Apple Q408 results out: 6.9m iPhones sold, record Mac sales UPDATE: Steve answers analysts' questions
By Nilay Patel 
posted Oct 21st 2008 5:09PM
posted Oct 21st 2008 5:09PM
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.
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.. :-)
From what I've seen of Apple's current advertising trend, they're more of a "Microsoft sucks, buy a Mac, you dumbass." commercial.
"There's no chance that the iPhone is going to get any significant market share. No chance." - Steve Ballmer, April 2007
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?
I wonder how many of the free apps count as sales.
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
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!
Frankie, the G1 is hideous.
G1?!?!?! HAHAHAHAHAHA. The iPhone runs CIRCLES around that thing. Slide out QWERTY keyboard!?!? That was popular in 2003.
@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
From a developer point of view i'd take the G1 over the iPhone.
okay fanboys... commence fapping!
u mean fanmoy?
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!
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.
hmmmm....
AAPL 91.49 -6.95 (-7.06%) 81.05B
So, are you saying 'buy,' 'sell,' or just 'panic'?
Price After Hours 17:39 $99.37
So what's your point?
It's over $100 now. I guess his point was what a screaming buy AAPL was at the bell today.
that or he doesn't know how to find after hours numbers...
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.
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.
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.
"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???
"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.
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.
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...
@MacVicta
RIM sell in more countries but I'm not sure about profitable markets. Appreciate the point though.
RIM 6.1M vs Apple 6.9M, and RIM didn't benefit from sales of newly introduced product for the full quarter. Just saying.
@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.
@ 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.
@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.
if they're sitting in an AT&T warehouse, then Apple still sold them, they're just being dead weight to AT&T.
@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.
"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).
no hes saying, apple customers are making me fuckloads of money!
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.
I am wondering if "sell its 200 millionth app tomorrow" includes actual free apps or just paid apps.
"And $25 billion of cash safely in the bank with zero debt."
Cash is safe in the bank now ? When did that happen ?
since deposits are insured. No one to date has lost their deposits.
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)
It's only safe if they have multiple accounts with no more than $100,000 each. ;)
Who the hell keeps high ranking this ijit?
fdic insurance was raised to $250k in the recently passed bailout package
I find the mac ads entertaining, but entertaining like how ellen degeneres is to a straight man.
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.
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.
"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.
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.
@ 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 =)
"But Apple products consistently lag behind in features and/or extensibility"
Features are unimportant if the item is unusable... like every windows PC a year after you buy it.
Apple products are elegant, functional and intuitive.
I love how people will point out the negative about the iPhone or iMac without also looking at the FAR LARGER list of negatives for the products they're backing.
iPhone is a netbook? Well my kaiser is more of a netbook, since it actually has a keyboard... and I can install any software I want, rather than only apple approved, INCLUDING additional browsers, and I can actually write on it for long periods of time and save my work... and i can copy and paste... And I can tilt the screen and have it sitting on a table...
Think what you will, but my MacBook has mostly sat gathering dust since I bought an iPhone. I have an iMac for desktop use and a MacBook for mobility, but my iPhone seems to fill 90% of my mobility needs quite well.
YMMV.
Well, I think the point is that for many people the iPhone can provide a more than adequate and enjoyable mobile experience. Not everyone, but many people only need email+web, some PIM apps, and some games while on the go. Some people need a more comfortable keyboard, and something that has a more traditional computing experience. Maybe they need to take notes in a classroom setting, or want to sit down for awhile on the go and do some writing. An actual netbook works best in that scenario. I can understand that. A lot of people don't do this very often though, and would trade off some functionality for something that is streamlined, and has an overall better multimedia experience.
i have my mac mini for my everyday needs.
my ipod touch is my mac when i'm out of the house.
I represent one of those iPhone 3G sales and one of those Mac (iMac) sales. Life is much better now! I hope Apple continues to do an outstanding job on there products and software.
i represent about 10 of those sales...
here comes the list
MacBook Black
MacBook Air
Imac
MacMini
Ipod 160Gb (broken hooray)
Ipod 80Gb
Iphone 3g 16Gb
Airport Extreme N
I might as well just piss my money into Steve's pocket.
