Apple records another record quarter -- $1.61B profit

Apple just announced its quarterly results, and it looks the brutal economy isn't bruising the fruit at all -- the company posted a record $1.61B profit on $10.17B in revenue. Adjusted to reflect the subscription accounting Apple uses for the iPhone and Apple TV, that's $2.3B of income on $11.8B of revenue. Sales were all strong -- Macs were up nine percent to 2.5M sold, iPods up three percent to 22.7M sold, and iPhones were up 88 percent to 4.3M sold. If you're keeping track, that means Apple's now sold well over 10M iPhone 3Gs on top of beating its goal of 10M total iPhones in 2008, which is pretty tremendous. Acting CEO Tim Cook and CFO Peter Oppenheimer are taking questions from analysts now, we'll let you know if anything interesting happens -- as you'd expect, the first question was "How's Steve?" and it got basically a non-answer.

2:18PM - After rattling off Apple's core goals and beliefs, Tim Cook said that "regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well." Neither him or Peter would speak to succession plans or comment on Steve's health.

2:22PM - Apparently no immediate plans to lower iPhone's $199 pricepoint, since Apple still feels "years ahead of the competition," though Tim agreed that the iPhone's price is "elastic" like iPods, as opposed to the static Mac pricing.

2:30PM - When asked about netbooks, Tim said "we're watching that space" but feels like products in that market are too slow and cramped, and that people won't be pleased. "But we'll see." Apple has some ideas for the space, and is aware of the crazy sales numbers, but doesn't like the "inferior" consumer experience that's there right now.

2:31PM - Apple TV sales are up 3X, partly thanks to iTunes movie rentals. Still considers it a "hobby," but will continue to invest in the market

2:33PM - No comment on Snow Leopard progress. "We're very excited by this next release, but we have no launch date at this time."

2:45PM - Mac growth was two percent in the US year-over-year, but 16 percent internationally, and over 20 percent in several countries.

[Kris120890 @ Jan 21st 2009 5:32PM]

Stop spamming. He knows the iphone isn't going to verizon. He just wants you to go to his site.

[Snitch @ Jan 21st 2009 5:36PM]

Late this year or early 2010 as long as Verizon abandon the idea of stripping it's WiFi off and to bundle their crap software.

[7egend @ Jan 21st 2009 6:18PM]

Sorry but the Social you mocked up for the documents is for someone of a much younger age than Steve Jobs.

Nice try though.

[techenthu @ Jan 21st 2009 5:20PM]

Impressive

[ImaYam @ Jan 21st 2009 5:41PM]

iPod=$200
Steve=$The Company

[Anonymouse @ Jan 21st 2009 8:12PM]

Another huge success for Appleture Science
Maybe some of that profit can be a bonus to the programmers who are still alive.
-whistles "Still Alive"-

[Flashpoint @ Jan 21st 2009 8:47PM]

If I'd have been apple, I'd have made the iphone $300 instead of $200.

They'd have still sold just as many.

[Phoenix @ Jan 21st 2009 5:19PM]

Subscriptions for apple = pure profit O.o

[CraigJ @ Jan 21st 2009 5:42PM]

What subscriptions?

If you mean media sales you are completely wrong. Apple gets about 30% of the revenue for the songs, shows, movies and apps. The studios and developers gets 70%.

Apple builds and maintains the iTunes online store infrastructure from that 30%, which is probably not a small expense. Apple probably, realistically speaking, sees about 10% profit on the sales from iTunes. Far from "pure profit O.o"

[Douglas Bailey @ Jan 21st 2009 5:53PM]

Well how about this for subscriptions... mobileMe. If the current results are till Dec 31st then I'm picking all the mobileMe revenue will show up in the next set of results.. I mean how many might have singed up for the free trial around July 11 when they got their iPhone and after all the free extentions I'm picking payday for Apple started on Jan 7th. That's when my mobileMe fees were due for my phone purchased July 11. If only 5% of 10Million iPhone owners start to pay for their mobileMe at maybe $100 USD a year, that would be $50M. And then iPod Touch users can use mobileMe too right? Maybe 5 Million people like their push(?) technology and pay Apple $500,000,000 this quater. Knew I should have found money for shares.

