
Apple Reports Fourth Quarter Results - ugh
http://www.apple.com/pr/library/2010/10/18results.html
======
danilocampos
The iPad sales are just staggering. Moving that many units of a product that
didn't even exist a year ago, in a category that was long thought dead, is
incredible.

Identify an optimal user experience, polish the hell out of it, then perform
an airtight integration of every single component, from end-to-end. The
software and hardware, the content ecosystem, the physical distribution, all
of it fits together perfectly.

When you look at it closely, Apple, as a portfolio of talent, technologies and
interacting businesses, resembles the sort of microorganism that Intelligent
Design proponents advance as evidence of a god. Everything cooperates in such
a concerted, integrated way it's almost impossible to imagine developing any
of it in simpler phases.

In a world filled with corporations whose in-fighting and conflicting agendas
make them look like mosh pits, Apple has the tightest marching band in
history.

edit: Also, anyone notice how often Apple reports their "best quarter ever?"

~~~
apike
_When you look at it closely, Apple, as a portfolio of talent, technologies
and interacting businesses, resembles the sort of microorganism that
Intelligent Design proponents advance as evidence of a god._

Having been an Apple employee, it's funny to me when people describe Apple
this way. If you think of their operations as perfect, godlike, or seamless,
you have no chance of really understanding them or replicating the good parts
yourself.

At Apple there are indeed conflicting agendas, moments of doubt, in-fights,
technical debts, and lame-duck products. There might be less of these things
than other big companies, but it's still just a group of thousands of
individuals trying to make great stuff.

~~~
danilocampos
> Having been an Apple employee, it's funny to me when people describe Apple
> this way. If you think of their operations as perfect, godlike, or seamless,
> you have no chance of really understanding them or replicating the good
> parts yourself.

A completely agree, so I think you may have missed my point.

It's worth noting that I think Intelligent Design is horseshit, so god leaps
neither from that argument nor from Apple for me. For reference, here's the
background:

Flagellar motor (real):

[http://en.wikipedia.org/wiki/Flagellum#Evolution_of_flagella...](http://en.wikipedia.org/wiki/Flagellum#Evolution_of_flagella_and_debate)

Irreducible complexity (horseshit):

<http://en.wikipedia.org/wiki/Irreducible_complexity>

Apple, of course, _did_ evolve from a much less complex organism than it is
now, but the overall harmony of its successful products is impressive and
demonstrably difficult to replicate. The easy route is to ascribe supernatural
powers to Apple's success, but of course the history demonstrates methodical
system planning, keen insight, hard work, a bit of fanaticism, and some good
timing.

The difference between Apple and other organizations is that while in-fighting
and conflicting agendas may exist (as in any human system) this doesn't seem
to get in the way of a coherent user product. Compare that with Sony, which
can't muster a coherent consumer strategy to save its life. (Well, absent
saddling every last product with the proprietary storage device du jour.)
Apple may itself not be seamless but the overall experience for _users of
Apple products_ is shockingly so, especially when compared to competing gear.

What internal back biting can you share from your tenure at Apple, though? It
would be interesting to learn just how aggressively leadership must filter and
otherwise confine these impulses to end up with the focus, profits and product
mix we see today.

~~~
apike
_It would be interesting to learn just how aggressively leadership must filter
and otherwise confine these impulses to end up with the focus, profits and
product mix we see today._

A big key is that things don't ship unless Steve thinks they're great. There's
lots of stuff that doesn't ship, and lots of stuff that isn't pursued.
However, as a consequence, there's a lot of internal competition to get
Steve's attention - or to not get Steve's attention if you're in a services
group.

~~~
danilocampos
Oh, too interesting. So because Steve holds the keys to the kingdom,
incentives align in such a way that competition within Apple surrounds
capturing his interest. Every system has an exploit – Apple's would then
depend upon hacking Steve, or his circle, for maximum personal gain. Steve
ends up being the filter for ambition that doesn't match Apple's long term
agenda, while amplifying ambition that does. He's sitting at a loom, weaving
all the stuff he likes into the long term vision and squashing everything
else.

Thank you for posting and describing it this way – it's interesting and not
how I originally thought of it, but of course it makes perfect sense.

The basic kernel of replicable process here seems to be:

    
    
      *Create a single point of accountability for product
      *Exercise restraint and focus
      *Have uncompromising taste
    

It doesn't necessarily scale well, but Apple's numbers suggest it doesn't
really need to.

