Apple reports record earnings

Apple reports record earnings
Apple rewrote its record book in the third quarter as the Cupertino based firm reported profits of $3.25 billion on revenue of $15.7 billion. During the same period a year ago, those numbers were $1.8 billion and $9.7 billion respectively. The quarter included the launch of the iPad which sold 3.27 million units during the period, and the launch of the iPhone 4 which has sold 1.7 million copies in the last 3 days of the quarter, despite connectivity issues. Apple CEO Steve Jobs said, "It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple's history with iPhone 4," said Apple's CEO, "iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year."

During the three month period that ended in June, Apple sold 8.4 million iPhones, up 61% from last year's figures. One negative item came up at the conference call when it was announced that the free cases that Apple is giving away until September, to placate iPhone 4 users affected by the so-called "death-grip", will cost the company $175 million. Still, that is much cheaper than ordering a total recall of the phone which some analysts predicted would cost the company $1.5 billion. Apple's stock rose 5% after hours when the report was issued. Apple is up 20% this year and 65% over the last 12 months, bolstered by the ever growing earnings reports. Over the last three years, the company has tripled revenue and has quadrupled earnings, much of it thanks to the iPhone.

source: DailyFinance, USAToday



23. Glorfindale

Posts: 17; Member since: Jul 16, 2010

Good for Apple. I probably will not get a Mac anytime soon, or any apple product because I believe that the prices are unreasonable for these items. I'm not talking about an IPhone, but other apple products. But as long as people pay that much money for them, they will keep selling them for that much. They make a lot of money because of the markup. But as long as people are willing to pay that much for these products, they will keep selling for that much. But you can't blame a business for selling items for the top paying price... One thing they have right is their business model, for sure.

20. jpropin

Posts: 152; Member since: May 20, 2010

Apple makes alot of products that people like. It's that simple. It has nothing to do with a sheep mentality. It's not as though Apple has no competition. It's not as though you can't pick up comparable products for the same or lower price. Go to any gym and see how many people use ipods when working out. Now tell me how many companies are producing MP3 & Portable Music Players these days?..... Lots of em. It's not just iPhones that have them sh*tting green I get a kick out of people who consider everyone a sheep who does'nt like what they like and buy what they buy. They're a contradiction to their own pile of babel

16. VZWtrainer

Posts: 50; Member since: Jul 24, 2008

The most profitable restaurant in the world is McDonald's. Does that mean that they are the best? I think not. They simply offer a simplified, easy experience for their customers, much like apple.

18. dahaka17

Posts: 61; Member since: Jun 08, 2010

no McDonalds does well because it doesnt change anything everything you get thier will taste the same as the next time you go thier its for ppl who dont have taste buds... kinda of like apple

19. ilia1986 unregistered

So - what - you never eat at McDonalds?

27. omgoshphones305

Posts: 19; Member since: Jul 21, 2010

i dunno about that guy but i tried to NOT go to mcdonald's (fries always to the left!) simply because's awful...but then again at 4am, holla at your boy for a double quarter pounder with cheese, chicken nuggets, and whatever god awful greese i can muster down during the state of mind at 4am...guilty pleasures.... never the less...the point being though is that yes mcdonald's tries to offer healther choices and try to position themselves that yes even at mcdonald's you can have a healthy meal, just like how subway, which i sa fast food restaurant, positioned themselves to be healthy for you and help you lose weight apple positioned themselves to be "different" and "ahead of the curve" with their exclusive demeanor marketing, which in return is genius since the only thing that matters in business is results which apple obviously obtains. but the true question comes down to expansion and continuity. steve jobs has a rep for not being able to deal with bad press, in my opinion like a kid throwing a temper tantrum in the middle of grocery store...just awful...the products right now speak for themselves, but they can only go so far concerning with att's network (but heard some ipad users using verizon aircards and having better experiences) and their company operations management. marketing is good though...looking at the ipad commercial, with the narrator saying "ipad is beautiful..." it is simply leading the prospect along their path. but at the same time, you see verizon's droid does commercial showing what your phone can do...leads prospects as well.... marketing and products will keep apple floating, but whether or not we can see better PR from apple and its operations is a big question which in the end..will decide the fate of apple within the next decade since 4g and the android market is growing consecutively after only a year (with pr releaes and marketing in mind) of exposure and their app market already passing 100,000 from 30,000 just from this spring... battle of phone dominance continues

