10 Aces Up Apple's Sleeve
Apple Earnings: Another Blowout Quarter For Apple
Apple's earnings calls have become as predictable as the seasons. Just as predictable ares investors' reactions to each successive quarter of ridiculous profit and revenue. Apple's Q3 earnings earlier this week was like a big summertime party, with ice cream for everyone -- except for Apple's competitors, of course, who were left wondering if anything is going to stop this runaway freight train.
Here CRN presents some of the most notable -- and in some cases, downright astonishing -- bits of information that Apple executives revealed during the Q3 earnings call.
Enterprises Lovingly Embracing The iPhone
It's no secret that business users are buying iPhone with the same zeal as consumers. But just how many enterprises are testing and deploying iPhones for their employees? Try 91 percent of the Fortune 500, up from 88 percent last quarter, according to Apple.
Meanwhile, Apple says 57 percent of Global 500 firms are testing or deploying iPhones, including companies such as AXA, Credit Agricole, Nestle, Dow Chemical, GlaxoSmithKline, SUPERVALU and Comcast. The old 'iPhone is just a toy' argument seems pretty funny at this point.
Enterprises Going Ga-Ga Over iPad
Apple sold 9.2 million iPads during its Q2, a 183 percent jump from the same quarter last year. Revenue from sales of iPad and iPad accessories increased 179 percent to more than $6 billion. These are startling numbers, but Apple's claim that 86 percent of Fortune 500 companies are deploying or testing iPad is just as noteworthy.
"We continue to be delighted by the diverse and sometimes, unexpected use cases we see around iPad," Apple CFO Peter Oppenheimer said in the call.
With 47 percent of Global 500 are deploying or testing, there's room for Apple to run. Who's willing to bet that figure won't be much higher in a few months? Most of all, enterprise iPad sales really put a crimp in HP and Cisco's argument that businesses are afraid of the security and management risks associated with iPad and are looking for alternatives.
How Apple Goes To Market In The Enterprise
Apple COO Tim Cook talked about the company's "dual-prong strategy" for selling iPhones and iPads into enterprises. Apple provides training to carriers' sales forces, which are well attuned with selling into enterprise accounts.
"Plus we do some sales, directly our sales or act as an overlay sales force to a channel that sells to enterprise," Cook said in the call. "And I would characterize this as we're still building it out and we do a bit better each quarter." So there you have it. However, one has to wonder how much better the iPhone and iPad sales figures would be with the full and active participation of a vibrant base of true Apple channel partners.
Who's Getting Cannibalized By iPad?
There's been a lot of talk about iPad and other tablets "cannibalizing" PC sales. In a Q&A during the call, Apple COO Tim Cook acknowledged that this macabre sounding phenomenon was indeed impacting Mac sales. However, Cook deftly shifted the focus to Windows, which has a much larger market share, as Microsoft often points out.
"We also believe that even more customers chose to purchase an iPad over Windows PC. And as I've said before, there's a lot more of the Windows PC business to cannibalize than the Mac," Cook said in the Q&A.
Cook: Android Activations Tough To Gauge
Cook also took a swipe at Google by suggesting that unlike Apple, which breaks out its iPhone, iPad and iPod Touch sales, Android's growth is much harder to measure. According to Google's most recent figures, the company is activating 550,000 Android devices every day.
"I think the Android activation number is a difficult one to get our hands around," Cook said during a Q&A after Apple's earnings call.
Mac OS X Lion, iOS Customers Will Get Access To iCloud
With Mac OS X 7 Lion, and with iOS, Apple is giving customers access to iCloud services when they become available this fall. Apple is deferring $22 for each new Mac, $16 for each iPhone and iPad and $11 for each iPad Touch it sells over the next four years as part of its iCloud offer.
Apple unveiled iCloud earlier this month at its WWDC 2011. The cloud service lets users automatically save content like photos, music, documents and more into the cloud so it is accessible from up to 10 devices.
Apple Retail Revenue Jumps 36 Percent
Apple retail store revenue rose from $3.5 billion from $2.6 billion during the year ago quarter, with iPad, iPhones and Mac sales leading the charge. Some 73.7 million visitors crammed into Apple stores during Q2, up 22 percent from the 60.5 million that crammed into Apple stores last Q2.
Apple opened 4 new stores in the quarter, including 2 in France, 1 in the U.K. and 1 in Germany, ending with a total of 327. With an average of 325 stores open, average revenue per store was $10.8 million compared to $9 million in the year ago quarter, an increase of 20 percent. Apple is planning to open 30 new stores in Q3, including its first store in Hong Kong.
Apple's Mountain Of Cash
Apple's cash for short-term and long-term marketable securities was $76.2 billion at the end of Q2, compared to $65.8 billion at the end of Q1. The company's cash flow from operations was $11.1 billion, an increase of 131 percent year-over-year.
App Store Passes 15 Billion Downloads Mark
App Store statistics are starting to acquire McDonald's-like status, with 425,000 apps available currently and over 15 billion downloads served up to date. Apple has paid out $2.5 billion to iOS developers since opening its iOS App Store three years ago this month.
The 'Frenzy' Of iPad Sales
Market interest in the iPad 2 is still hot, as Cook said sales as having "absolutely been a frenzy" during the quarter. Apple is stepping up efforts to boost production and meet demand, and Cook acknowledged that this is a pretty good problem to have.
"We were still selling every unit we could make during the quarter and that was the situation as we ended the quarter," Cook said in the call.