(aside: Putting it this way, Jobs reminds me of the Illusive Man.)

~~~
aaronbrethorst
Saigon...Shit.

(Sorry, just realized that was way too cryptic. the Illusive Man was a
character in Mass Effect 2 voiced by Martin Sheen. Martin Sheen, of course,
played the main character, Willard, in the eminently quotable Apocalypse Now.
One of the best lines in the film, in addition to the oft-quoted "I love the
smell of napalm in the morning. It smells like...victory," as stated by
Colonel Kilgore is Willard musing to himself: "Saigon...shit. I'm still only
in Saigon."

Incidentally, Sheen was drunk during the filming of the opening scene, and
really did cut his hand up. I highly recommend watching the making-of
documentary Hearts of Darkness if you ever have the chance.)

~~~
gonzo
Everyone gets everything he wants. I wanted a product, and for my sins, Steve
gave me one. Brought it up to me like room service. It was a real choice
product, and when it was over, I never wanted another.

------
aaronbrethorst
Down 5.8% (-18.70) in AH trading:
[http://www.google.com/finance?client=ig&q=AAPL](http://www.google.com/finance?client=ig&q=AAPL)

edit: whew, and seeming to stabilize around a 4.5% drop still leaving it above
$300. I was amazed it broke $300 so easily last week and was afraid it'd fall
back below with this drop.

~~~
jamesaguilar
Why so down? I assume market expectations were higher than what they reported,
but in what categories did Apple fall short / what else was as good as
expected?

~~~
seb
The Ipad and Ipod sales are much lower then expected.

~~~
protomyth
iPod sales were expected (more iPhone victims), iPad expectations are just
unrealistic.

~~~
gamble
No kidding. They sold 80% of the consensus prediction of 5 million units. That
still puts Apple on track to sell at least 16 million iPads in its first year
on the market.

Minimum retail price for an iPad is $500. 16m units X $500 = at least $8
billion gross revenue.

How many companies can take a new product line from $0 to $8+ billion in one
year? It may 'disappoint' the analysts in a technical sense, but Apple's
shareholders should be doing cartwheels at this news.

------
ugh
Steve Jobs is just now highlighting Android’s “fragmentation” and discussing
Android’s openness. He is also talking about upcoming tablets and their 7"
screens. (Trash talking them, that is. No 7" screen from Apple anytime soon.)
Ars Technica is blogging:
[http://arstechnica.com/apple/news/2010/10/liveblog-q4-2010-e...](http://arstechnica.com/apple/news/2010/10/liveblog-q4-2010-earnings-
call.ars)

~~~
solutionyogi
Select Q&A:

Q: What do you think about the 7" tablets?

A: one naturally thinks a 7" screen offers 70% of the benefits of a 10"
screen, but this is far from the truth a 7% screen is only 45% as large as a
10% screen because the measurements are diagonal. This size isn't sufficient
to create great tablet apps, in our opinion. One could increase the resolution
to make up for the difference, it's meaningless unless the thing also includes
sandpaper so users can sand down their fingers.

Another comment by Steve:

"It's being grabbed out of our hands. I talk to people every day in every kind
of business who are using iPads boards of directors, nurses, doctors, etc. The
more time that passes, the more i am convinced that we have a tiger by the
tail here."

Q: Could this be your second biggest business behind iPhone?

A: I try not to predict, I just report.

Q: Any updates on you stance on Flash?

A: Ah, Flash memory? We love Flash memory! [I wonder if the reporter who asked
the question understood the joke. ;)]

Q: So if the market starts to move toward lower-functionality smartphones and
dramatically lower price points, and you feel you can't make an appropriate
product on those price points, you'll throw in the towel?

A: You're looking at it wrong. you're looking at it as a hardware person who
doesn't know much about software. who doesn't think about an integrated
product and thinks the software will just take care of itself. You assume the
software will just somehow come alive on this product you're dreaming up, but
it won't. Because these app developers are taking advantage of products that
came before it, with larger screens and more capabilities. it throws you back
to the beginning of the chicken and egg problem again most developers won't
follow you.

Pure gold from Steve. Competitors better listen to this call and learn from
the man himself.

\-------------------------------------------------

You really gotta hand it to Steve. Absolute no corporate speak (aka bullshit)
when he talks. Compare this with recent email from Steve Ballmer,

"I sent a message to the world that we’re ‘all in’ when it comes to the cloud.
In that speech I noted that Ray’s Internet Services Disruption memo nearly
five years ago, and his work since, stimulated thinking across the company and
helped catalyze our drive to the cloud." (from
[http://www.microsoft.com/presspass/press/2010/oct10/10-18ste...](http://www.microsoft.com/presspass/press/2010/oct10/10-18steveb-
mail.mspx) )

Cloud? Why do executive use the word 'cloud' when the word 'Internet' is so
much better. 'Stimulated thinking'... 'catalyze our drive', looks like someone
has been reading too much of Dilbert.

The difference between Steve Jobs and Steve Ballmer is staggering.

~~~
kenjackson
Actually the term "cloud" and "internet" generally mean different things. The
cloud refers to services sitting on endpoints that you don't maintain (or
likely don't own either).

