Apple's spectacular rise continues. The company's latest financial report reveals that 20.34 million iPhones were sold in the last quarter alone, which is 142% growth on the same quarter in 2010. And iPad sales are even more impressive, running at 9.25 million for the same period, which is a 183% increase over the same period last year. These high margin figures help explain how Apple achieved a record quarterly earnings of $28.57 billion and net profit of $7.31 billion—over 25% of revenues.
What's behind the increase? Apple's been squeezing its Eastern production lines for ever-greater efficiency, achieving reduced per-unit costs and greater production yields for the iPad 2 (Now In White, remember). Both the iPhone 4 and iPad 2 are now mature products, and as production techniques get polished Apple's margins increase with almost every passing week. This may also be an unexpected benefit of keeping the iPhone 4 in production as its headline smartphone for a little longer than Apple's usual product update timing.
Meanwhile, Mac sales were also up, 14% year-on-year, to 3.95 million—but that's a slight miss compared to analyst expectations, which were around the 4.2 million mark. The discrepancy may be sourced in delayed purchases of Macs as savvy shoppers wait for updated hardware carrying Apple's new OS X Lion code.
The drop in iPod sales—at 7.54 million units sold, this is a decline of 20% on the same figure for 2010—is easier to explain. Both iPhone and iPad sport MP3 players and actually have an "iPod" app built in, and sales of those devices are way up. Android smartphones, which are also excellent MP3 players, have undoubtedly cut into some of Apple's iPod market too. The intriguing question will now be what can Apple do to smartly route around this sales drift? The market is begging for an innovative solution, much in the same way Apple surprised the MP3 world with the launch of the refreshed, tiny-touchscreen-enabled iPod Nano.
With an iPod refresh expected in the fall, iCloud on the way, alongside the arrival of the next-gen iOS 5, hot rumors of a potentially pre-pay market-owning iPhone "lite," and then the predictable boost of the holiday season, the next couple of quarters may yet be bigger than this one. And then, in early 2012 we can expect the iPad 3...
After executing one of the most amazing turnarounds in corporate history, CEO Steve Jobs is well on the way to turning Apple into the first trillion-dollar company. With revenues up 92% and profits up 125% he's got every reason to be "thrilled"—since these quarterly figures should actually represent something of a lull in Apple's sales growth: The iPad 2 has now been on sale for months, and initial peak buying has died down, with a similar profile likely for the Verizon iPhone; Macs aren't experiencing the full "back to school" sales peak yet; and the iPhone 4 is very long in the tooth, with an update expected in a mere double-handful of weeks. But the figures say it wasn't a fallow quarter.
Interestingly, though, the Wall Street Journal had a story about board members speculatively hunting for Jobs' replacement as Apple CEO—and published it just hours before the numbers were revealed. The WSJ is something of an official leaky channel for Apple in the past, so it's likely there's a grain of truth here. Is Steve ready to be replaced yet? Nope—Jobs himself said it was "hogwash".
[Image: Flickr user erik pitti]