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Tim Cook: Tablet market will eventually exceed PC market
As part of today's earnings call, Apple CEO Tim Cook said he believes tablets will eventually eclipse PCs. "I believe there will come a day when tablet market by unit is larger than the PC market," he said. Cook emphasized that Apple would continue to be innovative in the tablet market, and that people want to do multiple things with them. He added that Apple does not see tablets such as iPads being in the same category as devices such as the basic Kindle and Nook. "People who want an iPad will not settle," Cook said. A recent report from the Pew Research Center shows that the number of adult Americans who own tablets leaped from 10 percent to 19 percent over the holiday season. While Pew cited the Kindle Fire and Nook Tablet being behind the ownership surge, Apple selling 15.43 million iPads in the previous quarter certainly contributed to this as well. As Apple continues to do more with the iPad, and whatever successors it has, it's not hard to believe that Cook's predictions will come to pass within the next few years. (It's already coming true for Apple -- the iPad outsold all Macs combined by nearly three to one last quarter. --Ed)
Apple Q1 2012 results liveblog
Today, TUAW liveblogs Apple's first quarter conference call. If you'd like to listen live, point your browser to Apple's dedicated page. I'll be doing live updates as they're discussed, including coverage of the Q&A followup. The liveblog appears in reverse chronological order, with newer updates higher on the page. This post will not auto-update, so keep refreshing your browser. Also note that I do not usually cover the Financials. Our usual suspects are all on planes on their way out to Macworld/iWorld today. So please bear with me, as Apple spokespersons have a tendency to talk very, very fast on these calls.
Apple announces Q1 2012 earnings, sells a record-breaking 37 million iPhones
Apple released its earnings statement and announced yet another banner quarter. Apple knocked it out of the park, with record quarterly revenue of US$46.33 billion compared to $27.64 billion in the year-ago quarter. As predicted, iPhone sales were through the roof with 37.04 million units sold. This is up from the 17.07 million the company sold last quarter and up 128 percent from the 16.24 million it sold this quarter in 2010. iPad sales were also up to another record-breaking level. The company sold 15.43 million iPads units, which is up from the 11.12 million iPads the company sold in Q4 2011. It's also an 111 percent increase from the year-ago quarter when it sold 7.33 million units. Mac sales remained strong. Apple sold 5.2 million Macs, which is up slightly from the 4.89 million it sold during the previous quarter. iPod sales continue their downward decline from 19.45 million in Q1 2011 to 15.4 million iPods this quarter, a 21 percent year over year decline. Apple will livestream its conference call later today, and we'll be liveblogging it as it happens.
Research: 19 percent of Americans own a tablet
Pew Research Center has found that the number of Americans owning tablets shot up by 10 percent to 19 percent between mid-December and early January, nearly doubling the number of tablet owners during the holiday season. The number of people owning digital-reading devices, which includes tablets, also jumped from 18 percent to 29 percent in the same period. Pew said that a lot of credit should be given to the lower-priced Kindle Fire and Nook Tablet for getting more tablets into people's hands, but Apple is certainly no slouch here either. Supplier data shows that Apple could post its best quarter ever when it releases its latest earnings on Tuesday, and more people adopting an iPad over the holidays will certainly add to that. [Via Electronista]
Apple supplier data suggests great holiday sales
With just under two weeks to go until Apple announces financial results on January 24, analysts are lining up their refined estimates for just how well the company may have done for the holiday quarter. UBS analyst Maynard Um, in a research note to his clients quoted on GigaOM, believes that supplier data is pointing the way to Apple's best-ever quarter. Um bases his assumption on the preliminary first quarter revenues for Multi-Fineline Electronix (MFLX), a manufacturer of flexible printed circuit boards for products including the iPhone and iPad. MFLX also says that it saw an increase in shipments from its largest key customer, which Um believes to be Apple. Those results follow others that indicate that Apple's first quarter (October - December) may be incredibly good. Verizon noted "better than expected iPhone shipments" last week, AT&T touted strength in iPhone sales last month and Cirrus Logic (which makes analog chips for iPad and iPod) reported better results this week. In addition, Dialog Semi, Catcher (makes the metal casings for Macs), TPK (maker of iPad 2 touch panels), and Hon Hai (assembles iPhones and iPads) all reported strong December results. As usual, TUAW is liveblogging the Apple results call on the afternoon of January 24, so be sure to join us to hear the news.
