Apple Q1: The iPod Has Left The Building (AAPL)
We'll let SAI's Henry Blodget explain the pros and cons of paying attention to quarterly numbers, guidance, and whisper numbers tomorrow. And we're not going to try to analyze why AAPL is plummeting in after-hours trading. But we can explain how Apple's business units performed in the last quarter. (See our spreadsheet.) The short version: The iPod, which helped Apple revive its fortunes just five years ago, is on its way out. And Apple is becoming a computer company again.Apple sold 22.1 million iPods during the holiday quarter; the division's $4 billion in revenue was 42% of the company's $9.6 billion total. But as we pointed out last week, iPod unit sales growth is anemic. (See chart below.) Apple sold just 5% more iPods last quarter than it did in the year-ago quarter -- its fourth straight quarter of decline in year-over-year unit sales growth. That's okay for now -- Apple still sold more iPods last quarter than ever before, and revenue was up 17% y/y. But that revenue growth number was down a hair y/y, and the company will increasingly rely on its iPhone and Mac businesses for growth.
Mac unit sales increased 44% year-over-year. The company sold 2.3 million Macs, accounting for $3.6 billion in revenue -- 37% of the company's total sales. While laptops made up 58% of Mac unit sales, desktop unit sales outgrew laptops. Desktop unit sales grew 53% year-over-year -- about five times faster than the overall computer market, per IDC -- while laptop unit sales were down a hair sequentially, and up 38% year-over-year.
In the no-duh category: The iPhone is a big hit. The company sold 2.3 million in the quarter, at a rate of about 25,000 per day. With revenue coming from both phone sales and kickbacks from carriers, iPhone customers are a lot more valuable to Apple than iPod customers. So while iPod growth slows, it looks like Apple's cellphone division will be able to drive gadget sales growth.
The big unknown: How will a slowing economy affect Apple's Q2 sales? Execs barely touched the question during tonight's earnings call, only noting that it's baked into their (below consensus) Q2 guidance.
Recent Apple coverage:
Apple Quarter Preview: Real Risk of a Miss
Apple's Real Growth Story Is Intact
Apple Wins The Movie Wars! The Movie Wars Haven't Started!
The Macworld Flipside: Apple's iPod Sales Growth Slowing
Holiday Apple Mac Sales "Ginormous"
AT&T Corporate iPhone Deal: No Thanks
Apple: UK iPhone Sales Below Plan
Unlocked iPhones Not Flying Off French Shelves
http://www.businessweek.com/technology/ByteOfTheApple/blog/archives/2008/02/is_there_troubl.html
http://www.roughlydrafted.com/2008/02/22/the-ipod-crisis-myth/#more-1571
Your article is a clear attempt at FUD. Your credibility has been called into question.
Nyanta
So, Apple is leaving (not really) the mp3 player and moving in to a new device that is a wifi device that does more than just play music. It is a mini computer that also plays music and rent movies.
The entry point of this new device is $299. Compare this with a $79 entry point for the iPod.
As for the guidance, what is new? Apple said that it says what it can backup. That is Apple is confident that it will sell 6.8 bn. That is a nice piece of confidence...
As for the recession, Apple also pointed out that for last year second quarter it expected an increase of 21% and for this year second quarter it expects an increase of 29%.
I really want to know if analyst read and pay attention to what is said!!!
Sure, The "Number" of iPods customers received was not as huge as people would like, but the number of dollars that Apple pulled in was much higher.
The reaction to this earnings report was indicative of a larger problem with the economy, not with AAPL. Had this report not come out in this market, we would never have seen the kind if fall that we are seeing after hours.
Smart investors will wake up and watch this for the best entry point and dive in deep. This company is poised to grow much more than a music player provider.
AND unlike some companies like Moto who after the hit RAZR just shrugs and offers up the anemic RAZR 2 as a sequel ... Apple sold 2.3 million iPhones in 1 QUARTER so the iPhone is really the iPod 2 ... Apple has already plotted out the NEXT move timed right as iPod sales are not growing by 25% a year - humm, imagine that - smart thinking ... from Apple. What a shocker.
10 million iPhones would be about 10% growth on top of the normal 5% growth - again, what company would turn down 15% growth when they are talking about 100 million units A YEAR?
AND not only that, Apple essentially DOUBLES/TRIPLES their iPod revenue with the iPhone because not only are all sales $399 and higher, they will get about $250 or so from each phone operator so while unit growth might be 15%, revenue growth really makes it more like 25-35% EVERY YEAR ... that's not to say everyone will recognize this and buy up shares but it's fumb to bet against Apple based on growth within 100 MILLION UNITS as your base ...
Have you guys posted/analysed on EBAY. Is EBAY a buy or a strong sell before earnings.
Looks like malls are empty, discounts are still running high in kohls, jcp, etc, AXP and Tiffany have warned. End to End slowdown is happening.
Ebay is already struggling. Should i punt a few puts down 30% from the current money to hit a jackpot. Any analysis will be helpful for me :)