Apple Announces Most Profitable Quarter in History 761
zacharye writes with an except from an article over at BGR about Apple's quarterly results: "'Disappointing' though it may have been to some, the iPhone 4S propelled what is now confirmed to have been the most profitable quarter any technology company has ever recorded. Apple on Wednesday reported record earnings for the December quarter, revealing a profit of $13.06 billion on revenue that surpassed $46 billion. Among technology companies, Apple's fiscal first quarter represents the most profitable quarter ever recorded. Only one U.S. company has ever posted a more profitable quarter — Exxon managed a profit of $14.8 billion in the third quarter of 2008 — and the driving force behind Apple's record-setting performance was quite clearly the iPhone."
WebOS (Score:5, Interesting)
As a WebOS fan, this makes me sad. Why would HP give up on such an incredibly profitable market after only investing $3.3billion http://techcrunch.com/2011/11/21/hps-failed-webos-experiment-cost-them-3-3-billion-but-whats-next/ [techcrunch.com] ? The iOS and Andriod user experiences still have not passed WebOS smoothness, in my opinion, though the notification systems are catching up.
Although HP's management style of WebOS reminded me of: "They say you gotta spend money to make money. I don’t know what went wrong. We spent all our money." - Tom Haverford
Re:Bubble? (Score:2, Interesting)
Re:Who Cares? (Score:5, Interesting)
It shows that nerds are wrong and Apple is right.
Seriously, you're confronted with an existence-proof.
Massive profits (Score:2, Interesting)
Courtesy of outsourcing manufacturing to China.
I'm a bass player. For years, it's been common that high-quality expensive gear is made in the US, and cheap knockoffs overseas.
Now, Apple has re-defined that. They will gouge your eyes out for high-quality (if you believe their absurd marketing schemes, that is) hardware that is still made overseas.
$13 billion in profits is probably not entirely derived from short-changing their American workforce (who seriously believes those things can't be made here -- I don't) and adding to the already bursting trade deficit.
I guess I shouldn't complain, though. In America, the land of milk and honey, it's now considered fortunate to have a shitty McJob. God forbid the middle class could afford the fruits of their own labor.
Re:Bubble? (Score:5, Interesting)
They make very little from the software/media sales. Gross margins on the hardware are huge though: 44.7%. Tim Cook indicated in the conference call that that's probably not a sustainable number (their margins are typically in the high 30s). But the raw numbers of devices they sold grew by stunning amounts. Even Mac volumes rose by more than 25%, and that's in a PC industry that's not doing that well in aggregate.
Say what you want pro or con about their products, but they know how to make stuff that people want to buy.
Case in point: Verizon reported that iPhones accounted for 55% of their smartphone sales last quarter. That's against how many different models of Android phone?
Just where does your Android phone comes from? (Score:5, Interesting)
They are building all their products in China. What's so hard to figure about this?
So is everyone else. Everyone else is not enjoying this level of increase in profits quarter after quarter, or the same margins that Apple has.
Only Apple as far as I know has started moving any production (the A5 chip) back into the U.S.
OK, Foxconn will now pay the workers a few Renminbi more
They already do, and yet Apple's sales surge.
Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
Of course some people seem to think that Windows and Android are winning.
It all depends on your definition of winning. One of the analysts covering the mobile industry was being interviewed on CNBC after Apple reported their quarterly results. This analyst claimed that 94% of current iPhone users would buy another iPhone but only 47% of current Android users would by another Android device.
Re:That was sad (Score:5, Interesting)
I completely agree. Having used Android, iOS and WebOS I agree that WebOS was a superior platform to both of them. However, WebOS failed on two fronts:
WebOS failed where Apple succeeded because WebOS didn't have the cult following, and WebOS failed where Android succeeded because many hardware manufacturers made Android devices.
Everyone has to admit that the flagship WebOS device, Palm Pre, was a beautifully designed device. It even made the iPhone look like an eye sore, but it was clear from day one that without the support of the fanboys and without the blessing of the hardware manufacturers it was just not going to go anywhere.
Re:Who Cares? (Score:5, Interesting)
None of the other phone or tablet makers have this kind of profit margin, yet their products easily match the iOS products
in quality and ease of use.
1) "match the iOS products in quality and ease of use." We'll have to agree to disagree on that one. Most Android phones I've seen (with some very few exceptions) feel cheap, they feel much cheaper than they are in fact.
2) Android makers get the OS for free, remember Apple does more than just sell the hardware. There's R&D, software development, patents to be bought, etc.