Same here... Just picked up a 3g one day after my Verizon contract expired and absolutely love it. There will be a lot of haters here but Apple has been doing a lot of things pretty darn well.
If changing the brand of your consumer electronics noticably affected your quality of life....well there can't be much quality there to begin with, can there?
Thanks for that unnecessary personal attack.
Not surprising. Nearly everyone in my university is now carrying a 3G along with their black MacBooks. College kids eat up all things Apple. There's is actually a student organization dedicated to Apple products! Talk about fanboy!
Of course, I'm not far behind. I still own my 2G iPhone, but I'm still eying a Javelin.
So now that Apple is a big big success, when do we start tearing them down?
Signed,
Pop Culture
I knew it, Apple is going to enter the netbook game as well...
Anyway forget about it I just checked.... www.iBook.com allready taken
I typed in iCrook.com since it rhymed. Its for sale =O
Wow, how insightful...iBook.com is taken. Did your stellar research note the fact that iBook was also the name of Apple's predecessor line to the Macbook for seven frickin' years?
lol iEye everyone hates you
how can you be a fanboy when you don't know shit about the company you have such a massive boner for?
maybe when they use some of that money in the bank to give us to quality components not top quality styling...
"Two M keys aint good enough for ya?"
-Steve Jobs
Hmmm. . .and if you read the comments on this site, the 6.9 million shouldn't be possible without copy-and-paste. . . Just more proof that the commenters here are out of touch with the majority of consumers.
The real question here is when are we going to get Samsung Instinct sales numbers. . . that thing rocks.
6.9million still isn't a majority of consumers.
@sarig
And just exactly WHAT is your current suppliers numbers?
Dear god Jobs has his head stuck up his arse...
"He's calling Apple customers the "smartest, more product-aware customers in the market,""
Seriously you just have to take a look at the new Mac adverts to see that buyers of Apple products are some of THE least aware customers in the market. And iPhone a netbook? No, just no in so many thousands of ways no.
I used to respect Jobs quite a lot, but his recent antics, product *cough* downgrades *cough* launches and comments aimed at the computing community has just caused me to throw any and all of that out the window.
Seriously Jobs, you have one of the best possible businesses to build upon, one that creates good looking products, one that people look towards for innovation. But recently all you've been throwing out are minor upgrades or total downgrades in products and you continue to sell this at huge price inflation with no reasonable cause over your competitors.
I'm sooo gonna get down ranked for this :)
Nope, you're getting 'ranked down' for trying to state your rant is going to get you ranked down, hence somehow kidding yourself that since you predicted it, you still win. I'm getting bored of reading that sort of comment so frequently, it adds nothing, hence you get 'ranked down'.
Yeah you're going to get down ranked because you are being ridiculous.
Complete downgrades? Oh come on, I am not an apple fanboy (I do have a 3g, only because it's a slick easy to use no fuss phone) but come on, you're being dumb.
It's like u've been reading my mine for the last 16 months!
the funny thing is that Juxterium didnt get low ranked and the guy below him yelling at him for saying he will be low ranked got low ranked
Well steve jobs maybe you should hire me, i have a $600.00 pc that out bench marks most of the macs you carry and i run osx86 leopard
"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" whatever
Here are my scores to prove it
http://browse.geekbench.ca/user/digitallysick/profile
You have a super thin, super sturdy laptop, with an 11" or less screen, and decent resolution, for $600? Because that sure looks like a desktop PC, and I'd bet serious money that you're one of those guys with a window in the side of their case.
@oz
Yes thats my desktop, you want my geekbench for my netbook that runs leopard to?? It was also under 500.00 dollars.
Who cares what my pc looks like? lets see your mac scores , and compare performance vs cost
the point is... Mac is not simply about performace to cost...
you may call it whatever you like, but it's more about the non-quantifiable elements of them which PC supporters seem to ignore and Mac users seem to love.
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."
Translation:
We cant ring enough money out of selling $500 pieces of junk, We rather sell $1200.00 ones from the same Chinese factory!
As much as I despise saying it, he does have a very good point on just that. The main divider between current netbooks and umpc's, is that the first are crappy and cheap, while the latter are feature packed and expensive.
