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Apple's Q4 earnings call will take place Oct. 18
Can Apple continue the string of unprecedented financial success? Will the 4th quarter of 2010 (ending tomorrow, September 30th) be even more successful than the 3rd quarter, now that the iPad has had time to dominate the market for three more months, and the iPhone 4 has overcome the negative "grip of death" publicity? We'll all find out on October 18th, when Tim Cook, Steve Jobs, and a rogue's gallery of tech analysts bring us the 4th quarter earnings call for Apple Inc. As usual, TUAW will be providing a liveblog of the event, complete with commentary by our staff of bloggers. The event usually starts about 5 PM ET, and we'll be sure to give you a heads-up as the day approaches. [via The Mac Observer]
The App Store: 250,000 apps and growing
Apple set another milestone over the weekend when it reached 250,000 apps available in the App Store. Last Saturday, 148Apps recorded 252,227 apps currently available for the iPad and iPhone/iPod touch. Expect Steve Jobs to tout these numbers on Wednesday at the beginning of Apple's scheduled press event. As Electronista reports, Apple still has the numbers when it comes to mobile app stores. Unofficial statistics suggests that there are over 100,000 apps available in the Android Store, and far fewer -- around 9,000 -- in RIM's BlackBerry App World. 148Apps also provided some additional little tidbits about the App Store. For instance, apps typically wait a week before going live. The average price of a paid app is US$2.67. The majority of apps are book apps (not to be confused with iBooks), followed closely by games.
Government, enterprise Mac sales surge
Apple continues to show tremendous growth in the enterprise and government markets, as Mac sales spiked sharply over the last three months. AppleInsider cites a report from Charlie Wolf of Needham & Company this week that Apple saw a 200.8% year-over-year growth in government sales for the month of July. That's a huge number, and significantly higher than the 12.1% of growth that PC sales showed over the same period. Likewise, sales grew 49.8% in the business market during the same time period. Large companies out-purchased small businesses, picking up 98.3 more Macs than they did in the previous year. Wolf hesitates to call the figures a pattern, saying "Whether the June blip was a one-quarter phenomenon or something more enduring should be revealed in future quarters." As for education, traditionally a stronghold for Apple, sales grew 14.7% during the same period. Recent reports show that college and university students in the US are buying MacBooks in huge numbers.
Q3 iPad sales estimates vary
Predicting Apple's sales numbers is always a guessing game. Phillip-Elmer DeWitt notes that, despite Apple announcing the 3 millionth iPad sale 5 days before the quarter ended, this time will be no different. He's compiled a number of estimates over at Apple 2.0, with an average around the 3 million mark. On the low end of the range is 2.50 million units sold from Mike Abramsky of RBC Capital. Mark Moskowitz of J.P. Morgan is more optimistic with a projection of 3.75 million units sold. Most were surprised by the sheer volume of sales. At one point, Apple was selling 45,000 iPads per day. Bernstein Research's Toni Sacconaghi considered what could happen if that "scorching pace" was maintained: "Apple could sell from 25 million to 42 million units in fiscal 2011, its first full year of sales...revenues would amount to about $15B, and likely grow about $10B [year over year]. This would make iPad revenues in their first full year nearly as large as Apple's current Mac ($18B) business." Of course, it's unlikely that such a rate of sales could be maintained, even if the iPad has truly joined its smaller brethren in breaking out of the core Apple customer base. Sacconaghi estimates that 18 million iPads will be sold in fiscal year 2010. Apple's Q3 financial conference call will take place on July 20th. We'll be live blogging it as usual.