10. ilia1986 unregistered

Did anyone notice that little number? 175 million US$. I would like to see another company with only a handful of products that just decided to give it's customers 175 million dollars for free. I'm not talking about the whole antennae issue and whether it's justified or not. I'm talking purely from the business perspective. Who on earth cares what people will think in the long term? Steve Jobs is an old-enough man, and I think that If I were him - I would maximize profit right now - to save me and all the other employees for a very nice pension. There are 34,300 employees at apple right now. That means that Apple gave out an average 5147$ from each and every one's payment. If you were an employee in a relatively big company - would you agree to depart from 5147$ for the sake of PR? Look - I know that this is how business works - that it's important to keep the consumers happy, and make sure they come again and blah blah blah, but jesus freaking christ!! Thats 175 million US$!! I seriously seriously doubt that even if they didn't offer these bumpers for free - the company would lose 175 million US$ of profit in the next quarter because of that. Do you know what any Israeli high-tech company could do with 175 million$? Thats insane. And people even wanted them to recall the iPhone 4. I am yet to see any company on the world willing to lose 1\10th if it's quarterly profit because of any non-lethal issue with their product. Again before you all start claiming certain statements - I repeat - I'm thinking from the business perspective - not from the consumer's one. And the bottom line of every company goal sheet is to maximize profit and revenue in the short term. Because like John Maynard Keynes said - in the long term we are all dead.

13. corps1089

Posts: 492; Member since: Jan 20, 2010

Spin the #'s any way you want ilia; I don't disagree with you, but don't absolve all guilt in the name of business... The business fact is that Apple reluctantly spent the $175M to avoid much greater than $175M losses due to counteracting bad press to maintain customer satisfaction and stop loss of future sales. The bad business decisions highlighted by this mess are; implementing the external antenna despite industry trend and expert's advice, denying that there was a problem, then insisting the problem was not with the phone but with the user, then coming up with an excuse to blam ATT's network [they had it coming for a long time anyway], then taking so long to announce the 'bandaid' and not even publicizing the factory fix that they have implemented [assumedly due to their reluctance to admit a problem in the first place]. I personally would have given kudos if Steve & Apple had come out immediately and said, "My bad: cool idea that didn't quite work out. Here's the free bumper if you want it. If not, you have to admit that you will have the coolest looking phone out there with the most cache if you like that sort of thing!"

17. ilia1986 unregistered

I am perfectly aware of what you personally would have liked. You, me, and all the other consumers obviously would have loved Apple to recall the iPhone 4, and offer all their products for free for 20 years to everyone as a compensation for the gross demand to be careful in holding your phone - or buying a bumper sticker if you are unable to. Wait - did I say buying? Oops. Looks like everyone is getting one for free. Maybe it's a normal thing according to your perception for a company to compensate it's clients with 175 million US$ for a non-lethal flaw in one of it's products - but in the place where I live - such moves are absolutely unheard of. Yes, companies maintain good PR via advertising and customer service, but there are almost no compensations whatsoever - and of course not any public apologizes for any sort. And if you think that all these things have been a bad business decisions - can you then explain to me why does the iPhone 4 continues to sell so hysterically - and as Apple's CFO said - "We are selling every unit we produce"?

21. corps1089

Posts: 492; Member since: Jan 20, 2010

Its normal in business to spend $ to make even more $. Apple spent $175M to ensure that their future revenues would remain constant or increase and not decrease. Apple stands to earn much more than $175M directly as a result of spending the $175M to ensure Customer satisfaction and good will and to silence critics so that the iPhone would continue to be a popular item. Risk versus reward. Risk: losing $175M. Reward: making Customers happy enough to keep their iPhone 4 and continue to purchase Apple products, silence media critics, write off $175M as operating loss against Q3 record earnings of $3.8B [from iPad & iPhone 4], retain Apple's reputation as a manufacture of hardware. Its a no-brainer regarless of my position on Apple products or Steve Jobs and perceived arrogance. In reality, it has nothing to do with how you are told to hold your phone or buying or receiveing a bumper for free. It has everything to do with market perception and hardware/software installed base. Apple recently has had a good track record for thier business decisions, up until now. Also the media loves to tear down the giant and rail at the injustices that are manifested in stories like "antennagate". I like to jump on it since I think it exemplifies the philosophical errors Jobs and Apple have had with their products [IMHO], but I am in the minority judging by the sales [as you point out] and the profits and the stock prices. As for no compensations, do you think that Microsoft and Sony and Nintendo practically giving their console hardware away [operating at a profit loss so they can make more money in sales of game software] as an example of 'compensation' for the customers? How many do you think they would sell if they did not eat some of the cost as compensation to the customer and charged the true cost of the console? Who would buy a XBox 360 or PS3 at close to $1k? Not many; the company spends the money giving stuff away so that it can drive future revenues. For a more relevant example: US carriers subsidize the cost of expense phones in exchange for increased revenues from customers locked into longer contracts. So, it happens. Fact of business survival. My rant is that it took so long for Jobs and Apple to recognize the situation and react since there is so much arrogance in Cupertino. I don't want a free iPhone, I don't want a bumper on any phone I carry, and I definitely do not want any Apple product. Don't feel sorry for Apple because they do not have my patronage or my support, and do not feel sorry for Apple that they have had to deal with the harsh realities of the business world. Oh poor Steve! He had to have Apple give away a $30 bumper that has a 99% profit margin to appease customers! And its all over a news item that has been blown all out of proportion! And it’s not fair that it’s the media's fault when Apple is supposed to be the darling of the liberal media too! I'm just supposed to be able to sue away my competition and just rake in money for incremental updates of a product that is mostly all show anyway!

