Runaway train
Apple's unstoppable growth last year was often juxtaposed with the company it overtook at the top of the tech tree. First it topped Microsoft's market cap, then its revenue, now there's a decent chance that the last remaining objection to Apple's tech supremacy has been overcome - profit.
In the last quarter of 2010 - its fiscal Q1 - Apple reported a profit of six billion dollars. We haven't got Microsoft's results for the equivalent quarter yet, but in the previous one it banked a mere $5.41 billion, so it would have had to increase its profit by $600 million just to keep up with Apple.
Needless to say this was a record quarter for Apple. Its revenue of $26.74 billion what not only a massive increase on the previous quarter's $20 billion, but a 70 percent increase on the same quarter a year ago. Margin is also improving and the profit was closer to an 80 percent increase year-on-year.
Onto product categories: the 4.13 million Macs sold were 23 percent up on a year ago, while iPhone sales were up 86 percent to 16.24 million. Considering iPod sales are in decline as a direct consequence of the popularity of the iPhone, a fall of a mere seven percent to 19.45 million is not a bad effort. There's no year-on-year iPad sales comparison available yet, but the 7.33 million sold is 75 percent up on the previous quarter, making a grand total of 15 million sold so far.
"We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales," said Steve Jobs, Apple's CEO. "We are firing on all cylinders and we've got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can't wait to get their hands on."
"We couldn't be happier with the performance of our business, generating $9.8 billion in cash flow from operations during the December quarter," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the second fiscal quarter of 2011, we expect revenue of about $22 billion and we expect diluted earnings per share of about $4.90." EPS this quarter was $6.43.
We tried to listen to the earning conference call but despite having to restart our PC to install Quicktime, the file still wouldn't play, so we're referring to a transcript from Forbes. Stand-in CEO Tim Cook took the chair alongside Oppenheimer, with Jobs convalescing. He concluded by observing that 80 percent of the largest companies are deploying or piloting the iPad.
The best quotes were reserved for the competition - specifically Android tablets. Cook observed that Android, in its current form, is a smartphone OS not designed for tablets, so: "...you wind up with a scaled up smart phone, which is a bizarre product in our view."
Considering iOS was only optimised for tablets last November, with the iPad having run a special variation of the OS for the first seven months of its life prior to that, we think Cook's comments are a tad disingenuous there. He also revealed the nature of Apple's corporate culture when he said he finds it hard to understand why someone would buy any other tablet.
Having said that, if any company is entitled to be arrogant right now, it's Apple.