Industry analyst -- iPad outselling the Mac
Industry analyst Mike Abramsky of RBC Capital Markets is bullish on the iPad, noting that at this early date, Apple is selling more than 200,000 a week of the new device. By comparison, US sales of Macs are hovering at about 110,000 per week and sales of the iPhone 3GS are at about 246,000 per week based on first quarter 2010 sales figures. Now, remember that this is all based on the iPad selling in one country -- the United States. The official international launch of the iPad is coming up at the end of next week, which prompted Abramsky to raise his estimate of global iPad sales during 2010 from 5 million to a whopping 8 million. Some may be thinking that iPad sales are cannibalizing sales of Macs, but Piper Jaffray analyst Gene Munster shot that theory down earlier in the week, noting that it's more likely that iPod sales will suffer. UBS analyst Maynard Um ran a small survey which showed that most iPad buyers don't see the device as a replacement for their more traditional computers, including Macs. Many analysts are of the opinion that the iPad, like the iPhone before it, will generate a "halo effect" that will drive sales of other Apple products as well. [Digital Daily, via The Loop]
Apple could become the largest company in the U.S.
In 1997, a lot of investors felt that Apple was well on the way to oblivion. That's the same year that Michael Dell, founder and CEO of Dell, Inc., uttered his famous comment to an audience of IT managers: "I'd shut it [Apple] down and give the money back to the shareholders." The Wall Street Journal's SmartMoney.com is reporting that since Apple is now the country's third-largest company in terms of stock market value and the #1 (Exxon-Mobil) and #2 (Microsoft) companies are seeing declines in their value, Apple could very well end up being the company with the highest valuation by year-end. As the article points out, stock market value isn't always the best indicator of a company's size or economic value. In terms of sales, Apple ranks a paltry #42, which is even lower than Dell at #38. On the other hand, Apple is able to convert 29 cents of each sales dollar into operating profit, while Dell sees only 5 cents on each dollar. Whatever the standard for valuation or "size" of a company may be, it's clear that Apple has made an incredible journey since the bleak days of 1997.
iPad could produce the quickest climb to the $1B mark
Yesterday, we reported on an incredible statistic: If iPad sales continue at the current rate through the end of June, Apple could realize US$1 billion in revenue. Today, Yankee Group's Carl Howe puts that number into perspective, noting that the iPad "...will likely take the crown for the fastest consumer product growth to the $1 billion revenue mark in history." That is, of course, if current sales trends continue. If it happens, it will have taken place in less than 120 days. Howe compares the iPad's meteoric rise to the revenue arc of Google. As a company that's barely over 10 years old, Google produced one of the fastest growths to $1 billion in revenue and the fastest growth to a market valuation greater than $1 billion. It's also important to note that these iPad numbers account for US sales only. Once international sales begin, Apple should really blow the roof off of this thing.
AdAge doesn't like iAd's pricing scheme
AdvertisingAge confirms today what the Wall Street Journal pointed out last week: advertising with Apple's iAd service won't be cheap. Most advertising agencies charge either a flat rate per thousand impressions (CPM) or a small amount each time a user clicks an ad (CPC). With iAd, Apple will do both. Under Apple's arrangement, advertisers will pay US$10 per 1,000 impressions, $0.01 for each ad displayed, and $2 for each ad clicked. By comparison, AdMob reportedly charges $10 to $15 CPM (on average). Customers opting into CPC campaigns will pay $0.15 to $0.30 per click. AdAge's Kunur Patel and Michael Learmont dislike Apple's deal, saying "Apple is reinventing mobile ad pricing, and not in a good way." Fortune notes that Apple has not yet released an iAds developer's kit, meaning that customers will have to work with Apple when creating campaigns. Again, the price tag is high: Apple will charge $50,000 to $100,000 to agencies spending less than $1 million on iAd buys, according to agency executives. In related news, Google is currently hoping to convince the FTC to allow its intended purchase of AdMob. They're using Apple's forthcoming iAds service as evidence of competition in the mobile advertising market.
Report: Apple could realize $1B of iPad revenue in its 1st quarter
There are some smoking hot numbers coming out of Cupertino CA this week and they're all about iPad sales. Just yesterday, Apple announced that they had sold 1 million iPads in the first 28 days of availability. As Business Insider (BI) notes, selling 1 million units of anything in a month is impressive, much less during April in the USA when most people are fretting over taxes. BI goes on to speculate that Apple could ship 2 million units by the end of the June quarter. Figuring an average retail price of US$650, Apple has already realized $650 million in revenue and, if they do indeed hit the 2 million milestone in time, the iPad could bring in $1 billion in revenue in its first quarter of availability. As a little perspective, note that Apple as a whole generated $1.8 billion in revenue during the June quarter of 2000. Plus, it took 74 days to sell 1 million iPhones in 2007 and nearly 2 years to sell 1 million iPods. As for whether or not the iPad "...means business," I think the answer is clear.
