Apple nails first $20 billion quarter; Jobs hints at major acquisition
Despite seeing an earnings increase of 70 percent in the fourth quarter, mostly on the broad shoulders of the iPhone which saw sales nearly double, Apple shares traded down after the regular session ended. Most analysts blamed a decline in its gross profit margin as sales of the high-margin iPod slowed. But the company reported strong sales on almost all its devices for the quarter, even the newly introduced Apple TV, which in just a few weeks already has sold 250,000 units, "And we're thrilled with that," said CEO Steve Jobs.
Apple also said it had sold 4.2 million iPads in the quarter, the first full quarter of sales for the wildly popular tablet computer that has added even more pop to the exploding consumption of online video.
And, Apple watchers said, the company's $51 billion in cash reserves could portend a major acquisition, as hinted at by Apple CEO Steve Jobs. "We strongly believe that one or more very strategic opportunities may come along that we're in unique opportunity to take advantage of because of our cash," he said.
On the dollars and cents front, Apple reported $4.31 billion in profit, or $4.64 per share, for the quarter, compared to $2.53 billion, or $2.77 a share in the comparable quarter a year ago. The Cupertino, California-based company also said revenue increased 67 percent to $20.34 billion.
"We are blown away," said Jobs.
The company sold 14.1 million iPhones, an increase of 91 percent year-over-year. And, he said in a conference call, "We still have a few surprises left for the remainder of this calendar year."
Apple's iPad sales were expected to top 4.8 million, but analysts speculated that parts shortages kept the device from hitting its forecasts. Apple also sold 3.89 million computers, up 27 percent, allaying fears that the iPad would cannibalize laptop and desktop sales.
Jobs took time during the conference call to jab at rivals' attempts to produce a challenger to the iPad, predicting that the current crop of tablet computers with smaller screens--and the attendant smaller keys with which to use them--will flop.
"This size isn't sufficient to create great tablet apps in our opinion," he said. "It is meaningless unless your tablet also includes sandpaper to sand down the user's fingers to about 25 percent their present size."
And, he pointed out that while Google has said some 200,000 Android phones were being activated every day, Apple "has activated around 275,000 devices per day.” Jobs also said that while the Android system is growing rapidly, its fragmentation could cripple it.
- see the release
- see this Wall Street Journal article
- see this All Things Digital report
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