Apple Q408 results out: 6.9m iPhones sold, record Mac sales UPDATE: Steve answers analysts' questions

Hey, turns out that people seem to like a little thing called the iPhone 3G. Apple just announced that it's sold 6.9 million of 'em during its financial fourth quarter, beating out the 6.1 million total first-gen iPhones sold in the previous five quarters -- and beating RIM's total sales this quarter, which Apple seems excited about. Of course, that represents worldwide availability in 51 countries vs the initial US-only launch, so it's not totally unexpected that the numbers are up, but it means that Apple's hit its goal of 10 million iPhones sold in 2008, which should cause some celebration in Cupertino. Apple also seems pleased with Mac sales, which are up 21 percent over a year ago to 2.6 million -- more than it's sold in any other quarter ever. All that combines with 11 million iPods sold for a total profit of $1.1 billion on revenues of $7.9 billion -- that's a lot of scratch. Still, times are tough, so Steve, do you have a seemingly-cautious statement about the US economy that also doubles as a smug shot at your competitors? "We don't yet know how this economic downturn will affect Apple. But we're armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt." Yeah, we thought you might.

PS.- The analyst call just finished with a special appearance from Steve Jobs, who took questions. Head past the break for our semi-liveblog transcript of the good parts.

Update: Steve's on the call. He says that Apple has 5,500 apps in the iPhone App Store, and that Apple should sell its 200 millionth app tomorrow -- "unlike anything we've seen in our careers." He's calling Apple customers the "smartest, more product-aware customers in the market," and that economic hardships won't cause them to switch to cheaper machines, just delay their purchases, since "none of our competitors can deliver products in this class." In addition, Apple plans to invest and "innovate through the downturn" as it did the last time the economy went sour.

Update 2: Taking questions now -- Steve says that the iPhone could be considered an entrant into the netbook market, since it can browse the web (uh, sure), but that Apple's looking at the "nascent" netbook market and it's "got some interesting ideas there if it does evolve."

Update 3: Hitting harder on the price aspect of netbooks, Steve says, "We don't know how to make a $500 machine that's not a piece of junk, and our DNA won't let us do it." He also says that he thinks Apple TV will remain a "hobby" in 2009, and totally shot down a question about touch / tablet computing.

Update 4: That's it! In response to a question about different form factors for the iPhone, Steve said "Babe Ruth only had one home run, but he hit it a bunch of times," and that he didn't think software developers would want to target lots of different platforms -- probably indicating that the current iPhone design isn't changing for a while. He also said that he didn't think Apple's competitors really understood the idea of a phone as a "software platform" -- a pill that requires a pretty big dose of RDF to swallow, since both Google and Microsoft probably beg to differ.

[Jimmy Jones @ Oct 21st 2008 5:14PM]

My guess is those Mac sales are those that mostly watched the I'm Mac and I'm A PC ads who thought Apple never does evil.. :-)

[Ignatius @ Oct 21st 2008 5:30PM]

From what I've seen of Apple's current advertising trend, they're more of a "Microsoft sucks, buy a Mac, you dumbass." commercial.

[Quix @ Oct 21st 2008 6:11PM]

"There's no chance that the iPhone is going to get any significant market share. No chance." - Steve Ballmer, April 2007

[eggothewaffle @ Oct 21st 2008 6:21PM]

Steve: "none of our competitors can deliver products in this class."

He's ignoring the awful and/or overpriced peripherals right? There's a reason why my lab uses Dell 30" screens with their Mac Pros and not Cinema Displays (even though they use the same exact panel) and why I always sell off the awful input peripherals they include with our Mac Pros to Apple fans who don't know any better.

What is Logitech doing right that Apple isn't? Can Steve hear me through that turtleneck of his?

[Ellianth @ Oct 21st 2008 7:13PM]

I wonder how many of the free apps count as sales.