Apple closed at a record high on Friday; hits all-time intraday high today
On Friday, January 6, Apple stock quietly achieved a milestone by closing at an all-time record high price of US$422.40 per share. Even better, the stock has just passed an all-time intraday high (it was at $427.75 earlier this morning). That puts the company's market capitalization tantalizingly near $400 billion. That's not the highest price the stock has ever reached. On October 17th, Apple's stock reached an intraday high of $426.70, but closed lower. During the months of October and November the share prices tumbled, along with the rest of the market, but AAPL has seen a remarkable recovery in the last month. Much of this boom in the share price appears to be a run-up to Apple's quarterly earnings announcement on January 24, according to Fortune's Philip Elmer-DeWitt. That announcement, which covers the all-important Christmas quarter, is expected to be chock-full of good news from Cupertino. [Chart generated by AOL DailyFinance.com]
Apple stock named top pick for 2012
If part of your Christmas gift stash includes a lot of cash, you might want to consider spending it on shares of Apple, Inc. Ticonderoga Securities has named the company's stock the 'top pick' for investors in 2012, mirroring the recommendation made last year by the group. Of the 20 companies covered by Ticonderoga, Apple was the best performer with a growth rate of 26 percent. Ticonderoga analyst Brian White was quoted on AppleInsider as saying "We believe Apple's portfolio in 2012 has the opportunity to crete more excitement around the story with our expectation for the unveiling of iTV, an 'iPad mini' and a major upgrade with the iPhone 5, while we expect the company to finally come to grips with its surging cash balance and issue its first cash dividend." The possibility of a cash dividend to shareholders was roundly dismissed by late Apple CEO Steve Jobs in 2010, as the company has preferred in the past to hold onto cash reserves to take advantage of "strategic opportunities." White isn't the only Wall Street analyst painting a rosy picture for AAPL in 2012. Longtime Apple bull Gene Munster of Piper Jaffray sees growth in almost every Apple product segment with the exception of the iPod. Munster thinks that the next-generation iPhone will have a slightly larger screen and will launch in late summer or early fall. Munster also believes that an Apple television will become a reality this year, and that the company might supplant a new third-generation iPad with a lower-priced entry as well.
App Store hypothetical market cap beats RIM's value
Research in Motion, maker of the once-ubiquitous BlackBerry, hasn't been doing so well this year. As each month goes buy, its smartphone continues to lose market share to the likes of Apple's iPhone and Android-powered phones. Just last week, RIM's stock sank after dismal quarterly earnings and a less-than-stellar outlook. That stock slump brought the company to a market cap of approximately US$7.04 billion last Friday. As smartphone market analyst Brian Hall was the first to point out, that's less than Apple's App Store is worth. Yeah, just the App Store alone is worth more than all of the BlackBerry maker. Now, to be sure the App Store is not an individual company or subsidiary of Apple. But its value is estimated to be worth $7.08 billion to Apple. That estimate is based on an analysis by Trefis that says Apple's App Store makes up 2% of the total market cap of the company. And actually as of close of market yesterday, RIM is worth even less than on Friday when the numbers were first run -- about $6.7 billion -- and Apple is worth more, so the App Store has actually increased its lead. Not to kick a company while it's down (too late) that means that not only is RIM getting its butt kicked by Apple's iPhone, it's getting it's butt kicked by just the App Store that runs on the phone that's taking all its market share. What's worse is that there's really no sign of a turnaround strategy for RIM, although some bloggers think they have the answer.