[shugg @ Jan 21st 2009 6:15PM]

hot damn!!!!!!!!!!!!iphone is 40% of apples business.talk about a depression-proof product.this is so hard to believe.if palm pre dethrones iphone,it'll be pretty darn impressive to say the least.wonder if it will.,?can it ?will it?

[spam_free @ Jan 21st 2009 6:08PM]

"Subscription" refers to iPhone and AppleTV sales in which they (Apple) promises to offer free "improvements" over the commercial life of the product, in this case, 2 years. The revenue from these products are "subscribed" over this period and will not be recorded until 2 years from the sale. This has nothing to do with subscription media.

[CraigJ @ Jan 21st 2009 7:08PM]

Apple records subscription revenue *and* expenses for the iPhone and Apple TV monthly over 24 months. I was specifically refuting the pure profit point. If the OP meant subscription revenue model, which I doubt, that statement makes even less sense. Deferred revenue and expenses != profit.

If he meant media subscriptions, those don't exist.

If he meant Mobile Me, which I overlooked, then it's not pure profit, but it's very high margin I'm sure.

[Phoenix @ Jan 22nd 2009 11:17AM]

@spam free

Yeap. Apple TV and iPhone. The original iPhone revenue is pure profit, since the costs were covered by the high POS price.

[iphonerulez @ Jan 25th 2009 4:28PM]

The iPhone sold well by default. No worthy competition. Most people had to decide what not crappy handset to buy and the only remaining choice was the iPhone. Apple might not be so lucky in 2009, what with all the new competition such as the elegant Palm Pre. Hehehe.

[Arno @ Jan 21st 2009 5:20PM]

Recession? What recession?

[Samboini @ Jan 21st 2009 5:51PM]

Your hairline?

[Geoffrey Sperl @ Jan 21st 2009 5:55PM]

@Samboini: Hey, I resemble that remark!

[finnith @ Jan 21st 2009 6:06PM]

Don't you mean "resent"?

[phil @ Jan 21st 2009 6:38PM]

Folks, what you see is the tragedy of the Humor Impaired.

Imagine. These people travel through life never understanding a sly reference, never getting the subtle irony of a situation, not even understanding *puns*. It sounds too incredible, but sadly, these people are around us everyday. Many don't even realize they are suffering from this affliction.

Fortunately, there is hope for the Humor Impaired: You.

Yes, for less than a dollar a day you can adopt a Humor Impaired Person. You will receive your own personalized packet that includes a packet with your adopted HIP's picture, specific ailment (i.e. too literal minded), and the training regimen they will undergo. You will receive periodic updates of the jokes, riddles and humorous anecdotes used to treat your HIP. With luck, you may even get a report of your HIP chuckling his first chuckle.

One day, your HIP will come to realize "I resemble that remark" is *not* a misuse of vocabulary, but an old, tired joke.

[Mitch @ Jan 21st 2009 7:10PM]

@finnith

Nope he meant resembles. As in his hairline resembles that remark.

[KezMondo @ Jan 21st 2009 7:42PM]

OH WOW. POSTING IN FAIL THREAD.

[OneLove @ Jan 22nd 2009 9:52AM]

...The recession in your pants.

[GeekPI @ Jan 21st 2009 5:21PM]

I wonder what the spread was on sales of their desktops vs. laptops. Last I read, their desktop sales were off nearly 40% from the same quarter last year.

[oghowie @ Jan 21st 2009 5:23PM]

I'd have to assume some of that is because consumers are moving to laptops vs desktops?

[CraigJ @ Jan 21st 2009 5:44PM]

off about 20%, not 40%. Peter said laptops accounted for close to 70%, I think. Maybe he said 60%. Whatever, it's a lot.

[GeekPI @ Jan 21st 2009 5:47PM]

CraigJ - Not according to the Wall Street Journal, December 16th 2008

"Sales of Macs in U.S. stores last month declined 1% from a year ago, while industry-wide PC sales rose 2%, according to research firm NPD Group Inc., which tracks retail sales.

NPD analyst Steve Baker blamed a 35% drop in sales of desktop Macs"

http://online.wsj.com/article/SB122938758242108907.html?mod=testMod

[CraigJ @ Jan 21st 2009 5:52PM]

I don't really care what the WSJ gives as an estimated performance number when the CFO just reported the actual numbers.