[refriedbeans19 @ Oct 21st 2008 7:55PM]

not really, i just wanted to try something different for once, and own a computer that will last a good amount of years. i mean, damn, i still have a iMac G3 up and running just fine, with OS 9.2.2. installed :D

[Frankie @ Oct 21st 2008 8:56PM]

WOW, 6.9M people have not heard about the G1? They need to market it better I guess, because there's no way anyone who knows about the G1 would purchase this. :p.

I couldn't resist, I have no real gripe with the iPhone though (it's innovative device indeed!). Rock on!

[Aaron @ Oct 21st 2008 9:21PM]

Frankie, the G1 is hideous.

[Ender @ Oct 21st 2008 9:32PM]

G1?!?!?! HAHAHAHAHAHA. The iPhone runs CIRCLES around that thing. Slide out QWERTY keyboard!?!? That was popular in 2003.

[rekoil @ Oct 22nd 2008 4:51AM]

@Aaron and Ender,

The G1 isn't hideous, and slide-out keyboards remain a big selling point for most business people. The iPhone is an amazing device, I won't deny that, but the G1 remains a good competitor.

Regards,
iPhone owner

[ilh @ Oct 22nd 2008 12:53PM]

From a developer point of view i'd take the G1 over the iPhone.

[konshuss @ Oct 21st 2008 5:21PM]

okay fanboys... commence fapping!

[no, thank you @ Oct 21st 2008 5:37PM]

u mean fanmoy?

[zorg @ Oct 21st 2008 5:21PM]

Wait! How can this be? I heard from some very reliable haters that iPhone 3G will only appeal to a few fanbois! Does this mean there are over 12m fanbois?

I heard Ballmer say that the next Winmo (or maybe the one after that) will put iPhone out of its misery. Plus I'm supposed to mention the Mac Tax to receive my astroturfing payment so, Mac Tax, FTW!

[nikster @ Oct 22nd 2008 1:03AM]

Yes. It means there are 12M fanboys out there who have been brainwashed into buying an expensive, over-hyped product that has nothing behind it but media hype. And you could get a real phone with a 5MP camera much cheaper.

/irony

I love my iPhone.

[Marcos @ Oct 21st 2008 5:22PM]

hmmmm....
AAPL 91.49 -6.95 (-7.06%) 81.05B

[farfisa @ Oct 21st 2008 5:33PM]

So, are you saying 'buy,' 'sell,' or just 'panic'?

[Appleboyz @ Oct 21st 2008 5:43PM]

Price After Hours 17:39 $99.37

So what's your point?

[Bart Lee @ Oct 21st 2008 5:46PM]

It's over $100 now. I guess his point was what a screaming buy AAPL was at the bell today.

[CraigJ @ Oct 21st 2008 5:51PM]

that or he doesn't know how to find after hours numbers...

[Mark Anderson @ Oct 21st 2008 5:27PM]

Good results, however it's interesting that the rate of growth of Mac sales seems to be slowing and the numbers sold missed the Street's estimates of 2.7-2.8 million. That said, the same buffoons only thought the 3G would sell 5-6 million this quarter when anyone with half a brain knew it would sell a lot more than that.

What's also interesting is Steve's statement that they sold more phones than RIM. Well, yeah, Steve you did, but then you also sell the iPhone in more markets than RIM (I think) and you didn't tell us what the sales rate is. Somehow I doubt you're going to do that next quarter.

But a good quarter nonetheless.

[Samurai Jack @ Oct 21st 2008 5:53PM]

They did miss, but not as badly as Engadget suggests. They have a typo in their results. Number of Macs sold should have been 2.611 million.

I don't see what investors would have to complain about. Deferred sales because of anticipation of the new Macbooks explains the shortfall pretty well. And to be debt free with 25 billion in cash on hand going into a recession? Yeah, Apple looks pretty good just now.

[Mark Anderson @ Oct 21st 2008 6:10PM]

Yeah I knew it was 2.6 million which is still low. I think Apple has expanded it's market share but I'm not seeing it getting too much higher - maybe 15% US and possibly 6% global but that ceiling is starting to look quite close now.

[Quix @ Oct 21st 2008 6:15PM]

"Somehow I doubt you're going to do that next quarter."

