Apple tallies record revenue on Mac, iPad, and iPhone sales

Philip Michaels
21 July, 2010
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Record Mac sales and a strong debut for the iPad helped Apple generate US$15.7 billion (around $17.8 billion) in sales and a profit of US$3.25 billion ($3.7 billion) during the company’s fiscal third quarter. Apple’s sales figures, revealed as part of the company’s third-quarter earnings announcement overnight, mark a quarterly record.

Compared to last year’s third quarter, Apple’s revenue rose 61 percent from US$9.73 billion ($11 billion). Profits rose nearly 78 percent from US$1.83 billion ($2.1 billion).

On a per-share basis, Apple earned US$3.51 ($3.97) per share, up 75 percent from the $2.01 ($2.27) it earned over the same period in 2009. The company’s results beat analyst expectations of US$3.10 ($3.51) a share and US$14.74 billion ($16.7 billion) in revenue.

Record Mac sales

Apple sold 3.47 million Macs during the three-month period ended 26 June, 2010 — another quarterly record for the company that topped the previous high sales mark by 100,000 units. Mac sales increased 33 percent over the 2.6 million units Apple sold in the third quarter of 2009. Apple chief financial officer Peter Oppenheimer noted that Apple’s 33-percent sales growth topped the 22-percent growth rate market research firm IDC projects for the overall computer market.

As would be expected in a quarter that saw Apple update both its MacBook Pro and MacBook product lines, portables drove Mac sales for the three months ending in June. Of the 3.47 million Macs sold, 71 percent were laptops.

Apple also touted double-digit growth for its Mac business in all its geographic regions, with iMacs and MacBook Pros driving those sales. In addition, Oppenheimer said, Apple’s education business recorded record sales for Macs despite many schools and universities facing tighter budgets.

iPad launch

The third quarter also marked the first full quarter of sales for the iPad, Apple’s new tablet. Apple said it sold 3.27 million iPads during the quarter.

Apple saw US$2.17 billion ($2.5 billion) in recognised revenue from iPad sales during the quarter. The tablet is currently shipping in 10 countries, and Apple plans to introduce the iPad to 9 more countries on 23 July.

iPhone growth

Apple sold 8.4 million iPhones in the third quarter, a 61 percent jump over last year’s figures. The iPhone 4, which debuted in the waning days of the third quarter, made up about 20 percent of those sales — or more than 1.7 million units. Apple called the iPhone 4 launch the most successful product launch in its history.

Apple saw recognised revenue from its handsets of US$5.33 billion ($6 billion) during the quarter, up 74 percent from last year’s figures. Apple says the iPhone has a sales value of US$5 billion ($5.7 billion), for an average selling price of US$595 ($673).

Combining the sales of the iPhone, iPad, and iPod touch, Apple sales there are now 100 million devices running its iOS mobile operating system.

iPod falls

iPod sales fell during the third quarter of 2010. Apple sold 9.41 million iPods, a drop of 8 percent from the 10.2 million music players Apple sold in the year-ago quarter. The iPod segment has seen declining growth for some time now, particularly outside of the holiday shopping season. During the fiscal second quarter, iPod sales dipped by 1 percent while the 2009 third quarter saw a 7 percent decline in sales.

Apple isn’t exactly wringing its hands over the decline in iPod sales, though. The music device remains the top-selling MP3 player internationally and continues to command a 70 percent market share in the US. More significantly to Apple, the iPod touch continues to grow — Apple says sales of that product were up 48 percent from the year-ago quarter, leading to a 12 percent increase in average selling price for the music player. Apple’s iPod segment saw quarterly revenue of US$1.5 million ($1.7 million), a 4-percent increase from last year.

As for the iTunes Store, Apple reported more than US$1 billion ($1.1 billion) in revenue, a growth rate of 25 percent year over year. The mobile app segment of the store has grown to 225,000 apps, with 11,000 specifically built for the iPad. Users have download more than 5 billion apps from the App Store, Apple says.

Retail figures

Apple ended the third quarter with 293 Apple Stores, after opening seven more during the three-month period. Four of those new stores were opened in the US, one was in Canada, and two opened in Australia (Bondi and Perth).

Retail stores generated US$2.58 billion ($2.9 billion) in revenue during the quarter, jumping 73 percent from the year-ago numbers. Apple sold 677,000 Macs via its retail stores, compared to 492,000 last year; half of the Macs sold at Apple Store were to customers new to the platform, Apple says.

Apple plans to open 24 stores during the fourth quarter. In addition to an outlet in Shanghai, China, that opened earlier this month, noteworthy store openings include ones in Paris, London, and Apple’s first two stores in Spain.

Apple ended its fiscal third quarter with US$45.8 billion ($51.8 billion) in cash and short-term investments. That’s up from US$41.7 billion ($47.2 billion) at the end of last quarter.

The quarter ahead

For the fiscal fourth quarter ending in September, Apple expects revenue of US$18 billion ($20.4 billion) and earnings per share to come in around US$3.44 ($3.89). Analysts were predicting sales of US$17.03 billion ($19.3 billion) and earnings of US$3.82 ($4.32) per share in advance of Apple’s announcement.

Apple said it would defer revenue during the quarter as a result of its decision to offer free cases to iPhone 4 customers. Last week, the company made its free case offer after reports of reception problems related to the placement of antennas in the iPhone 4. Oppenheimer put the cost of the case giveaway at US$175 million ($198 million); Apple will recognise the cost of those cases as they’re delivered to customers.

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