Apple 4Q Profit Jumps 47% On Higher Mac, IPhone Sales | Hacker News Reader

Apple 4Q Profit Jumps 47% On Higher Mac, IPhone Sales

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89 pointssant0sk145 comments

Who killed the link to the primary source non-subscriber content with actual numbers?

http://www.apple.com/pr/library/2009/10/19results.html

Quarter:

    Macintosh sales: 3.05        up     17%
    Ipod sales:      10.2        down   8%
    Iphone Sales:    7.4 up             7%
    Revenue:         $9.87b    (up from $7.9b)
    Profit:          $1.67b    (up from $1.26b)

And earnings of $1.82/share, way above analysts' predictions of ~$1.42.

For context, the 2008 iPhone sales (whole year, not a quarter) were $1.84B. And now it's $7.4B in one quarter. Is that even possible?

http://blogs.eweek.com/applewatch/content/corporate/apple_fi...

Here's 2009 figures in a similar table: quarter not whole year: http://www.betanews.com/joewilcox/article/Apple-Q4-2009-by-t...

That's 7.4 million sold, not $7.4 billion in sales.

Ah, thanks. Checking the links I posted:

iPhone sales go from $1.84B per year to $2.3B per quarter. Still pretty good.

(EDIT: rather bizarrely, that's precisely a five-fold increase.)

Clicking through Google gets rid of the pay wall:

http://www.google.com/url?q=http%3A%2F%2Fonline.wsj.com%2Far...

Time for them to come out with the next big thing, before they become the captives of their own success. (Has that happened to Google? Definitely happened to Yahoo.)

Their iPhone is their current 'next big thing', with iPod sales declining, the iPhone is what is keeping their profits up.

The curious thing is that the only reason iPod classic sales are declining is because Apple beat its own product with the iPhone and iPod touch. They're their own best competition.

I'm not sure if I can agree 100% with this statement. While Apple is long touted as a company built on innovation, they can probably extract profits without any new innovations for a while. (A while being 2-3 years, doesn't mean to stop trying though.) And it's true that iPod sales decreased 8% over last year's Q3, they expected this because of increasing iPhone sales.

I believe while other hardware companies are racing to the bottom in prices, Apple is able to extract premium on its hardware and this is really reflected in the gross margin and bottom line.

Could Apple produce a 600$ laptop? Sure. But it is not worth the temporary gains they'd see. A low end line would cannibalize the margins of their other computers. The quality would probably suffer and it would hurt their brand equity. Apple could introduce an economy line of computers and take over way more of the market, probably grow their sales by 25-40% in a year. To me, that is a strong statement... in that they could but they don't.

I think one thing that Apple will have to contend with is the image. As iPhone's and Macbooks become more and more mainstream, the elitism behind it is decreasing. They will need to do some kind of segmentation (and price discrimination). I wouldn't be surprised if they came out with a higher end Pro series priced around 2500.

Full disclose, I do own a few shares of AAPL. So I believe the future is bright for Apple.

I also believe the future could be bright for Apple. Even if they've peaked, or soon will peak, they'll be profitable for a good, long time. That's not my point. My point is that they can keep on the upward side of the peak by coming out with another game changer.

I fully expect them to.

As iPhone's and Macbooks become more and more mainstream, the elitism behind it is decreasing. They will need to do some kind of segmentation (and price discrimination).

Elitism is easy to maintain. Just make the packaging fancy and charge lots of money! The ability to charge a premium also enables innovation, however. You can charge more for your new, different thing, and if it's truly different then it probably does cost more since economies of scale aren't fully in play. Also your new thing can be truly new and different -- this enhances the caché and lets you tap into status-seeking early adopters.

Apple seems to be in the space where Mercedes used to be -- able to charge a premium for well engineered and truly (though conservatively) innovative high-quality products. The danger is in too much power in the marketing arm. If the company succumbs to the temptation to sacrifice quality and innovation for better marketing, then it is done for. If that happens, Apple will become a vacuous status symbol, and the real engineering innovation will come from someone else. A clear and present danger! (Many would say it has already happened.)

Yep. The day Apple is fully ran by MBA's and the Marketing department is the day it peaks. This will probably be around the same time it comes out with an low end laptop. The power right now is Apple's marketing arm is backed up by technology and it is really in the pricing sweet spot.

The incentive structure of the marketing department is almost designed to produce short term thinking. So of course marketdroids have a bad name. They're basically incentivized to kill the goose that lays the golden eggs.

I wonder if there's a better way we could structure this?

You could base bonuses on overall sales and product quality over a 3-5 year horizon. Otherwise it's easy for a hardware company to suicide by pushing crap (coughRCA Thompsoncough)

Apple is currently run by 'marketing department.' It's just a good one.

'Marketing department' doesn't mean the advertisers that have nothing to do with anything else any more then 'engineers' doesn't mean techies in the back room that have never seen a user and only work when you can tell them exactly what to do. That's just what they seem like when they don't do a great job.

Deciding not to have any competitor below the 30-40th price percentile. Deciding to always have a coherent product line. The decision to focus on users wiling to pay outright for things instead of focusing on companies. These are all marketing decisions more then they are engineering ones.