Apple passes Motorola, now the largest US phone maker
In some incredible news, Apple has passed Motorola to become the largest phone maker in the US. According to Forbes, Apple sold 8.8 million iPhones in the first quarter, while Motorola sold 8.5 million of their various mobile devices. This is despite Motorola having posted an unexpected profit in the quarter and outdoing both its own and Wall Street's forecasts. Motorola has been in a skid for a while. Four years ago they posted 46.1 million phones sold in the 1st quarter (back when the RAZR was hot). Their current strategy is to focus on smart phones that they can charge more for, like the Droid. It's working, Forbes notes, but more slowly than executives would like. Motorola earned US$69 million, or 3 cents per share in the quarter. In the same quarter last year, it lost $231 million, or 13 cents per share. Motorola has been in the market for a long time, which makes Apple -- a relative newbie -- even more impressive as the 1st quarter winner. If only we had a hit of what they'll be doing next.
WSJ: Apple to charge a premium to put ads in mobile apps
When Steve Jobs introduced iAd on April 8th, he provided some details on how it would work, but not all. Now, the Wall Street Journal is reporting on the cost for early participants, and it's steep. Apple is currently on a dog-and-pony-show tour, proclaiming the benefits of iAd to potential customers across the US. According to a "person familiar with the matter," initial participants could be charged as much as $10 million. It's a number that has some market veterans surprised. Phuc Truong, managing director at Mobext, called it "...a hefty sum... What Apple is trying to do is certainly above and beyond what's been done in the past." Mobext's clients include Sears, Choice Hotels, Amtrak and Volvo. Apple and developers will share iAd revenue with a 40/60 split; that is, Apple gets 40% while developers get 60%. In addition, Apple will charge advertisers US$0.01 for each ad displayed. If a user taps a banner and brings up an ad, Apple will charge $2. Under the $1 million package, the WSJ points out, costs would potentially reach $1 million with all of that tapping. With 85 million installed iPhone, iPod touch and iPad customers, the potential customer base is huge. I tend to ignore ads in apps, but if they can provide me with something more than a picture and a pitch -- location-based store finders, coupons or a little entertainment for example -- I'll pay attention. Now what about iAd for podcasts?
Estimates: Nook demand beats Kindle, iPad outsells both
According to DigiTimes, the demand for Nooks exceeded that of the Kindle in March. Meanwhile, the iPad has probably outsold them both. Mingchi Kuo, a senior analyst at Digitimes, noted that e-book reader manufacturers shipped more units of the Nook to Barnes & Noble than Kindles to Amazon last month. Kuo suggested that the Nook accounted for 53% of e-book readers shipped to US vendors in March, 2010. Of course, the number of units shipped doesn't necessarily represent the number of units sold. Barnes & Noble sells Nooks at their retail stores and some university bookstores, so those stocks must be maintained. Amazon has only sold Kindles online until last weekend (they just started showing up at Target stores on Sunday). DigiTimes goes on to note that global e-book reader shipments totaled 1.43 million units in the first quarter of 2010. In the meantime, Apple sold 500,000 iPads in the first week of sales and is estimated to have broken the 1 million mark. That's US sales only. It's a bit unfair to compare the Kindle and Nook to the iPad until we know how many customers are using them to read books, how many books they purchase, etc. After all, that is the Kindle/Nook's function. Early research found that roughly 1/3 of customers intended to read books with their iPads. For reference, Apple sold 500,000 iPhones on opening weekend.
