompatble with the rest of humanity.
Regarding another post, in relation to the 'coolness factor' of iPod, the interesting will be the affect on not this generation but next, the generation that will be viewing Apple, not as the Macintosh company, but as the iPod company who sells computers.
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It's all positive for Apple, Steve Jobs is finally having the last laugh, Apple could really put a small but large dint in desktop/laptop sales for home users but just not financially but culturally.
It’s like “Pirates of Silicon Valley 2: Apple Strikes Back” the movie.
Unveiling before our very eyes.
Damn I'm buying an X86 Mac next year, so I can run OSX and XP on the same box no need for another computer. *joy*
Microsoft will still be laughing all the way to the bank, with Dell and HP feeling the heat, we live in interesting times indeed.
Stormloss.
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-the repaired version, sorry.
It's all positive for Apple, Steve Jobs is finally having the last laugh, Apple could really put a small but large dint in desktop/laptop sales for home users but just not financially but culturally.
It's like "Pirates of Silicon Valley 2: Apple Strikes Back" the movie.
Unveiling before our very eyes.
Damn I'm buying an X86 Mac next year, so I can run OSX and XP on the same box no need for another computer. *joy*
Microsoft will still be laughing all the way to the bank, with Dell and HP feeling the heat, we live in interesting times indeed.
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"Damn I'm buying an X86 Mac next year, so I can run OSX and XP on the same box no need for another computer."
Hey is it possible to boot XP from a external Firewire or USB 2 drive? Because I want to have XP run on the Intel-Mac that way. Just incase XP decides to do a blue screen thing.
Soon it won't be that long and we'll see the new Mac run off the assembly line onto shelves. Can we pre-order one now??
sp29
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Just before Apples numbers were published, didn't the 'experts' say that iPod sales had dropped, and Mac sales were flat? See:
http://www.thestreet.com/stocks/troywolverton/10230748.html
These people are in charge of our financial matters? Wall Street idiots. God help us all.
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