This morning Apple announced it’s first quarter financial results during an hour-long conference call with analysts, which, by any a">

Mac, iPhone Grow Record Profits

Tim Grey
19 January, 2011
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This morning Apple announced it’s first quarter financial results during an hour-long conference call with analysts, which, by any account, were impressive but conspicuously free of speculation about CEO Steve Jobs’ health.

The company posted record revenue of $26.74 billion and record net quarterly profit of $6 billion, up from f $15.68 billion and net quarterly profit of $3.38 billion in the previous corresponding quarter.

Not unexpectedly, the massive growth was driven by the iPhone’s immense popularity, 16.24 million of which were sold in the quarter, up 86 per cent on the previous period. More surprising was the increased demand for Macs, sales of which were up 23 per cent on the previous year to 4.13 million computers – and in our own region, the Asia-Pacific, Mac sales jumped a massive 68 per cent.

Intriguingly, during the conference call with Tim Cook, who’s taken over as Apple chief for as long as Jobs remains ill, the Chief Operating Officer continued to accentuate the importance of Mac to the company’s offering.

The interim Apple boss also commented that while there was indeed some cannibalization of the potential Mac market due to the iPad’s release, the tablet device was more likely to have a ‘halo effect,’ introducing non-Apple users to the company’s PC platform, much as the iPod did in the early 2000’s.

Commenting on the 23 per cent increase in Mac sales, Cook quipped, “If this is cannibalization, then it feels pretty good.”

While the COO wouldn’t give specifics on the product pipeline for fear of revealing ‘the magic of Apple,’ he did point out that as Mac products have a relatively low share of the entire PC market, there’s a huge opportunity for growth in the category.

Despite the iPhone’s intense popularity, he also highlighted that the device has a relatively low share of the entire smartphone sector, a category that according to Cook is ‘growing like a weed.’

There was a tacit acknowledgement that Apple was indeed developing a successor to the iPhone 4 (and beyond), while acknowledging that the company still had supply-side problems meeting demand for the device.

iPad sales reached 7.33 million for the quarter, with Cook so confident about the tablet’s supremacy he took time to denigrate its competitors. According to him, there’s ‘not much out there’ in the way of tablet devices – the two categories that are available are either Windows devices that are ‘big, heavy and expensive’ or those that run Android, an OS ‘not designed for tablets.’

“Then you have the Android tablets, and the variety that are shipping today, the OS wasn’t really designed for a tablet, and Google has said this. This isn’t an Apple view,” he opined. “You wind up having a size of tablet that is less than we believe is reasonable for providing a real tablet experience: basically you end up with a scaled-up smartphone, which is a bizarre product in our view.”

Although the COO was nonplussed with pretenders, he did mention that Apple ‘wasn’t sitting still’ in terms of its own tablet development process.

Business users are also clearly in Apple’s crosshairs, with Cook talking up the company’s commitment to developing devices for the workplace.

“Consumerisation of enterprise is one of the megatrends that’s occurring,” said Cook. ‘You could end up running your entire business off an iPad.’

Cook went on to observe that:

The places we could go were unimaginable just a few months ago. Enormous potential. iPad started shipping in April, and we’re already up to 80 percent of largest companies deploying or piloting. Unheard of in my dealings with enterprise. Generally enterprise is much smaller, much more cautious, and uses products that have been on the market a lot longer. I think to everyone’s credit, they’ve seen the value, and they’re really moving fast. I think we’re just scratching the surface right now.

Among the Apple products it was only the humble iPod that took a dive, with sales slouching seven per cent to 19.45 million units for the quarter. Perhaps Apple should bring back the trackwheel?


2 people were compelled to have their say. We encourage you to do the same..

  1. Frank Wade says:

    I think there may be an error in the last paragraph of this article. The sales decline was to the iPod, not the iPad

  2. AMW staff says:

    Hi Frank – you’re right, it was the iPod whose sales declined during the quarter, not the iPad. That was a typo – stupid fat fingers! Tim

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