
Apple Reports Third Quarter Results - ssclafani
http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html
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kbd
Ridiculous, Apple has nearly as much _profit_ per quarter as Google has
_revenue_.

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MikeCapone
Indeed. Though most iPhone users are Google users, so Apple doing well should
also help Google grow.

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yequalsx
I bought my first Mac on Friday at the Mall of America. There's a Microsoft
store right across from the Apple store. It was amazing to me how much more
crowded the Apple store was. There were a lot of people at the Microsoft store
but it was ridiculous how many were at the Apple store.

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kenjackson
I'm mostly a Windows user, and I don't know why I'd go to a MS store. For
example, if I want an iPad or MBP I'd go to an Apple Store. I'm not sure what
other stores carry them (does Best Buy?). But I know that the Apple store
does.

In contrast, I can buy a PC anywhere. But I don't actually know what specific
PCs are available at the Microsoft store. I do know they have all of the
available phones at the MS store, but given that the only phones I'm
interested in are those by my carrier, I'm more inclined to go to my carrier
store (to see all carrier phones) than the MS store.

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m0nastic
I think one of the main benefits to the Windows stores (besides the fact that
they sell Windows Phones, and by all accounts don't actively try to talk their
customers out of buying them) is the fact that they sell systems there which
are part of Microsoft's Signature PC line.‡

For those unfamiliar, it's basically a system from a vendor without all the
crap that they install on a fresh system. The fact that Microsoft actually has
to have a service like this is certainly an interesting topic for discussion
(I'm sure Microsoft would prefer that vendors not load up new pc's with
garbage software that slows them down)

‡ <http://signature.microsoft.com/Default.aspx>

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Tyrannosaurs
I agree it's great you can get a PC without the crap installed but I think MS
have to tackle off the root problem and have it so that's how they all come.

Seriously, you'd get a noticable performance increase on the average low end
laptop right off the bat if they could do that.

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m0nastic
My understanding of how that works (which I admit is an outsider's
understanding) is that PC vendors subsidize the price of new PC's by
installing crapware on them.

The race to the bottom in PC pricing basically left them scrambling to find
ways to keep their prices low without gutting their already-falling margins.

I don't think Microsoft is in a good position to require PC's to stop doing
this (unless they were willing to eat the loss of vendor revenue by lowering
their Windows license cost, which would effect their own margin).

I'm left optimistic by companies like Lenovo, who are now marketing crapware-
less machines as a competitive advantage (as a byproduct of their Rapidboot
initiative), and hope maybe other vendors will try and compete.

I don't remember the last time I bought a Windows PC where the first thing I
did wasn't to immediately wipe it and reinstall the OS from an OEM version,
although it'd be nice not to have to do that.

EDIT: realized I started two comments in a row with "Yeah,". That makes me
almost as angry as if I'd littered the comment with "like, you know"'s...sigh

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Tyrannosaurs
I agree with every word, I just think for moderate users using mid-level or
above machines, crapware is a big enough problem that MS should be being
worried about the impact it's having on the public perception of Windows.

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newmediaclay
Absurd. It's also awesome that they continue to mock the Street by giving
their ridiculously low estimates for the succeeding quarter.

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JakeSc
I saw that - the revenue projection for next quarter is $3.5b _less_ than
revenue for this quarter.

I don't understand this. Are there any rules for making accurate revenue
projections?

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CamperBob
I'm sure not going to buy an iPhone or iPad right now, given the heavily-
rumored launch of the next-gen models in late Q3. That could be why they're
sandbagging the revenue projections.

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pbreit
There's never a bad time to buy an Apple product since the resale value is so
high.

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shriphani
Have to hand it to Apple leadership. How much has he accomplished in 12 years?
Taking leadership, turning the org around, the iPod lineup, building a super-
strong brand, then iPhone, iPad and now the Mac sees a healthy resurgence. I
am sure that if he has to start afresh, Mr. Jobs will do it and build another
apple.... what a fantastic leader.

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programminggeek
Apple is firing on all cylinders. What is hard to appreciate is just how fast
they are growing even though they are already such a big company. Can you
imagine Microsoft/IBM/Oracle growing profit 125% in a year company wide when
they are already as big as they are now?