22. ilia1986 unregistered

Well first of all there is a huge difference between adjusting the cost of your product - so that it can actually sell - and giving out free stuff\cash when your product already sells hysterically. In the former case - it is necessary to even exist - and you're right that companies have been doing this for ages. In the latter case - I simply can't see the point. The sales of the iPhone 4 were strong from the beginning - and up until the 21st day - a day before the conference and the free give-away - they were still hysterical. Maybe thats why it "took so long" for Steve and Apple to react to this "situation" - cause when your product sells like crazy - the only thing you're thinking about - and rightfully so - is to how meed demand with sufficient supply. As I said - I seriously doubt that if Apple didn't give away those bumpers - they would have lost more than 175 million $. Heck, I don't think that they would have lost more than 175,000$ from several hundred angry users - who would have continued to hate Apple - just like many people on this site - no matter what they do. Steve himself said that the whole bumpers thing was just to keep everyone as happy as possible. Yes, I know that it's unusual to see a CEO of a huge company just give out gifts without any business-related reason to it - but I guess it sometimes happens too. In addition - in the current situation - no matter how much cash does Steve spend - he can't silence critics. Especially not the irrational ones (Gizmodo as a popular example). He IS wrong in something - you can't keep everyone happy. And those that are unsure of whether they love or hate Apple - or are plain indifferent to them - I highly doubt a 30$-worth bumper case is going to make a difference.

29. corps1089

Posts: 492; Member since: Jan 20, 2010

Well, you have a very convincing and strong argument with the sales of the iPHone 4s: they are selling non stop and other markets want them just as bad as proven with recent sales overseas. It is a hedge bet to spend $175M against untold future losses that can not be mention, but I think that Apple is at teh cusp of a huge change in market position. 3 years from now we could look back and say this is the nadir of Apple's dominance in the stock and cell phone markets: Android is huge and has more momentum than the I phone ever did, Apple's market capitalization now exceeds Microsoft, so they now have the big target on their back, multiple other OS's are catching up to iOS4 in gui execution and reliability, and the nascent 4G networks are emerging on other carriers that Apple is not on yet. Big changes are ahead for Apple and they will need to move fast or see their market leading position erode. you are right; $175M worth of irate iPHone 4 and ATT customers are not going to return their equiment and contracts. But this will influence future decisions that buyers make and there are other sexy handsets that challenge the iPhone 4 right now let alone the near future fo the next 6 months. You cannot measure how many future customers decide to purchase the competition on a non ATT network, but I am guessing that it could easily exceed $500M in a worst case scenario. This includes not only loss of hardware sales, but loss of revenue generated form the carrier kickbacks for exclusivity and then the huge% of profits that Apple skims off the APP store and music sales that would be lost if the full installed base is not realized, then you would have to consider greater R&D costs for getting a new model out quicker than the previous schedule if the phone were not as well received as a successor would need to be deployed more quickly, then Apple would have less leverage with ATT to wrest a mammoth lucrative deal out of the carrier since the less cache the phone has the less an exclusive deal to carry it is worth. If I were Apple, I would not want a single buyer pausing a moment to think of any reason why they should ever consider another phone. beacuse the moment they do... Apple COULD come crashing down. $175M [if every user even takes their free bumper] is a cheap price to pay to protect 3.8B in earnings per Quarter. Besides, Apple probably engineered the thing to cause the stock to dip[ so they could buy more back prior to the Quarterly earnings report...

31. remixfa

Posts: 14605; Member since: Dec 19, 2008

illia, you have to put the 175 million into context. It seems like alot but its not. in context: $170 million is what they average PER DAY in profit. that number is based on giving away silicones at RETAIL of $30.00. Not at cost which is prob less than $0.03 per unit. Its cheap molded silicone thats made a hundred thousand at a time. The bad taste in future customer's mouths are gonna cost alot more than 175 million.