China has become Apple's second-most important market
During yesterday's Q4 2011 earnings call, Apple CEO Tim Cook spent a lot of time talking about just how important China is to Apple's future. Cook called the company's progress in China "amazing," and a look at the numbers shows exactly what he's talking about. The greater China region, which includes Hong Kong and Taiwan, accounted for 12 percent of Apple's 2011 full-year revenue. The figure for fiscal year 2009 was only 2 percent, which indicates a huge growth rate for a single region. Cook referred to greater China as Apple's "fastest-growing region by far." In the fourth quarter, China was responsible for US$4.5 billion in revenue -- that's a full 16 percent of the $28.7 billion in total revenue reported by Apple. By comparison, the European region contributed $7.4 billion to Apple's total revenue, so the China region is essentially providing 60 percent of what Europe is. Apple is helping to fuel the growth, with six Apple Stores now in greater China that are all at the top of the company's list of most-visited and highest-grossing locations. Cook expressed Apple's interest in the region when he stated that "In my lifetime I've never seen a country with as many people rising into the middle class aspiring to buy products that Apple makes. It's an area of enormous opportunity. It has quickly become No. 2 on our lists of top revenue countries very, very quickly."
iPhone sales dip last quarter largely due to rumors
iPhone revenues and unit sales for Apple's last quarter dropped significantly compared to the previous quarter. Revenues from iPhone sales declined by 18 percent, while unit sales dropped 16 percent -- a sell-through decline of 2.4 million units over the previous quarter. During the recent quarterly earnings call, CEO Tim Cook and other Apple executives confirmed the main cause of the decline: rumors. Apple believes the explosion of iPhone rumors during the latter half of the last quarter materially contributed to the decline in iPhone sales over the quarter. Coupled with pent-up demand for a new model of iPhone after Apple unexpectedly didn't refresh the line at WWDC, this amounted to a US$2.3 billion reduction in revenue from iPhone sales over the quarter. This is the first time that I can recall Apple publicly admitting the impact rumors have had on its bottom line, and that impact appears to have been substantial. Even Gizmodo's early outing of the iPhone 4's design failed to make much (if any) dent in iPhone sales in the quarter preceding the iPhone 4's launch in 2010, but endless speculation about a supposed iPhone 5 launch apparently drove customers to hold off on iPhone purchases in anticipation of a new model. The good news for Apple is that record-breaking sales of the iPhone 4S may have already offset its lost revenue from last quarter. With four million handsets sold in just the first three days after its launch, sales of the iPhone 4S are likely to drive Apple's holiday quarter iPhone sales beyond anything seen thus far. Whether the situation will repeat in 2012 is anyone's guess. The rumor mill is unlikely to stop churning, but hopefully next year it won't cost Apple so much in lost sales in the process.
Apple up 7.2% since Jobs resigned
As last week ended, Apple stock closed above US$400 (as we publish this AAPL is at an all-time high of $410). What's more interesting is that AAPL has climbed 7.2 percent between last Friday, September 16 and August 25, when Steve Jobs announced his resignation. A 7.2% gain in about three weeks is impressive, but even more so on the heels of Jobs's departure. When Steve took a medical leave of absence in 2009, anxiety was high among Apple's investors and customers (not to mention Steve's friends and family). Then COO Tim Cook acted as interim CEO, guiding Apple through several successful product launches. Surely Cook's performance in 2009 has tempered the market's hesitation now that he's working as CEO. It's a nice show of faith in Tim's abilities, and a promising start to the Cook-era Apple.
Apple awards CEO Tim Cook one million stock shares - if he stays until 2021
Now that Tim Cook is CEO of Apple, how do you ensure you keep him at the company's helm? How about by awarding him one million shares of Apple's stock. A form 8-K filed with the SEC gives the details: In connection with Mr. Cook's appointment as Chief Executive Officer, the Board awarded Mr. Cook 1,000,000 restricted stock units. Fifty percent of the restricted stock units are scheduled to vest on each of August 24, 2016 and August 24, 2021, subject to Mr. Cook's continued employment with Apple through each such date. Cook will receive half a million shares in five years, and the other half million in ten. That's got to be a major incentive both for staying on with Apple and ensuring the company continues to run well. According to MacRumors, that stock is worth just over US$383 million today. It looks like we'll be saying "Apple CEO Tim Cook" for quite a while.