You don't think the iPhone will outsell the Blackberry during the *holiday* quarter of all quarters? Really???

[MacVicta @ Oct 21st 2008 6:32PM]

"Steve you did, but then you also sell the iPhone in more markets than RIM (I think)"

Then you thought wrong.

The BlackBerry is available in far more markets and on far more carriers worldwide than the iPhone.

It has the advantage of both CDMA and GSM variants, enabling availability on every carrier in the US, its biggest market. The iPhone is GSM and AT&T only in America.

Not to mention the price advantages and number of models. A BlackBerry Pearl can be had for free while the iPhone is still relatively expensive at $199-$299.

For the single iPhone to outsell the entire BlackBerry lineup with its many advantages is nothing short of amazing. I and most others didn't expect it to happen so soon.

[Mark Anderson @ Oct 21st 2008 6:32PM]

Nope. I don't think it will.

Hey, I could be wrong but RIM are releasing new models and Apple aren't. The mobile phone industry is brutal and has a rapid sales curve.

[L @ Oct 21st 2008 6:36PM]

Both the Bold and the Storm are finally released in RIM's biggest market, and in case of the Storm, in a lot of other markets, with a heavy marketing push. No, I wouldn't be surprised if Blackberries outsold the iPhone next quarter either...

[Mark Anderson @ Oct 21st 2008 6:40PM]

@MacVicta

RIM sell in more countries but I'm not sure about profitable markets. Appreciate the point though.

[WickedEast @ Oct 21st 2008 10:51PM]

RIM 6.1M vs Apple 6.9M, and RIM didn't benefit from sales of newly introduced product for the full quarter. Just saying.

[Badonkadonk @ Oct 21st 2008 11:10PM]

@WickedEast
MY thoughts exactly... RIM at least is forthcoming in that they say they "ship" 6.1M units in the last quarter (and 5.4M in the quarter before that) - they also indicate net new subscribers, which indicates the breakdown between new unit sales and either upgrades or material still sitting on a retailer's shelves. I'd like to see how much of this 6.9M is "sold" because it is now sitting in AT&T warehouse - how much of that was upgrades to people who bought the gen1 device? I mean, yes, good for Apple to have a great quarter, but to call out RIM specifically as someone they "out sold" is clearly a gauntlet being thrown down. With RIM introducing 3 new phones this Q it will be interesting indeed to see what *their* holiday sales are going to be like.

[rattyuk @ Oct 21st 2008 11:12PM]

@ Mark Anderson

"I think Apple has expanded it's market share but I'm not seeing it getting too much higher - maybe 15%"

So the company is going to grow by 50% in the next year. Show me a PC company that is going to do the same? By your math you are a complete IDIOT.

[rattyuk @ Oct 21st 2008 11:18PM]

@Badonkadonk

"I'd like to see how much of this 6.9M is "sold" because it is now sitting in AT&T warehouse "

You obviously don't understand what is required during a financial conference call, these figures have to be back up financially otherwise Apple would be open to suing by shareholders or at the very least nuked by the SEC for lying.

[John @ Oct 22nd 2008 12:06AM]

if they're sitting in an AT&T warehouse, then Apple still sold them, they're just being dead weight to AT&T.

[Mark Anderson @ Oct 22nd 2008 3:16AM]

@rattyuk

Pay attention. Apple's ceiling is about 15% as in 'that's as high as it goes'. Who said anything about next year?

As for growth, Acer grew 47% last quarter.

Fuckwit.

[SKI @ Oct 21st 2008 5:37PM]

"He's calling Apple customers the "smartest, more product-aware customers in the market,"

He means Apple customers are dumb enough to fall for lame complements, and product-aware enough to buy any Apple product no matter what the cost or problems (Air/MacMook).

[Oli D @ Oct 21st 2008 5:42PM]

no hes saying, apple customers are making me fuckloads of money!