Most companies that get this big can't keep growing at this kind of rate. Yet,
they still have a lot of room to grow in different markets - TV, PC, Mobile,
Advertising, (other?)

Incredibly impressive.

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Geee
Well, IBM isn't on markets that grow. Smartphones are obviously really hot
right now, even the 'losing' players are growing. By leading the growing
markets they can cut the biggest slice of the pie.

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MaxGabriel
Yeah, but you could say the same thing about Apple if it had stuck to making
only Macs. Also, Apple is to a great degree responsible for making some of the
markets in hot. Thus the comparison is still valid

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marklabedz
Oppenheimer mentioned that Apple is transitioning products and that it will
impact their projected revenues. Is this Lion/MBA/MB/iPhone? If so, how would
that lead to a softening of revenue?

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Anechoic
_If so, how would that lead to a softening of revenue?_

I would guess that the transition involves the iPhone 5 (or 4S or whatever you
want to call it) - announcing the iPhone 5 will kill iPhone 4 sales, and Apple
always seems to have trouble meeting demand at product introductions so
product constraints will probably mean lower sales/revenues.

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marklabedz
That makes sense. My initial thought was that iPhone "5" would lead to a spike
in demand and therefore a spike in revenue. I forgot to take into account the
ability (or lack thereof) to MEET demand. Thank you.

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aforty
Absolutely absurd and amazing at the same time. Tip your hat to Apple, nothing
else to do in this case.

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guelo
Or you can marvel in amazement at their greed in suing their competitors.

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sigzero
Please...take your trolling elsewhere.

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guelo
Please explain how I'm trolling. aforty said that there was nothing you could
do but admire Apple, I have a different yet valid reaction.

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pbreit
You do realize that the actions Apple takes are what is responsible for its
success?

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MaysonL
$11.1 billion cash flow from operations for the quarter, $76 billion in cash
and marketable securities.

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Anechoic
20.34 million iPhones in the quarter comes out to about 225,000 iPhones sold
per day.

Google recently announced 500,000 Android "activations' Android per day.

So Android still has the market share advantage?

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ugh
Tim Cook just said that they sold about 33 million iOS devices in the last
quarter. (20.34 million iPhones, 9.25 million iPads and half of the 7.54
million iPods.) That’s the number you have to compare. That’s about 363,000
iOS devices per day.

It’s quite astonishing that Apple is doing so well compared to Android. Apple
sells two phone models, two tablet models and one iPod model – compared to
dozens of Android devices, some vastly cheaper than any iPhone.

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Anechoic
ugh & tjogin, good points.

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pbreit
Apple is in a position now where it could shave off some margin on the Mac
side and try to bump that share number up to 10% or 20% or even 30%.

The world would be a better place.

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AndrewZ
The nice thing about this is that they sold 20 million iphone 4, which is
actually over an year old now ...

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j79
Exactly! I think a flood of new iPhones owners will be hitting this fall. I
know plenty of iPhone 3GS owners waiting to pick up the rumored iPhone 5. By
that point, I may even be ready to replace my iPhone 4 with the 5...

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mitchty
Chalk me up as one of those 3gs owners. I was originally waiting for the white
iphone 4, but, well by the time April rolled around there didn't seem like
much reason to bother with it anymore.

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steveb
iOS is about to displace Windows/DOS as the top selling OS in the U.S. A
Microsoft OS has probably been the top seller for the last 30 years.

Just a rough back of the envelope calculation is 12-13 million iOS devices
sold in the U.S. this quarter. (7 million iPhone, 3.5 iPad, 1.6 iPod Touch at
35% US/Global).

In comparison, 2Q11 non-Mac PC sales in the U.S. were about 16 million (and
shrinking).

iPhone 5 on sprint/T-mobile and iPad 2 Christmas sales will give iOS a good
chance to take the lead.

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ugh
What about Android? It seems that worldwide quite a few more Android devices
than iOS devices are activated per day. Are less than 35% of all Android
devices sold in the US?

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gte910h
Where do you get that number?

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ugh
From Apple’s and Google’s Q2 quarterly earnings call, respectively.