What I've observed is that a lot of marketing departments are killing or at least slowly poisoning their company. I suspect that you have to get to somewhere between "good" and "great" to escape this.

Hmm. It seems that I've never been in a company that had even a good marketing department! (Until now.)

Hve you observed engineering departments, research departments, IT, Accounting, HR, Comms, legal... doing a bad job? Usually, most of these are not critical enough to "poison" a business, crappy HR or IT is annoying, but usually doesn't kill a company. Anything bad enough can, but if a department is far away from how the company makes money, good enough is usually good enough. Sometimes Marketing isn't important enough to kill a company either. Often it is though.

The types of companies that get discussed on HN are usually the kind where both marketing & engineering are important enough to do a lot of damage and important enough for everyone to have an opinion about them.

You can top that up with the fact that the stuff that usually gets praise or abuse (eg product development) can often be claimed or pawned off by both engineering and marketing.

Who is responsible for the ipod nano video camera thing? Engineers?

Sometimes things are obvious. Google has awesome marketing, but the original dynamite was creating the awesome search engine and the momentum caused by gmail & maps & such. Facebook is, as far as I can tell, a marketing achievement. In both cases it was important that the non dominant factor didn't mess things, but it was a hurdle.

Apple or MSFT? You could argue both or neither. If you wanted to teach how to be like them, the classes would probably be called things like 'strategy' or 'leadership.' I'm not sure that any department has a monopoly here.

If you have to choose between company A with lousy engineering but good marketing and company B with great engineering and lousy marketing, history shows company A is a no-brainer.

"The day Apple is fully ran by MBA's and the Marketing department is the day it peaks."

And that day was sometime in the early nineties. Fortunately their descent from that peak was reversed before too late.

It's never been about elitism for Apple, that's just the way the people who don't buy Apple perceive it.

Apple has used a slogan like the following for several of their products: "X for the rest of us", where X is some product or service that they deemed were previously too difficult to use. That's not elitism, it's the opposite of it.

The elitism charge doesn't really vibe with the other general charges that Apple products are toys, either, nor that their users are stupid and need dumbed-down devices.

I think the next big thing will be when the iphone is not locked into AT&T only. The growth will surely accelerate when it is more easily available.

I'd be quite interested to see what the International breakdown of those 7 million iPhones are. Because the iPhone is available on a lot more than 1 carrier. (And it is available for the other 5.7 billion people in the world.

The problem is that it's often (or always?) limited to only one carrier per country. That sucks.

Not true, most countries offer both carrier-locked and unsubsidized (unlocked) iPhones.

Alright, I guess I'm just lucky to be in Finland then.

Besides Germany and Hong Kong, where else is unlocked iPhone available?

Here it is offered by most carriers.

Where's "here" ?

Australia for one.

http://www.telstra.com.au/mobile/phones/iphone/

http://www.optus.com.au/iphone

http://www.vodafone.com.au/personal/iphone/index.htm

https://www.virginmobile.com.au/shop/iPhone.aspx

http://www.three.com.au/iPhone?intcmp=W0001

Or you can buy unlocked direct from Apple:

http://www.apple.com/au/iphone/buy/

Australia

Not always. In Australia, it's available on all the major carriers - Telstra, Optus, Vodafone and 3 plus some virtual carriers who resell service from the majors.

In the UK, Apple's deal with O2 is coming to an end and both Orange and Vodafone have indicated that they will offer it. T-mobile have said they're sticking with the G2 as their preferred smartphone. Ha, ha, good luck with that[1].

[1] T-mobile are being acquired by Orange so whatever they say about anything is subject to change... Can't imagine their new overlords will be happy about them dragging their heels.

Not sure how common that is outside of the US. In Sweden it's available on all carriers, I think. (It was exclusive to one carrier for the first year or so.)

I concur. That's what I'm waiting for.

It's too soon: we've just begun year 3 of a roughly 5 year cycle.

Apple's 10% market share is actually a financial advantage now that application support isn't such a big issue. Whereas it would be hard for Microsoft to grow beyond the overall market for PCs, Apple has plenty of room to grow.

Definitely. They have 10% of the OS market, 10% of the hardware market & good margins on both. Growing from 10 - 15% is admirable, but not as hard as growing from 70% to 105%.

"Growing from 10 - 15% is admirable, but not as hard as growing from 70% to 105%." I just emailed this around the office. Hilarious.

Ugh, this morning I almost put some capital in Apple stock. Now it's up 12% in after hours trading. Investing is stressful as hell. I'm coming to the conclusion that lacking a large amount of money or extraordinary skill, $/hour is far better working a part time job.

I dabbled with investing in Apple stock a few years back and it turns out I don't have the stomach for it. I hear ya.

it's up ~$12, or ~6%.

"Investing" in the short term is simply gambling. It can be a lot of fun, but the average person is (as you note) better off working.

My mom is still kicking herself for not buying Apple when it was trading for $2 (~'97). I knew as soon as Steve Job's stepped in things could only get better.

It's the same feeling you get when you forget to buy the lottery ticket the day they call your number.

Whoopee. Wake me up when you an interesting story to report.

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