Analysts downplay AAPL's dip as Jobs resigns
Apple's stock took a downturn yesterday, as might be expected after the resignation of Steve Jobs. According to WIRED, Apple's stock lost approximately 7.39 percent of its value in after-hours trading. A day later the stock has recovered well; as of this writing the stock price is actually higher than it was earlier in the week, though it still hasn't recovered the full value it lost yesterday. Apple's stock performance doesn't currently reflect the doom n' gloom that many pundits expected following Jobs's departure from his CEO role. Rather than a panicked sell-off, AAPL's performance over the past 24 hours appears to reflect confidence in both new CEO Tim Cook and Apple's future. Financial analysts have noted the drop, but they have said it's of little concern because Jobs's departure has been expected for a long time. A fair amount of financial analysis over the past few years has even suggested that uncertainty surrounding Jobs's health and Apple's CEO succession plan might have been holding the stock performance back. Of course, it's a little dangerous to make broad financial forecasts this soon after Jobs's resignation. Microsoft's stock price barely budged in the days after Bill Gates stepped down, but the stock declined sharply the following year (losing nearly half its value) and has been relatively stagnant since. Hopefully the same thing won't happen to Apple. If you're an investor, please take note that we are not financial analysts ourselves, and we're not offering any financial advice here.
Samsung will formally address Apple-led Galaxy Tab ban on Aug 25
Samsung will have the opportunity to defend itself against Apple in a German court on August 25th. The Korean manufacturer will argue against the recent injunction that halted the sales of the Galaxy Tab 10.1 in all EU countries except the Netherlands. Until this date, the Apple-requested injunction will remain in effect. This timing will likely keep the Galaxy Tab off the shelves of European stores until September and may have an impact on Samsung's next quarterly earnings.
Apple is now the world's most valuable company
Apple and ExxonMobil played market cap tag yesterday, but at market close today Apple has pulled ahead and is now the most valuable company in the world. Apple's market cap now stands at US$337.17 billion, over $6 billion more than Exxon's $330.77 billion market cap. Market cap is only one way of measuring a company's value, and one could certainly argue that Exxon's chief product, petroleum, is a far more vital commodity to the world market than Macs, iPhones, and iPads. It's still a watershed moment for Apple, however, and the psychological impact of having the world's highest market cap is pretty phenomenal for a company that was on the ropes just 12 years ago. Will Apple hold onto its spot at the top? It's impossible to say at this point, but unless Apple really stuffs something up in the near future, its competitors are going to have a hard time unseating Apple from its spot as the financial pinnacle of the tech industry.
German court blocks Galaxy Tab 10.1 sales across most of the EU (Updated)
The indispensable Florian Müller at FOSS Patents relays a report from the German dpa news agency (translated version): sources close to the Apple-Samsung patent dispute in Europe say that a district court in Düsseldorf has issued an injunction barring sales of the Galaxy Tab 10.1 across the entire European Union, with the exception of the Netherlands. This follows last week's official postponement of the Tab's Australian launch due to the local version of the same infringement claims. It may seem odd that an injunction in Germany could impact the entire EU, but a cursory reading of the relevant case law seems to support that -- we're inquiring with actual lawyers to find out. Also odd, though, is the fact that dpa cites Reuters as a source for this story, but there does not seem to be a corresponding Reuters piece out there. We'll keep an ear out. The Telegraph has a few more details. [The reference to Reuters was a mistranslation on our part, our apologies. –Ed.] Apple's complaint is before the ITC, which could have much wider effects in the long run -- although the lead time on a resolution is also much longer. Update: Bloomberg News now has confirmation of the injunction from an Apple spokesperson.
Apple set to surpass ExxonMobil as world's most valuable company
Several sites are reporting that Apple is about to pass Exxon Mobil as the world's most valued company, by market capitalization. StreetInsider.com reports that Apple's market cap is US$333.7 billion while Exxon Mobil's is $338 billion, meaning they could hit that cap today. We'll keep an eye on it and let you know when Apple surpasses this landmark milestone. If it turns out to be true, congratulations to Steve Jobs and everyone at Apple. That's an amazing achievement.