[GeekPI @ Jan 21st 2009 6:05PM]

CraigJ - The WSJ reported that Apple desktop sales in the 4th *quarter* were down 35%, compared to the previous quarter. The Apple CFO today said the *year-to-year* sales of desktops were down 25%. That's the difference.

[Eric @ Jan 21st 2009 7:05PM]

That's based on NPD numbers. Although NPD gets data from a lot of companies, they do not receive any actual data from Apple, so their "research" is just a bunch of fancy guesswork.

[Fanfoot @ Jan 21st 2009 7:48PM]

71% laptops. Highest ever.

[Anonymouse @ Jan 21st 2009 8:14PM]

Are you guys seriously arguing about the percent rate drop of desktop sales Vs. laptop sales 'according to The Wall Street Journal?' WOW.

[KarlW @ Jan 22nd 2009 4:26AM]

@Fanfoot: Is that something to be proud of?

I'd love a desktop Mac, and I hate Apple for not making a proper one in about a decade (iMac doesn't count if you already have a big ass monitor).

[Hugh @ Jan 21st 2009 5:25PM]

I realized this when I was in the Apple Store (NYC) around Novemer 2008. Place had hundreds of people in it at all times. Still, didn't expect these types numbers. Quite impressive.

[Goatee Man @ Jan 21st 2009 5:27PM]

http://www.engadget.com/2009/01/16/nintendo-sets-us-sales-records-in-2008-collects-200/

I'm starting to think people really like shiny white gadgets.

[joe23521 @ Jan 21st 2009 5:29PM]

You mean like the G2?

[John @ Jan 21st 2009 5:32PM]

Sorry, what color was the iPhone again?

[Kris120890 @ Jan 21st 2009 5:33PM]

See its doing it again. I reply to one person and it goes to someone else.

[iKurt @ Jan 21st 2009 5:32PM]

Apple deserved it! They are the most innovative company... Apple leads and others follow.

[Mike @ Jan 21st 2009 5:34PM]

... as witnessed by people named "iKurt"...

[erwin @ Jan 21st 2009 5:32PM]

Again? Apple seems to be a money-making machine even in these bad times!

[GeekPI @ Jan 21st 2009 5:33PM]

A big congrats to Apple to posting positive numbers during a recession. What is interesting is that their revenue was $10.17 billion, with a net profit of $1.61 billion. However when looking at last year's numbers, revenue was $9.6 and net at $1.59 billion. Their revenue rose 6%, while profits only rose 1.3%. That means their overhead costs are rising more rapidly then their sales percentage. At the current rate, without any change in the trend, their revenue will still rise, however their net profits will start to stagnate or shrink. They need to watch out for this.

[Chris @ Jan 21st 2009 5:45PM]

I think this is part of the evolving philosophy. They have said they want to make products people can afford, so they offer things like the iPhone at the subsidized price as well as the macbook at the entry price of 999. Why not take a little less percentage of profit when it gives you greater market penetration and control?

[Tyler Willis @ Jan 21st 2009 6:03PM]

I think that the subscription method of revenue recognition probably has something to do with that. You incur the expense in the period it was manufactured and the revenue gets spread over 8 quarters.

Also there is the new unibody manufacturing process. It looks amazing, but it can't be cheap!

[kjb434 @ Jan 21st 2009 5:33PM]

So does this mean they have to get windfall profit tax put on them like the oil companies? Obviously their profit margin is way higher.

[Aaron @ Jan 21st 2009 5:34PM]

iPhone sales down 40% on the previous quarter. Ouch.

[CraigJ @ Jan 21st 2009 5:46PM]

Are you listening to the same call I'm listening to?

"iPhones were up 88 percent to 4.3M sold"

[Snitch @ Jan 21st 2009 5:55PM]

The iphone did pretty good believe it or not, the only reason the sold so many in the previous quarter was because that was when the new model was release but if you look at last years data they sold 88% more this year during the same time, not to mention we are now in a Recession, i don't own a iphone yet but what ever the heck they're doing they're doing it right

[Aaron @ Jan 21st 2009 6:14PM]

@CraigJ
UP 88% year-on-year, DOWN 40% quarter-on-quarter.

[UnixSystemsEngineer @ Jan 21st 2009 7:57PM]

Aaron,

3rd quarter was the 3G launch quarter, so you'd expect them to be down. I'd expect to see another drop in the Jan-March quarter, since sales are highest during the holidays.