3) Even with a free OS, show me the phones and tablets significantly undercutting iOS devices while providing the same quality. And the "going out of business, please buy our inventory" sales don't count.
If apple cut their prices the "cool factor" would be diminished, and the fanbois would move onto something else. If they aren't over paying top dollar its just obviously not the best thing ever.
To me calling people "fanbois" and looking down on them because they think "the mainstream is so cool but they don't know what's cool, I know what's cool" just makes you another hipster. Just accept there are people who like something different from you, is that so difficult ? I can see why people like Android or Windows Phone, that doesn't make them idiots or "fanbois" just people with other needs.
Re:Who Cares? (Score:4, Interesting)
Apple now has $96 billion in cash/equivalents.
Which means that the $100M spent on Android lawsuits accounts for just over 0.1% of their current cash (equivalent) reserves. Barely a blip on the quarterly report.
Re:Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
The reason for the high rate of defection is not because Android is not as good as iOS, but rather because so many people pick up free (on a two year contract) low end Android devices and those really tend to be very bad.
Google has done such a great job of showing people what a great platform Android is that people start to think that every Android handset is like a Galaxy S. Many people are still picking up no-name-brand Chinese specials running an outdated version of Android and cursing their decision everyday. Not every Android device is a Galaxy S2... and consumers need to realise that.
Re:Nokia and RIM (Score:5, Interesting)
Yeah... when you look at the global stats (not just the US and Europe) you see that about a third of all smart phones sold each quarter run Symbian OS. http://gs.statcounter.com/#mobile_os-ww-monthly-201101-201112-bar [statcounter.com]
It is easy to forget that when we talk about iOS, Android, Blackberry and Windows Phone, we are talking about touch screen smart phones - which still make a tiny portion of the number of handsets sold globally, but a huge portion of the revenues earned by the industry.
Re:Bubble? (Score:4, Interesting)
I've always wondered about this statistic.
When you compare a single company to a country, you have to consider demographic differences. For example, suicide rates are generally higher among the unemployed, among the mentally unstable, among the elderly, etc.
Foxconn employs people who are young, healthy, sane, not on drugs, and (obviously) gainfully employed. What is the national rate among that demographic, and how does Foxconn's rate compare? My guess is not favorably.
Re:Money is the final decider? (Score:2, Interesting)
If people keep throwing money at them, Apple will decide what is "right". They're doing it for their users already.
Stuff that people want to buy. KEY PHRASE. (Score:4, Interesting)
Everyone I know has gone Mac in the last 2-3 years, and most have a story like mine. I was committed hardcore to another platform, though I had more than a few complaints. Still, no expectation of ever switching.
But the iPhone was a quantum leap in consumer technology. I was using a Palm, which was "not a bad smartphone" the month before the first iPhone announcement was made. Then iPhone was released and after 10 minutes using it I knew it was a completely different class of device. Within a few months I had realized that I couldn't keep my hands off one and bought it. Rather than let me down and gradually disappoint me, leading to rationalization and acceptance (the usual model for technology buys of all kinds), it continued to impress weeks and months into ownership and I have had no desire to switch—only to upgrade—ever since.
When iPad came out, I was absolutely sure I didn't need one, but ended up using one regularly for reasons unrelated to my own consumerist impulses. But boy did it drive those consumerist impulses... Again, within months I had bought one and it has becomemy most used and relied upon work device.
After those two experiences, Mac OS didn't seem far off, and already being in love with iPhone/iPad based on my own use of them, the one annoyance I had with them was the way that they seemed not to mesh as well with other platforms (in my case, Linux, but the same goes for Windows) as they do with Mac OS. So I resolved never to spend Mac-level money, but to buy a very old old used Mac and a Mac OS update pack, and get the OS X pack running on a hackintosh machine to "test the waters." I built a hackintosh box for $250 or so with a dual core mainboard, Firewire-800, and a RAID-1, and within a week of using it I knew I would soon migrate my life from Linux (where it had been since 1993) to Mac OS.
Within six months of going "Mac OS only," though, the difference in quality and hardware/software integration between my iPhone/iPad and my other technology devices (a hackintoshed desktop and a hackintoshed Thinkpad) was painfully obvious and I knew that I was done for—I really, really wanted access to true Mac hardware to avoid the niggling little issues and flaws of PC world hardware that seemed increasingly apparent to me.
Got a MacBook Pro 13" machine last January, finally.