[happy_penguin @ Oct 21st 2008 6:39PM]

Yes I agree that the 'compliment' is silly. Also, in my opinion the Macbook Air is a joke especially considering the price. But the new Macbook is cool as hell. It demonstrates what a joke the Air is, because at $500 less to start, you get a machine that is faster, has a bigger drive and a CD/DVD burner built in and it's nearly the same size.

[Jamus @ Oct 21st 2008 5:38PM]

I am wondering if "sell its 200 millionth app tomorrow" includes actual free apps or just paid apps.

[Major4Play @ Oct 21st 2008 5:39PM]

"And $25 billion of cash safely in the bank with zero debt."

Cash is safe in the bank now ? When did that happen ?

[CraigJ @ Oct 21st 2008 5:52PM]

since deposits are insured. No one to date has lost their deposits.

[Chris @ Oct 21st 2008 5:54PM]

Yea seriously, I work as everyone and there mother has been paying with $20's lately. Also everyone uses Debit cards now too so they dont get overages.

(I think they all took there money out of the banks)

[oZ @ Oct 21st 2008 6:00PM]

It's only safe if they have multiple accounts with no more than $100,000 each. ;)

[who? @ Oct 21st 2008 7:12PM]

Who the hell keeps high ranking this ijit?

[Pete @ Oct 21st 2008 9:33PM]

fdic insurance was raised to $250k in the recently passed bailout package

[fieldcar @ Oct 21st 2008 5:39PM]

I find the mac ads entertaining, but entertaining like how ellen degeneres is to a straight man.

[Dominik Loeffler @ Oct 21st 2008 5:43PM]

the "smartest, more product-aware customers in the market"? Very funny. You just need to watch TV, see the ads, and buy from Apple. No need to be smart or aware, and that is exactly their targeted market. Apple is a great company with an awesome leader. But Apple products consistently lag behind in features and/or extensibility, and so far the company couldn't win me for a purchase yet.

If you care most about the flashy user experience, good, then Apple is a good choice for you. But not for the smart and aware people who don't care as much.

[Samurai Jack @ Oct 21st 2008 6:02PM]

Of course you're "smart and aware". You're the one making the statement. You couldn't possibly be stupid and clueless.

Perhaps it's just that you aren't the customer Steve is talking about. Not everyone who uses a computer has to have the latest bleeding edge technology or the greatest expandability or every available option under the sun. Sometimes freedom from choice *is* what you want...

I suspect Steve knows the market he's selling to better than you do. Consider for a moment that perhaps you're not part of it. Not because you didn't choose Apple, but because Apple didn't choose you. Just as they don't choose the folks looking for he cheapest possible computer. They choose not to target them and don't make products for that space.

[Quix @ Oct 21st 2008 6:24PM]

"But not for the smart and aware people who don't care as much."

Does "smart and aware" mean seeing the perfectly rational logic in spending a few hundred extra bucks on a product that will give you a far better user experience over several years (and many thousands of hours) of use? Does "smart and aware" mean not buying a computer that has to be scanned for spyware and viruses several times a day? Does "smart and aware" mean buying a computer that can run every major computer OS on the planet on a single box, giving you access to the best applications on all platforms? Does "smart and aware" mean buying a small-footprint computer that doesn't sound like a vacuum cleaner, doesn't light up my office with neon lights, and doesn't cover my desktop with cables?

Yeah, it does. I'm smart and aware. And I don't buy (or build) PCs anymore. Been there, done that. Now I spend the extra money on Macs. And it's worth every penny.

Not for you? Great. Move on.

[utahnkid @ Oct 21st 2008 7:30PM]

Can you people just shut the fuck up now? I mean do you need any more proof? You can't sit here and read a story about Apple bending over their competition and dominating them then go on and bitch about how badly they do business and not look like an idiot. It's over, they won. Give up. APPLE MAKES GOOD PRODUCTS. End of story.

[EricC @ Oct 21st 2008 11:36PM]

@ Samurai Jack:

"Not everyone who uses a computer has to have the latest bleeding edge technology or the greatest expandability or every available option under the sun."

Yeah...those people are called "Apple customers." ;)

(For the record, I own a 1G touch =)