Apple's $76.2 billion cash hoard: Six frivolous ways to spend it
One thing that staggers the mind is the amount of money Apple has on hand. During last Tuesday's 3Q earnings call, it was announced that the company has US$76.2 billion cash on hand -- actually a combination of cash, short-term investments, and other items that would take an accountant to sort out. While Apple CEO Steve Jobs has publicly stated that "we do feel that there are one or more strategic opportunities in the future" as the reason to have all that money on hand, I thought it would be more fun to think about ways to spend $76.2 billion on frivolous things. Buy a fleet of 203 A-380 jumbo jets At a price tag of $375.3 million each, the huge A-380 (top of post) can carry up to 525 people in a standard class configuration. Apple's airline could simultaneously carry almost 107,000 people at a time, or over two times the number of employees the company has. This purchase would take a long time to happen, considering that only 53 of the monster jets have been built. Give an iPad 2 (16 GB Wi-Fi) to every person in Japan and Taiwan You could buy 152.7 million iPads with $76.2 billion, which means every man, woman, and child in the two Asian countries listed here could have an iPad 2 and there would still be some bucks left over. (Why those two countries? I needed two countries with a combined population of about 150 million.) Treat every Apple employee to seven flights into space That Genius at the local Apple Store is already the envy of many, but wouldn't it be even more impressive if she was also an astronaut? Beginning next year, Sir Richard Branson's Virgin Galactic is offering suborbital space flights on SpaceShip Two for $200,000 a pop. Apple has enough money to send every employee on seven SpaceShip Two flights each and still have money left over. Sir Richard might need to beef up his fleet a bit... Buy HP By a strange coincidence, HP's market capitalization just happened to be around $76.1 billion on 7/22/11. Here's a chance to put the TouchPad out to pasture, kill the Pre, and make printers that really work well with Apple devices. Turn Cupertino into Fort Knox West Gold prices were at an all-time high of $1,600 per ounce on Friday, but Apple could buy a lot of the stuff -- 2,976,562.5 pounds (1,350,146.0 kilograms). That's about a third of what's stored in the United States Bullion Repository in Fort Knox, Kentucky. Buy every MLB, NFL, NHL, and NBA franchise Now this would be very frivolous, but Apple could buy every professional baseball ($15.7 billion), football ($22.8 billion), hockey ($4.9 billion) and basketball ($7.7 billion) team in the USA and still have about $25 billion in change. The reality The reality is that Apple isn't going to do any of these things. The company is using its large cash reserves to expand in the midst of a worldwide recession, and that's what it should be doing. Apple doesn't pay shareholder dividends; if shareholders want to benefit from Apple's good business acumen, they can sell shares and probably make a decent profit. And like it or not, the company is not in business for charity -- they're in business to create jobs for employees and value for shareholders. Like I noted in the first paragraph of this post, Apple also has some strategic acquisitions in mind. Of course, we have no idea what those acquisitions could be, but whatever they do will most likely help the company in terms of achieving even more amazing financial feats in the future.
What analysts think about Apple's iPhone sales
Apple is announcing its quarterly earnings on July 19 and analysts are prepping their sales estimates for the big day. Philip Elmer-Dewitt of Apple 2.0 compiled a handful of these projections which range from a high of 20.25 million from Nicolae Mihalache of Traderhood down to a low of 15 million from Charlie Wolf of Needham. The average estimate falls at 16.9 million units which is a 101% year-over-year increase and a slight drop from the 18.6 million sold last quarter. In four years of iPhone sales, DeWitt estimates Apple has sold over 125 million handsets.
Apple cuts iAd buy-in fees
Since Apple announced the iAd mobile advertising service last year, the success of the service has been in question. Now Bloomberg is reporting that Apple is cutting rates for iAds by as much as 70% to attract marquee clients. As noted in today's post, Apple was initially charging clients US$1 million or more for an ad campaign that ran only in iOS apps that were designed to display the ads. Many of the initial clients, such as J.C. Penney and Citigroup, have abandoned iAd and are now spending their advertising dollars with services like AdMob, Greystripe, and Millenial Media that run on a variety of platforms. As a result, Apple is apparently dropping the cost of ad packages down to as little as $300,000 when buying multiple campaigns to attract new advertisers and retain existing ones. This strategy appears to be working for the company, as Apple notes that they'll be adding about 50 new iAd campaigns within the next few months. Still, for many advertisers and advertising companies, there's not much of a value proposition with iAd. Rob Norman, CEO of ad agency GroupM North America, noted that despite the sleek design of iAd, companies must account for the cost. He's quoted by Bloomberg as saying "We'd all like to stay at the Four Seasons, but not if it costs $150,000 a night."