The internet generally refers to the communication infrastructure between
endpoints. You can be all in on the internet and not care about the cloud. The
opposite is more difficult though.

Also Steve's 7" answer seemed odd. The iPod Touch is a 3.5" tablet. He's
saying that he can't figure out how to create a device that made good use of
twice the diagonal?

~~~
solutionyogi
Can you give me some example of 'cloud' services? Aren't they web
application/services?

And Apple classifies iPod touch as portable music player/gaming device and not
3.5" tablet.

~~~
kenjackson
Cloud services don't have to be web services, although it is becoming more
common that they are.

FTP sites are often hosted for a single user or small group of users who host
and maintain the site. They own the burden of full site upkeep. It's not
something that sits in this "cloud", but its a service on the internet that
they maintain.

There's another thing that is implicit about cloud services, which is why I
choose the FTP example, which is that the content on the service that is of
most value is the content you, the user put in the service. So CNN.com, while
a service on the internet, isn't generally considered a cloud service. Whereas
FaceBook, Flickr, and GMail are examples of cloud services.

------
kgutteridge
27 million iOS devices in the last 3 months, thats a very nice demographic to
target that does not seem to be slowing down even with Androids rapid growth
also gaining real momentum, I like being in mobile its certainly interesting!

~~~
megablast
Android is doing well, but we know that Apple users buy apps, not so much with
android users.

~~~
jokermatt999
I think part of the reason is not just the whole Android culture of free, but
the poor Market experience. Once Google cleans up the Market, I think sales
will increase. Perhaps not to iOS levels, but I would be surprised if there
isn't a significant improvement.

------
mattmaroon
I wish I was Apple's CFO. That strikes me as right up there with San Diego
Weatherman as the easiest job in the world. Yesterday was sunny and 80
degrees, today is sunny and 80, and tomorrow is going to be sunny and 80.

~~~
CamperBob
Then when it does rain, they come after you with tar and pitchforks.

------
barredo
Most interesting of the press release "We still have a few surprises left for
the remainder of this calendar year."

~~~
mattparcher
(This sentence is immediately preceded by a highlight of iPhone sales and a
dismissal of iPhone competition from RIM.)

~~~
mattparcher
Just to clarify, it was my impression that the coming “surprises” specifically
relate to the iPhone, based on the context of the statement.

(Though, as glhaynes notes, we are now less than two days away from the “Back
to the Mac” event, which will almost certainly have a number of non-iPhone
surprises.)

------
lwhi
Steve Jobs is an amazing showman. He's got the ability to work the _full_
crowd, but he'll always have his eye on the audience members who have reserved
the box seats .. the VIPs (i.e. shareholders).

By ensuring that shareholders are delighted, he makes sure that the show is
lubricated with enough cash; so that they're able to ensure even more daring
stunts and fireworks are available for the next season's performances.

I think it's wrong to assume that Apple are perfect. In my opinion, there are
many things that could be improved about their products, but Jobs realises
that perception is _everything_ and he's worked hard to ensure that Apple's
image is carefully crafted and actually fulfils emotional needs that Apple's
customers have grown to appreciate - and would gravely miss if Apple wasn't
around.

The amount of vitriol that's produced by Apple's advocates (when the parent
company is attacked) consistently amazes me.

Watching the show from the cheap seats, I'm reminded how every business action
can serve multiple aims. Every (slightly or even, overtly) nefarious action
can be teamed with a more egalitarian or idealistic aim; each of which can be
used by advocates to fight Apple's corner. It's supremely clever work.

I'm not sure if a corporation which operates such a cunning, clever operation
should necessarily be congratulated every time they release results. When
smoke and mirrors are involved, I think it's worth trying to preserve some
critical judgement.

------
dasht
Hehe.

You know the old saying "always darkest just before the storm"?

How's about: "always highest revenue just before the bubble bursts"?

Huge numbers of consumer leaders or consumer suckers have, in the past few
years, bought lots of this line of products. Either a large number of them and
non-buyers agree "Well, that was worth it" or, the opposite.

Place your bet.

(I'm not saying "droid wins" or "MSFT wins". I'm saying "the category of
products is suspect for sustained growth ... Apple is just accelerating the
rate at which we find out.")

~~~
mattparcher
To be honest, each time Apple has a record quarter (which has been quite often
lately) folks doubt that they will sustain that growth, but they’re almost
always proven wrong.

Where is Apple slowing? In Macs, which see only modest increases year over
year, and iPods, which are in _decline._ But both of those categories are not
losing to competitors — they are being cannibalized by Apple itself, who is
busy selling incredible numbers of iPhones and iPads.