Google just announced that they activate 550,000 Android devices per day.
That’s in all likelihood (and considering the language) not an average value
for the whole quarter but only the most recent value (that must have been
rapidly growing during the last quarter). Still, the average for the last
quarter is probably over or around 500,000.

Apple doesn’t publish any such numbers but it’s easy to estimate them. Apple
sold 20m iPhones, 9m iPads and 8m iPods. Tim Cook said during the earnings
call that about half of those iPods run iOS. That’s about 33m iOS devices
altogether for the whole quarter, for an average of 360,000 sold devices per
day.

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pennig
So many billions.

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shawndumas
billions and billions...

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lancewiggs
their $75 billion in cash and negotiable securities compares with eBay's July
19th enterprise value of $37.5 billion, Microsoft's $188 billion, Sony's $28.5
billion and Google's $160 billion. They could buy eBay or Sony for cash.

Enterprise value is market capitalization (value of all the shares) less debt.
Apple's was $316 billion on the same date.

Note - Apple is great at making awesome products, and most likely lousy, like
everyone else, at taking over lousy companies.

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kamagmar
I thought enterprise value was market cap _plus_ debt?

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BobbyH
Yes, enterprise value (EV) is equity market capitalization (stock price times
# of shares) plus the market value of debt (this can be lower than the book
value of debt). Financial analysts often prefer to calculate something called
"Net Enterprise Value", which is EV minus "excess cash" (total cash minus
"required cash", where required cash is usually calculated as a certain % of
sales). Net Enterprise Value gives you the present value of all future cash
flows to the firm (you are ignoring the value of today's excess cash, which
doesn't come from future cash flows). This is particularly useful when looking
at companies like AAPL with tons of cash.

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protomyth
and Lion comes Wed. Don't think they've ever announced a release date on a
financial call.

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offshore_guy
I think we need a windfall tax on Big Apple.

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jacques_chester
Will you offset the windfall tax with payments when Apple makes losses?

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hackermom
Bombastic numbers as usual. So, when can I get an MB Pro 13" with an up-to-par
screen resolution? :)

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rexf
A matte screen without having to choose an upgrade on the 15" MBP please.

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jarek
Would you like an ExpressCard slot with that?

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xcode
While Apple is doing great, I see some flatlining starting next year once the
market for high-price computers start to saturate. Just an opinion.

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arjn
why is this comment being down-voted ?

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dougws
Probably because people have been predicting this kind of thing for years. It
is also worth pointing out that only 18% of Apple's ridiculous revenue comes
from Mac sales.

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c2
To be fair, people have been predicting both sides of the coin for a while.
People predicting success on hacker news tend to get upvoted, and people
predicting failure tend to be downvoted, regardless of the reality of the
situation.

Right now Apple is doing great. I would still question the sustainability of
this business as an investor. What's next after ipad?

Long term, 5 years say, ipad/iphone margins will evaporate and Apple will need
a series of "big things" to fill in the gaps to even have a flat growth curve
to justify their market cap - that's my prediction.

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bbgm
And if any company has a track record over the past decade of delivering "big
things" it's Apple. No company in recent history comes even close. Can they?
Who knows, but if anyone can, it's Apple.

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c2
One decade is great. Plenty of companies have had their one decade in the sun
- Microsoft, Cisco, IBM... Standard Oil.

I think your comment is a bit of hyperbole, the success of a company like
Apple is not unprecedented in history. Apple could continue doing "big things"
over the next decade, I just seriously doubt their ability to continue their
growth and justify their market cap over the next 5-10 years. That's all.
Possible, yes, in my opinion extremely, extremely unlikely.

And also like clockwork, I had a comment explaining why I thought they would
fail, and have downvotes.

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rimantas
Take Microsoft: they are making most of the money off the same two products
for _decades_ —OS and Office. Now take apple: 47% of they revenue is from
product which was introduced four years ago (iPhone). 21%(!) comes from
product which was released merely _a year ago_ —iPad.

Apple is not afraid to kill its cash cow if they think they have a better
product in line—see how they dealt with iPod line before the iPhone—they were
replacing the most popular model with something new.

I have no doubt Jobs has a vision many years into the future. It was amazing
to watch his 1997 WWDC keynote and realize that now we see the fruits of his
thoughts then.