How the Mac survived the recession
As we approach 2010's halfway point, it's interesting to reflect on Apple's successful navigation of the American economy's recession. With some careful inspection, we realize that Apple's portfolio of non-Macs saw it through. Philip Elmer-DeWitt at Apple 2.0 has published a chart demonstrating unit sales of Macs vs PCs over the last nine years. While the industry suffered as a whole, as did so many others, Apple sold more Macs in that span. You'll notice an off-the-chart dip in 2005-2006, which coincides with the Intel transition; a time when many users stopped buying as they waited for the new machines (The first Intel iMacs were released in January 2006). During that waiting period, Apple relied on iPod sales. By the time iPod sales slowed, shoppers were buying Macs again. Likewise, as the current recession prevented many customers from buying Macs, the iPhone sustained Apple. It will be interesting to see what the iPad has done in another year. The Mac Observer's Alexis W. Cabot has his own interpretation of this data. "Macs have been on a roll ever since I have comparable data, with an exception during the [2005-2006] Intel transition," he says. "This proves either that value is always in high demand, or that we will always have the rich among us."
Loyal Apple customer bases waited for stores
A study by Experian Simmons demonstrates that customers in several of the USA's ten most Apple-loyal regions waited 5 years or more for an Apple Store to open. The study ranked US cities by the number of adults who own (at least) one iPod, iPhone or Mac. It shouldn't shock you that San Francisco/San Jose area of California ranked highest (32.3 percent of adults met their criteria), while Boston, San Diego, New York City, Chicago, Denver and Las Vegas were also among the top ten. DC, the study points out, is still without a store, despite 30.1 percent of its residents meeting Experian's criteria. Boston's Boylston Street store only opened within the past few years, and other high-ranking cities (Baltimore, Md. at #13, Charlottesville, Virg. at #16 and Boise, Idaho at #25) are still waiting. Of course, some of these cities have stores in the suburbs. The Cambridgeside Apple Store, reachable from Boston by the subway, was one of the very first stores to open. Other stores like Braintree and Peabody are arguably within driving distance of Boston. Likewise, Apple Store Bethesda Row and Apple Store Montgomery Mall are in the greater DC metro area. [Via IfoAppleStore]
Apple has countersued Kodak
Apple filed suit against Kodak on April 15th, 2010, claiming that it has infringed on two of Apple's granted patents. This comes after Kodak filed suits against both Apple and RiM in January. The suit targets Kodak's C, M and Z series EasyShare cameras as well as the popular Zi8. Apple claims that Kodak is guilty of copying technology relating to image processing, energy management and memory design. Additionally, Apple has listed a formal ITC complaint that would prevent sales of all affected cameras if the claim is validated. This is a response to claims Kodak made in against Apple and RIM in January. Specifically, Kodak claims that Apple and RIM infringed upon Kodak's method of previewing images with the iPhone and Blackberry. An additional complaint, pointed at Apple only, addresses processing images at different resolutions. Finally, Apple is also accused of infringements on processes of software programs calling to each other. This counter-suit strategy is common and usually an effort to produce a settlement and avoid a long and costly court battle. [Via MacDailyNews]
Mercury-News: Apple tops the Valley for valuation
With the total market value of AAPL at about US$220 billion, over the past year Apple has managed to de-throne Google as Silicon Valley's most valuable company. By comparison, the search and cellphone-centric Big G has a market capitalization of about $174B as of today's prices. In a retrospective piece, the Silicon Valley Mercury News points out that Apple's market cap is up 107 percent from one year ago. There are only two companies in the United States with a market capitalization greater than Apple's: Exxon Mobil and Microsoft. Earlier this month, Apple's market cap passed that of Wal-Mart; the margin was $2.84 billion as of April 2nd, 2010 and is about $18B today. Needham & Co. analyst Charles Wolf notes Apple's success at riding out the USA's economic recession. "It's just mind-boggling. Thanks to the iPhone, it just sailed through the recession. It was just an incredible engine." For the latest on Apple's financial health, follow our live blog of its 2nd quarter analysts call, tomorrow at 2 pm PDT/5 pm EDT. AAPL is down about 1.5% today at 1 pm. [Via Macsimum News]
Piper Jaffray AAPL stock forecast bumped up to $299
According to AppleInsider, Piper Jaffray's Gene Munster expects Apple's stock to hit US$299 by the end of the year. When Apple revealed that it had sold 50 million iPhones at the iPhone OS 4 event, the analyst realized that meant at least 6.9 million iPhones were sold in the March quarter, and that's a conservative estimate. With those numbers in mind, Munster predicts that Apple will sell 7.5 million iPhones in 2010's first quarter. That figure would represent an impressive 93 percent year-over-year growth in iPhone sales. Note that Apple realized a 90 percent increase y/y last quarter. As a result, Munster has bumped his predicted end-of-year price of AAPL up from $287 to $299 per share. Meanwhile, Munster also raised his Q1 Mac sales estimates from 2.6 million to 2.9 million. Take his numbers with your choice of salt grain size, as he did shank the iPad launch estimate pretty badly with a last-minute bump in expected sales. Apple reports quarterly earnings on April 20th, and we'll be covering the analyst conference call as we always do.