If you’re wondering whether Apple’s customers are happy, Apple just earned the
highest-ever score in the American Customer Satisfaction Index, in large part
due to the iPad: [http://digitaldaily.allthingsd.com/20100921/ipad-boosts-
appl...](http://digitaldaily.allthingsd.com/20100921/ipad-boosts-
apple%E2%80%99s-customer-satisfaction-rating/)

~~~
macrael
I'm not sure I would characterize the Mac growth as "modest" for the past
several years they gave been growing several times faster than the industry
average.

~~~
mattparcher
Indeed, “modest” is very much an understatement to describe Mac sales :)

Everything is relative, and in the greater market context, Macs are strong.
But among Apple’s products, the iPhone brings revenue equal to Macs, and
arguably greater potential greater, with the iPad not far behind — likely
catching up to Macs by 2012. [1]

[1] [http://aaplmodel.blogspot.com/2010/09/ipad-to-exceed-mac-
rev...](http://aaplmodel.blogspot.com/2010/09/ipad-to-exceed-mac-revenue-
in-2012.html)

------
protomyth
one of the Q&A yielded the AppleTV number at being over a 250,000

------
jscore
I guarantee in a generation or so we will look back and do case studies of
Apple and Steve Jobs. What made them so successful, etc. Things like to how to
develop amazing products, create compelling user experiences, create new
markets, market to customers, etc, etc.

Companies like this aren't created everyday.

------
melling
Will iPad sales dissuade developers from using Flash or promote the
development of iPad apps to augment rich Flash sites?

~~~
glhaynes
I think the onus is now on Flash developers now to make the case for why Flash
is necessary in new development. And I think that's an important threshold.

~~~
benologist
It's not really. Right now Flash can be used to deploy for iOS _finally_
thanks to Jobs' recent change of heart so essentially "Flash vs. iOS" is a
solved problem (although it needs and will get more work from Adobe).

Flash cops a bad rap but it is a massive platform for gaming with hundreds of
millions of people _choosing_ Flash games over every other form of
entertainment and distraction all day, every day. Yesterday I tracked almost 6
million people that collectively spent 171 _years_ playing Flash games.

There are a handful of technologies that promise we'll be able to make once,
deploy everywhere - whoever does it best is going to win the developers. It's
not Flash vs. iOS, it's "how do I get my game on n platforms". Adobe fancies
themselves in the running, people are working on positioning Mono to solve
that problem, Unity are a very likely contender, and of course there's HTML5.

~~~
lukasb
Given that different OSes have different UI idioms and capabilities, it's not
clear that "write once, deploy everywhere" is the right strategy.

~~~
benologist
That's pretty much what I said - it's a problem that Adobe, Mono, Unity etc.
are hoping they can solve for us.

I don't think it'll ever be as simple as write once, deploy anywhere ... but
write once, in one language, and deploy everywhere with minimal fuss is an
admirable goal.

~~~
msbarnett
> That's pretty much what I said - it's a problem that Adobe, Mono, Unity etc.
> are hoping they can solve for us.

It's a problem that companies have been trying to solve, in one form or
another, since the advent of the microcomputer.

I'm highly sceptical that a solution is ever going to appear. There is no
silver bullet that will allow you to paper over the significant differences in
platforms in a transparent, non-clunky manner.

~~~
benologist
It's a problem that HTML5 is promising to solve too, and that HTML/CSS/JS in
_general_ did a pretty good job at in many use cases.

~~~
panic
Francisco Tolmasky (of 280 North / Cappuccino fame) had an insightful blog
post about this subject:

 _But let’s get to the real issue here, because this is once again a
misunderstanding of design vs. programming. HTML, JS, and CSS do not magically
create wonderful experiences on every platform they are run. As you can see
from the above screenshot, they certainly have the nice side effect of working
on said platforms, but if you’re expecting HTML to somehow handle the subtle
and explicit differences between a handheld multitouch peripheral and a
desktop application, well then you’re doing it wrong. These are completely
different environments and they require completely different designs and often
implementations._

[http://www.alertdebugging.com/2009/11/04/mockingbird-
cappucc...](http://www.alertdebugging.com/2009/11/04/mockingbird-cappuccino-
and-what-really-matters/)

------
linuxhansl
Not a single cent of my money.

I stopped using Apple products when they started to lock down the iPods (by
using encryption) and tied devices to a specific installation of iTunes.

And do not even get me started on the closed platforms that are the iPhone or
the iPad (i.e. the Apple Store).

The amount good will this company has with consumers is staggering.

~~~
forensic
Your religion is not serving you.

~~~
linuxhansl
Yes, I could have stated it more friendly:

I disagree with Apple's policies so I do not buy their products. On some level
I also do not understand why not more people are bothered by Apple.

~~~
Skroob
Because the things you think are important just aren't to most people.

