Apple posted quarterly sales numbers of a record $43.6 billion, posting a profit of $9.5 billion or $10.09 per diluted share. This compares to the same quarter last year where Apple posted revenue of $39.2 billion and $11.6 billion profit. As you look at these numbers, keep in mind that last year in this quarter, the iPad with Retina Display was released and it was a huge hit.
Apple’s profit margin declined this quarter primarily because of the huge popularity of the iPad mini, which has a lower price and lower margins for Apple. Apple sold 37.4 million iPhones and 19.5 million iPads during the 3-month period. Tim Cook didn’t put it this way, but that is one boatload of iOS devices.
I recently participated in a career day for a couple of local high schools and I asked the kids how many used Macs. A few kids raised their hands, so I asked how many use iPads, and more raised their hands. Then I asked how many use iPhones and nearly all the kids and the teachers raised their hands. I had them hold up their iPhones, and it was a great scene.
Back to the numbers — Apple sold 4 million Macs and that was flat year-over-year. That is not surprising with the overall market for personal computers declining as people move more and more to mobile devices, but Apple bucks the trend by maintaining a flat sales curve. I hope that some new Macs are coming so we can push that curve up a bit! As Tim Cook said, “our teams are hard at work on some amazing new hardware, software, and services, and we are very excited about the products in our pipeline.”
Apple added another $12.5 billion to their cash stash and as I mentioned earlier, increased their dividend and share buy-back program significantly. In fact, the share buy-back program is the largest of any company ever.
The iPod touch continues to be about 50% of iPod sales, and really should be called the iPad micro or something because it is just a smaller iPad.
As those “analysts” look at Apple, they seem to categorize the company as a hardware company and while that is true, Apple is primarily a software and content company that makes devices to utilize that software and play the content. The iTunes store, as an example, is now 10 years old and bills about $4 billion a quarter — which is $16 billion a year. Let’s put that into some perspective. I can remember a meeting at Apple about 10 or 12 years ago when an Apple exec told us that his goal was to make Apple a $5 billion company by the end of the year! This is a continued story of business success. Apple has exceeded everyone’s expectations, and continues to innovate and create tools that we use every day.
Congratulations to Apple and their team for another great quarter — we can’t wait to see the surprises in store for us this year!