Apple Posts Q2 Profits
Listening in on their Q2 -2010 Financial Results
conference call, we can say that Cupertino's got a lot to be proud of
this time around: It's been one heck of a quarter for them with Q2
profits at an all time high, with the company's overall profits driven
by a stronger product mix, lower costs and fixed cost leverage from
higher than expected profits in the march quarter. The March quarter's net
profits totaled $3.07 billion. That's a lot of loose cash floating around.
Apple says that their priority for the profit is to maintain it as
usable capital.During the March quarter, Apple shipped 8.75
million iPhones, beating their own expectations by 1.75 units. As for
the company's computer sales, they managed to ship 2.94 million Macs
out to consumers, once again smashing the company's sales expectations.
Overall profits were driven by a stronger product mix, lower costs and
fixed cost leverage from higher than expected profits in the march
quarter.Even the iPod sales, which took something of a minor
beating last May are showing signs of a rebound, with Apple shipping
10.89 million units. Not too shabby, especially when you considering the
fact that they only expected to sell 9 million. The strong numbers once
again secured the iPod's title of being the best selling MP3 player in
the world. Take that, Zune.Apple sold 8.75 million iPhones in the
last quarter, with 5.5 billion dollars made from carriers payments. Why
did they do so well? Well, Apple increased the handset's reach by
offering the phones to an increased number of carriers in 88 countries
around the world, with eight carriers added in key countries in Asia and
Europe. Existing carriers preformed well according to the mobile device
manufacturer. For example, for the first half of the fiscal year, mainland China showed profits of almost $1.3 billion. This is up over
200% from the previous year. Additional iPhone profits have also been
found over the past year, as a number of iPhone markets have moved from
exclusive to non-exclusive. In a cautious tone, Apple says that this
does not mean that they will be opening up the use of the iPhone for all
networks everywhere: They are assessing iPhone network exclusivity on a
country-by-country basis.Sales results for the iPad are very
positive. Reviews from pundits and consumers alike have been
'outstanding;' a fact that is obvious to anyone trying to purchase one
outside of the United States. Interestingly, Apple says that in the last
quarter there was no impact on iPod or Mac sales because of the
impending arrival of the iPad. Whether or not the iPad will cannibalize
the sales of iPods or Macs moving forward is a question that will only
be answered with time. The company says that they feel strong about
their ability to meet iPad demand, and are in the process of 'adding
capability' to meet consumer demand for the device.In the
area of Apple retail, Apple Store profits are up 22% over one year ago.
One half of Macs sold in Apple Stores were purchased by customers who
had never purchased a Mac before. Apple says that they expected that a
large number of the units sold were due to the product line refresh and
educational purchases. 47 million visitors were hosted in Apple Stores
during the quarter. Over 700,000 attended personal training sessions,
with 600,000 taking part in Apple's One-on-One program. Whoa.Even
the red-headed stepchild of the Apple product family, AppleTV, has
enjoyed a 34% year by year increase in profitability as of the end of
the March quarter. However, Apple still considers it to be a 'hobby,'
with actual unit numbers being humbled by the avalanche of sales seen by
the company's other products.On the topic of component pricing,
Apple was as always, mum. They neither confirmed nor denied that
component costs would affect the per-unit pricing of their products.
There was also no word on whether iPad or iPod touch users will be
paying for the 4.0 software upgrade.To sum up, Apple's made
themselves a boat load of money, and the outlook for higher profits
moving forward is looking ever brighter.For those of you
interested in hearing the financial scuttlebutt firsthand, the
conference call will be hosted on iTunes and on Apple's website tonight
by approximately 5pm Pacific time.
http://www.maclife.com/article/news/apple_posts_q2_profits