32. ilia1986 unregistered

As I said - I seriously doubt that. In my country - companies find ways to improve their PR among both new and old customers without spending even 1\1000th of that sum. Because in the end of the day - most people buy a product based on what it does, what it is, and how much it costs, and the average joe couldn't care less if Apple admitted about some shmang about the antenna or not. And if he gets a 30$ bumper for free - yay for him - but that won't change his mind if he didn't want to buy the product in the beginning - nor would it affect his future purchases - because memory in customers is short-lived. A company may cheat, blatantly lie to it's consumers, disregard safety policies, and even refuse to service some customers just cause they want - and people will still buy from them like mad. For example - we in israel have 3 carriers. All 3 have roughly the same percentage of users - one a but less, one a bit more, but nothing major. And all 3 have at least several times cheated or disregarded consumers - sometimes by mistake, and sometimes without purpose. And if one is to look a bit more deeply - one can find a zillion posts on forums of how company X mistreated someone, or didn't do what it promised, etc. But as I said - they still have the roughly same percentages of customers despite that. And that is laregely due to company PR efforts. And let me tell you - these efforts don't come nowhere near anything that apple does - not even on a proportional basis comparison. And if you might have thought that the israeli consumer is a patient, careless man - think again - because our consumers and customers as the worst and greediest of the kind. Same here. I believe that Apple will get through this. And could have gotten through this without giving every 4 year old kid with an iPhone 4 a free bumper. It might be 0.03c for them to make - but they still lose 29.97 for every one of them they give for free. I base my opinion on the irrefutable fact that up until this very moment - the iPhone 4 continues to sell hysterically, and on what I've written above in describing the situation in Israel when it comes to customer service and PR.

9. deejh

Posts: 34; Member since: Apr 14, 2010

Antenn-aid colorful bandages for the iphone 4 are available now 6 pack for $4.99. Go Gett'em sheep. What a F'ng joke. I would never buy and continue to suppprt a FAILED Product. SHEEP!!

15. trentsinmypants

Posts: 324; Member since: Jan 29, 2009

Hey, I still support HD DVD :D

6. NOVAinc

Posts: 99; Member since: Jun 24, 2010

Pretty amazing indeed, looks like those guys at Apple do know one or two things about selling a lot. Looks like it won't stop anytime soon too. I'd like to see some other reports from other companies too. Good quarter for Apple and Sony Ericsson, congrats to those guys.

5. Mateo8326

Posts: 472; Member since: Jul 15, 2009

Hate on Apple all you want, but their Apples a day don't keep the customers away

7. scottmbolt unregistered

Antenna's everyday keep Apple's users at bay!

26. omgoshphones305

Posts: 19; Member since: Jul 21, 2010

haha that comment just burned my screen on my computer

3. deejh

Posts: 34; Member since: Apr 14, 2010

As long as there are sheep in the herd, steve "God's" pockets will continue to get fat and the world will have the perception that apple is better.

4. JackFace

Posts: 190; Member since: Nov 03, 2009

Damn Moron... Tell me you are not in some herd... think hard, and I mean really hard. You are not unique when it comes to phones an technology. There are only so many you can choose from. Sure, you can customize your phone (for the most part, especially if you don't own an iPhone), but you are in a herd of some sort, and in the end, someone's pockets are getting fat. Get over yourself.

8. deejh

Posts: 34; Member since: Apr 14, 2010

Like I said, SHEEP!!! You make one comment and they just go off. LMAO!!!! They must protect the herder, Steve God himself.

11. *HOVA*

Posts: 564; Member since: Dec 11, 2008

Damn moron is for sure. Try as you might JackFace, you just can't fix stupid.

12. JeffdaBeat unregistered

Everyone wants to use this Sheep metaphor...but think about it. Toyota has a huge following and their earnings and sales dropped when their was a major problem with their product. So much so that American automakers started overtaking Toyota in sales. If the average consumer is a sheep...then why didn't they blindly follow Toyota? Apple had a major flaw in their phone. Although not life threatening, it still was a flaw that impacts the function of the phone. Apple does well because they make great products. Indeed, they are not perfect, but their track record has been better than most electronic makers out there. You can't take that away from them.

14. deejh

Posts: 34; Member since: Apr 14, 2010

We have been blessed with a HOVA sighting. Sheep!!!!!!

24. *HOVA*

Posts: 564; Member since: Dec 11, 2008

Stupid is as stupid does apparently.

25. omgoshphones305

Posts: 19; Member since: Jul 21, 2010

you don't see toyota fans arguing with nissan fans on blogs at this caliber do you?

28. tallica05

Posts: 93; Member since: Dec 26, 2009

Really, Forest Gump??? -1 HOVA -1

30. Fanboys Suck

Posts: 609; Member since: Dec 12, 2008

Absolutely right.

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