The earnings call detailed the results and acting CEO Tim Cook along with CFO Peter Oppenheimer answered some of those questions. We have the highlights with per case analysis below:
- iTunes revenue hit $1.4 billion. iBookstore offers more than 100 million books. The wowing 27 on the year rise shows that Apple is on the right track, but while the company doesn't break down how much of that stunning number comes from apps and how much comes from music, we can be relatively confident that software made for a large chunk of the sum. Cupertino is expected to introduce subscription plans this year, which might further boost this number and give the company one more reason to pride over Android.
- iPhone sales revenue surged 113%, while total revenue from handset and accessory sales increased by 126%.
- 88% of Fortune 500 companies are testing or deploying the iPhone. 75% of them consider the iPad. That's arguably one of the most important announcements made in the earnings call as it shows that the business is replacing BlackBerries with iPhones and the mobile landscape is changing with a rapid pace. If this trend progresses, we'll certainly see Apple cement its positions, while Nokia with its E series and RIM with its 'Berries will be the biggest losers.
- Apple added three major carriers supporting the iPhone this quarter: Verizon, SKT and Saudi Telecom. Cupertino is constantly looking to add more, but even now the iPhone is available on 186 carriers across 90 countries. Tim Cook said that while Verizon was a key element of the handset's success in the quarter, AT&T reported incresed activations as well.
- LTE iPhone: “The first generation of LTE chipsets force a lot of design compromises with the handset, and some of those, we are just not willing to make.”
- iPad 2 suffered from “the mother of all backlogs.” Despite that Apple managed to roll out significantly more iPad 2s and is confident that it'll “produce a great number of iPad 2s during the quarter.” Tim Cook added: “We’re thrilled with the iPad’s momentum.”
- “We sold every iPad 2 we made during the quarter.”
- other Mac devices: iOS is pushing Macs in the corporate sector and that's one of the main reasons for the growth in Mac sales.
- Tim Cook couldn't be more optimistic on Apple's positions in regards to Android as he quoted comScore data about iOS, which proves the platform outgrows Android by 59% in the U.S. “And so this is an enormous percentage,” Cook added. The acting CEO also noted the importance of fragmentation in the Android world: “I think the user appreciates that Apple can take full responsibility for their experience, whereas the fragmented approach turns the customer into a systems integrator and few customers that I know want to be a systems integrator.”
- Peter Oppenheimer: “In terms of the June quarter, I would expect to see a significant year-over-year increase in sales.”
The majority of the following questions focused around the tragic tsunami in Japan and how it could affect sales. In a nutshell, Apple didn't seem overly concerned about components shortages if the situation remains relatively stable. Even more so, the acting CEO assured everyone that supply chains will not be affected. So while the iPad sales might be slightly under expectations, Apple only had a couple of weeks to sell the second-gen tablet in the US and only a couple of days to sell it across the 25 countries it launched it just before the end of the quarter. With more countries getting the iconic tablet and the convincing tale of the numbers, it seems there is little room left for nay-sayers as Apple gears up for the next quarter.
Is it magic? A part of it might be, but it seems more like gradual evolution to us. After the groundbreaking iPhone, Apple has been building on its existing portfolio and even the iPad - as magical as it seems - was considered a large iPhone. But even if it was magic - we'd know some if its ingredients: Apple has continuously and steadily managed to improve over one single brand whether its the iPhone, the iPad or the iPod; it's products carry an identity like none other and it has the tight integration with services like iTunes that finish the cycle.