It is the best computing device I have ever owned, bar none. Build quality is exceptional, fit and finish are so precise and refined that you feel as though it wasn't made by humans, but by perfect machines. Even the ThinkPads I'd always owned had little things that I'd never noticed. For example, I would never have said that the power switch was slightly crooked or that there was a little key vibration and noise in some keyswitches, or that the hinge had uneven tension throughout its range or that the display was a bit uneven in its brightness UNTIL getting and really using a MacBook Pro. The build quality is measurably better. It has raised my expectations for technology goods.
Aside from that, the ergonomics are also much better. Apple's touchpad and keyboard, though very foreign to me at first, have now enhanced my work speed considerably. For example, the key travel distance and key "give" on the chicklet keyboard has given me another 10-15 wpm in typing speed with no loss (indeed, a gain, thanks to keys not touching each other) in accuracy.
And of course beyond all of these things, there are just fewer fatal flaws. No BIOS to worry about. Exceptional battery life. No need to fuck around with drivers. No "update hell" in which the latest round of absolutely necessary updates kill some functionality in your system that you rely upon, leaving you installing/uninstalling/tweaking in a desperate haze for hours or days (problems seen both in Windows and in Linux). Just massive, massive piles of It Works Without You Having to Think About It, and It's Tough as Nails to Boot.
My parents and siblings' families have gone Mac (something I never thought would happen, an
Re:Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
I bought a Droid shortly after they came out. My wife bought an iphone right around the same time.
I was cursing the Droid probably 6 months after I got it. The thing was just slow, unresponsive, and sucked.
Fast forward last fall. The Droid was locking up constantly, while the iPhone was still quite responsive and felt like new (almost--two major OS revisions had slowed it down a bit.) I couldn't ditch Android fast enough.
It's not just the low end phones.
Re:Who Cares? (Score:4, Interesting)
I know the fundamentals of AAPL back up its valuation. So maybe, the purchase habits of consumers in our society have gotten way out of whack with reality.
Re:Bubble? (Score:4, Interesting)
> Apple's success is the limited variance. They make a few models of each device, and generally a good/better/best option for each
That is certainly a factor.
See: http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html [ted.com]
For why choice is a bad thing for consumers.
Re:Bubble? (Score:4, Interesting)
I hadn't realized you're the same person who posted the initial comment, so please don't think I was singling you out.
However, you ARE misusing statistics. Maybe not intentionally, but you are all the same. You can't just say "this stat is easily available, therefore I'll apply it" while ignoring all of the factors that would clearly run against your conclusion. For example, the median American wage right now is $33k. If Microsoft decided it was going to pay it's engineers $40k, you wouldn't say, "That's a good salary, because it's above what most people make." You have to compare apples to apples.
Re:Scaled Tariff (Score:5, Interesting)
However, the solution to a trade gap is not protectionism. It may help in the short term, and appear to be an ideal solution but it only hurts the economy as a whole and stifles growth.
Examples? This seems to be an oft-quoted talking point, but I've seen few evidence to support it.
I do have a counter example. Brazil has high import tariffs, which apply, among other things, to Apple products. Did Apple pull out of Brazil? Hell no. Foxconn is building a factory in the country now so that they can manufacture locally and dodge the tarrifs. End result: numerous local jobs which feed right back into the country's economy, and, of course, all those workers pay taxes, too.
It's perfectly logical, too. Apple can outsource manufacturing to China to cut costs, but they can't sell as many of their gadgets there as they'd like to (to make profits like the one in TFA). They need rich countries for that - the kinds of countries where workers are not overworked and starved so they have interest in fancy gadgets like that, and paid well so that they can afford them. So if you just make that particular method of cutting costs unprofitable - via tariffs, for example - you'll see manufacturing plants in U.S. and Europe in no time.
And no, you can't compete with China otherwise. Not unless you are willing to bring the standard of living down of their level - and not to the level of Chinese middle class, which is the lucky 200 million; but down to the level of those factory workers, who think of their 12 hour job as God's grace compared to what they face otherwise.
Re:Nokia and RIM (Score:5, Interesting)
There are only 3 models of iOS phones currently being sold. You can't expect one of the tens-hundreds of Android phones to outsell anything on a platform of only 3 models.
And the reason for this is that Android users have Choice - this is a Good Thing, not a Bad Thing.
It's only good to a point to where the models are actually supported. If you buy a smartphone and the mfg never updates the software or supports it afterwards due to the next big thing coming out, I don't see how anyone can see that as a good thing, unless the model was near perfect at launch. Having too much of this Good Thing leads to bad things.