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There is some football game on this weekend that I might have to watch to catch the commercials. We are supposed to get a little snow, and even though there hasn’t been too much accumulation this year, the ski areas are trying to make more and the Valley is busy.

I am working on my little Austin Healey and will be replacing the convertible top this weekend, too.

Thank you for reading this issue of Kibbles & Bytes!

Your Kibbles & Bytes Team,
_Don, Kali and Stephanie_

Apple reported their 1st Quarter holiday sales and earnings on Monday and it was the strongest-ever quarter for Apple. They had $57.6 billion in revenue and turned a net profit of $13.1 Billion. They set records in sales of iPhones with 51 million iPhones sold and iPad sales, too, set a record with 26 million iPads sold. While most other computer manufacturers are seeing declines in their computer sales, Apple sold 4.8 million Macs which was about 3/4 of a million more than last year’s holiday season. The really astounding numbers that I saw in the report were that Apple as sold 472 million iPhones since it was introduced, and has sold 195 million iPads to boot!

Let’s put this earnings report into some perspective. Apple’s profit of $13.1 billion is the 4th highest quarterly profit ever reported by any company in any country. As I mentioned above, the other three positions are all oil companies, but Apple holds positions 4, 5, 6, 8 & 9 on this list with all of these record profits being posted from 2012 to present. This sure sounds like a company that is about to fail and you should immediately rush out to sell your Apple stock. NOT! Despite an aggressive stock buy-back program and dividend payments to shareholders, Apple finished the quarter with $158.8 billion in cash.

While 51 million iPhones is a boat-load of iPhones and a record for Apple, it was not enough for those guys on Wall Street that make their living by denigrating the most amazing American business success — Apple. They sort of put their heads (or perhaps some other part of their bodies) together and decided that Apple was going to sell 55 million iPhones. So, when the number was 51, they ran around like chickens with their heads cut off and started selling. They did not listen as Tim Cook calmly explained that the more expensive and profitable iPhone 5s turned out to be more popular than the iPhone 5c. This meant that Apple had to make a mid-course change in the numbers of each iPhone manufactured and there were shortages of iPhone 5s throughout the quarter.

There are a few other interesting side stories here. For years, Apple had tried to penetrate into the “enterprise” or business market with the Mac. They brought out models that gave them some success, however, it was not an overwhelming win. But now, with the iPhone and iPad, the penetration is “unbelievable” in the words of Tim Cook. The iPhone is used in 97% of Fortune 500 companies and 91% of the Global 500. The numbers are even better for the iPad with 98% for the Fortune 500 and 93% for Global 500.

Apple controls 59% of the US smartphone market and 54% of North American smartphone web traffic. Numbers for iPad are even better with a 78% market share and 78% of tablet web traffic. Sell now; this company is on the brink.

I will remind you of what a “brink” looks like. I was coming up with a trivia question for our “*Small Dog Speaks*”:http://www.smalldog.com/sdspeaks radio show on WDEV and looked up (and remembered) Apple’s worst quarterly financial performance where Apple posted sales of $2.2 billion and a loss of $740 million! __That__ was the brink. Strangely, Apple’s stock went up a bit after that report.

One area where there was a true decline in sales was the iPod which fell 54% year-over-year. But that is natural, since your iPhone and iPad are the new iPods. I still use iPods in some cases but the iPod run is about over. Not all bad news on the iPod front because it was, in fact, the iPod that launched the iTunes Store, which in this quarter alone earned Apple $4.4 billion. The App store has over 1 million apps and the iOS App Store controls 67% of global revenue from apps.

Maybe these analysts were concerned about Apple’s guidance for the next three months. After all, the company predicted it would only sell about $44 billion of products and services, maintain high margins and probably not introduce new products before April. This flat, yet very profitable, prediction for this quarter had a lot of the Wall Streeters heading to the exit. But the fundamentals of the company are incredibly strong. These analyst expect a game-changing product every month and blame Apple for building a huge and commanding market share for their already great products.

Tim Cook said,

bq. __”Innovation is deeply embedded in everybody here. There’s so much of the world that is full of very complex products; we have zero issue coming up with things we want to do. We must focus on the very few that deserve all our energy. We’ve always done that and we continue to do that.”__

I think that sums it up; it isn’t just “do any product” or “you have that stupid Samsung watch.” It means making __extraordinary__ products.