Apple pressuring music publishers over Amazon Daily Deal
Amazon has used low-priced, exclusive "Daily Deals" to promote its MP3 store successfully, and Apple's not happy about it. In fact, the iTunes team is trying to talk publishers out of participating. According to Billboard, participating labels entered into the program with Amazon in 2008 without paying a thing. It was simply meant to increase the store's publicity. Two years later, that's changed. An unnamed major-label head of sales told Billboard that "[the] promotion morphed into something where the labels make arrangements to provide an exclusive selling window with Amazon for a big release expected to do a lot of business on street date [the day the new release is available for general retail sales]." Two years in, the labels are motivated to offer Amazon first dibs on major releases at a significant discount, and that's gotten Apple's attention. Billboard's sources suggest that iTunes executives are trying to persuade labels to stop offering Amazon these exclusives, and have even gone so far as to pull their own promotions for those releases. In response, Billboard reports, certain label executives recently opted out of Daily Deal promotions for such big names as Corinne Bailey Rae, Lady Antebellum and Ke$ha (Sony Music Entertainment denies considering a Daily Deal promotion for Ke$ha's "Animal"). Additionally, Amazon is said to be altering the deal to not require exclusivity, but Apple's still unsatisfied. Oh what a tangled web we weave, when first we practice to sell digital music. [Via AppleInsider]
Apple announces winner of the 10 billion songs promotion
Just yesterday Apple's iTunes store reached a huge milestone -- 10 billion songs sold. That's an incredible number. In fact, it's almost as incredible as the prize that Mr. Louie Sulcer of Woodstock, Georgia received for buying the magic song. As his reward, he received a $10,000 iTunes gift card, which he may use towards any of the music, TV shows, movies, apps, books, etc. in the store. What was the 10 billionth song downloaded? "Guess Things Happen That Way" by Johnny Cash. Apple's vice president of Internet Services Eddy Cue remarked on the milestone in a recent press release. "We're proud that iTunes has become the number one music retailer in the world, and selling 10 billion songs is truly staggering." Congratulations to Mr. Sulcer! Enjoy that hefty gift card. Might we suggest a little Battlestar Galactica [iTunes link]? [Via MacDailyNews]
Apple earns 5.5 percent total market share in France
Apple had a great holiday sales quarter in the US and now research firm Gartner is reporting similar good news from Europe. Specifically, Apple shipped 182,000 machines in the fourth quarter of 2009, giving it a 5.5 percent total market share in France. It should be noted that Apple didn't reach the top five in any other European country. Overall PC sales declined throughout Europe in 2009, while Mac sales in the U.K. increased from 3.8 percent in 3Q 2008 to 5 percent in 3Q 2009. Gartner attributed the increase partly to the "halo effect." That's the common term for increased sales of Macs from PC owners who have purchased iPods or iPhones and find that they love the design and ease of use of the Apple devices. The only manufacturer to out-perform Apple's growth in Europe during 2009 was Acer, which saw 35.5 percent growth. Currently there are two Apple retail stores in France: Apple Store Odysseum in Montpellier and Apple Store Carrousel du Louvre in Paris.