Features and cheap is a lovely dream, but not really all that realistic.
Exactly if they made a computer for 500 dollars no one would buy the only computers they make. Honestly the new macbooks should be less than 800.00 , no firewire, less batter power , the list goes on
What are the specs of this $500 laptop you speak of?
Apple screws up, haterz drool over their failure. Apple does great, haterz still find things to be negative about. No way to win for Apple :p 'Course, I guess that is the *raison d'etre* of haterz.
Does anyone else wanna try saying that Apple isn't gonna sell 10 million iPhones this year? Please speak up now so that I can make fun of you easier.
Does anyone know if Jobs said anything about the Mac Mini being discontinued ?
I hope not.
He's a smart business man, but I disagree about $500 computers (netbooks) being junk.
They are great for business people that travel and kids, grandparents ... anyone with about $500 to spend.
The Intel Atom works great and OSX loads easily on the Dell Mini - why - because Apple customers are smart :)
I don't think he's being entirely unreasonable with his netbook comment.
Given Apple's current design methods (aluminum and glass galore, reducing the amount of plastic, etc.) it would probably be very difficult for them to release a sub-$500 product that stayed true to their current standards. If this were back when the original MacBooks came out, then sure, they could have made a plastic-shelled 8.9" laptop for that price, but I just don't think they can do the same with the direction they're going.
If you look at the current crop of sub-$500 netbooks, they're all pretty plastic-y and somewhat cheap. Which is fine for what they are - I'm not trying to bash them here, I love them. But Apple's current philosophy won't let them make something similar.
I think that if Apple eventually comes out with a netbook, it'll most resemble the HP Mini-Note. But Apple won't make the sacrifices that HP did to get a model under $500 (512MB RAM, 4GB space, terrible processor). It'll most certainly have a hard drive like that of the Air, 2GB RAM, and a dual-core Atom. And I'll be damned surprised if it comes any cheaper than $800.
And I'll still probably buy one.
Oh, and damn, the Mini-Note really looks like the new MacBooks, doesn't it? Or the new MacBooks look like it. The similarities are striking.
"We don't know how to make a $2,500 machine that's not a piece of junk"
Fixt!
"Our customers are the smartest, more product-aware customers in the market."
I normally wouldn't laugh at this, but given how much of an asshole he is to the PC side of the fence in his other quotes, despite his ENTIRE EFFING PLATFORM running on products whose originators owe their success not to Apple, but to the PC industry...
...I'm disinclined to do anything but laugh at that. Apple customers? Product saavy? Ha ha ha!
"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."
None of their competitors can deliver products in their class because Apple doesn't allow the use of OSX on non Apple branded machines!!!
"We don't know how to make a $500 machine that's not a piece of junk"
The HP2133 starts at $499 and is an awesome, well built machine. So, You can't do something like that???
The 2133 is awesome and well-built, except for the fact that its processor is slow to the point of it actually being painful to use.
A 2133 with an Atom processor would be most excellent, though.
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."
No. Your DNA has you selling it for $600 instead, and for 4 years you forced laptop buyers to fork over $1300 to get a DVD burner.
Lets put osx86 on a similarly priced laptop and then compare performance vs cost
Apple was torn down for most of the 90's. Remember, this is the second time Apple has been a "Big Deal"
Did anyone at the press conference ask him how to get that "Apple Software Update" off your PC hard drive?
I find the Dell Mini 9 to be a very decent quality netbook at under $500 - doesn't feel cheap, so I would say Apple has to do more work to satisfy it's customers.
They could aim for a target price of $799, which is $200 cheaper than the MacBook "Classic".
I feel a tingle inside. lol
Those statements he said, make me a proud iPhone owner.
So, basically they achieved their 10M iPhone sold before the year is over,and the holiday season didn't even start yet. I can't wait for results of Q4 and see how many they gonna sell as a whole.
Bravo, Steve!!!!!!!
Not sure what to make of the AppleTV "hobby" comment. I was hoping for some kind of update, but it doesn't sound likely for next year. I guess they're working on some bigger guns for 2010?