At any rate, it might be time to take advantage of the analyst’s insanity as they punish Apple for its success. I think that Tim Cook and the Apple team deserve some “attaboys” and “attagirls” for another record-breaking and successful quarter. I look forward to that full pipeline of new products coming this year that will prove that Wall Street is inside out.

It’s coming kids…the big ol’ Valentine’s day! If you are looking for something to give other than flowers or chocolates, fear not — we’ve got you covered!

We had our super knowledgeable product experts gather the “*best list*”:http://www.smalldog.com/valentine/?utm_medium=email&utm_source=kibbles&utm_campaign=vday of things to give on V day. There’s even a nice coupon in there to use during checkout!

If you are interested in even deeper discounts (so amazing we can’t show them on the web!), stop by any of our “*retail*”:http://www.smalldog.com/retail/?utm_medium=email&utm_source=kibbles&utm_campaign=vday locations and check out what we have to offer.

Share the love, everybody!

If you’re a giant Spotify fan like I clearly am, you should check out a new site that has launched called “*Forgotify*”:http://forgotify.com?utm_medium=email&utm_source=kibbles&utm_campaign=kibbs. They claim there are over 4 million songs on Spotify that have not been played once. If you currently have an account with Spotify, you can head over to Forgotify, hit “start listening” and prepare to be amazed.

When I tried it for the first time, this is what I got: Punnaram Kattalle by Vilayil Valsala. A female Indian singer (I think?). Well, you’re welcome Vilayil — you have officially been listened to by one person…me! But apologies to other testers/listeners of Forgetify — now that I’ve listened to it, I guess it comes off the list!

Give it a try and see what gems you stumble across.

Next week I’ll continue my music streaming article collection with a more in-depth look at Beats Music and whether I’ll stick with Spotify or convert to Beats! Stay tuned…

_Dear Friends,_

The cold temperatures are not just up here in the north country where we are a bit more, let’s say, insulated from the impact, but also have drifted into the deep south. A little snow and some ice combined to make a serious condition with people stranded, kids trapped in schools and general mayhem for those that wondered what that white stuff was floating down from the sky. We got a few inches of snow and some more below 0 temperatures, but generally, it has been a very cold but not particularly snowy winter. Whenever I feel a bit cold, I turn on the surveillance cameras down in Key West and still see people in shorts and sandals with sun streaming in the windows.

Apple released their holiday quarter financial results. It was the 4th best quarterly results for any company anywhere at any time. The other three were oil companies but Apple posted record profits on record sales of iPhones, iPads and Macs and was rewarded with their common stock taking a beating and falling about 10%. I shudder to think that I am about to write this, but I have to agree with Carl Icahn, as he increased his holdings to near $4 Billion of AAPL, that Apple’s value is a “no-brainer” and that Apple’s long-term picture is completely unchanged and bright.

What happened is that a small group of Wall Street “analysts” decided that Apple was going to sell 55 million iPhones and when the company only sold 52 million they were shocked out of their pants and started selling the stock without realizing both that Apple had to make a quick adjustment and make more of the MORE EXPENSIVE AND PROFITABLE iPhone 5s than the 5c, and that Apple doesn’t even recognize all of the revenue from an iPhone sale when it is sold. They conservatively recognize the revenue over a longer period of time because the OS and iWork is free so they haven’t, from an accounting point of view, completely delivered the product. Apple posted extraordinarily strong financial results but when you are generating $50 billion in sales each quarter it is really hard to grow by 50%! But more, as they say on NPR’s Marketplace, when we do the numbers.

Speaking of iPhone, have you had a chance to check out our new Hammerhead Jacket iPhone case? I love our new protective case and have been using it since I received the first prototype. As you may know, the Hammerhead Case product line was named in honor of my English Bulldog, but we elected to use the Hammerhead shark as our logo. Around the time we decided to do that I was getting my animal sleeve (a tattoo that covers the arm for those who don’t know the lingo) done and I had to fit in a big Hammerhead shark. It now graces my forearm.

We commissioned an artist to design a special “Hammerflage” repeating pattern for our cases, which is our version of camouflage. We have introduced the Hammerhead Jacket for iPhone 5 and 5s in both purple or orange Hammerflage patterns. As a special for ONLY Kibbles & Bytes readers, I will send you one of each color Hammerflage for 1/2 price! They are normally $19.99, but you will get a purple and an orange Hammerhead Jacket in Hammerflage for $19.99 by clicking “*here!*”:http://www.smalldog.com/wag900001256/