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Apple Riding a 51% Jump in Mac Sales
By JOHN MARKOFF
Published: April 24, 2008
SAN FRANCISCO — Signs of a consumer slowdown abound in the United States, but Apple customers appear not to have noticed.
Steven P. Jobs, Apple’s chief executive, said increased traffic at the company’s retail stores led to stronger sales. Above, the reflection in an Apple Store window in San Francisco on Wednesday.
Buoyed by unusually strong Macintosh sales, the company grew notably faster than the rest of the computer market worldwide in the first three months of the year. Revenue increased 43 percent from the same period a year ago, the company reported. Steven P. Jobs, Apple’s chief executive, characterized the quarter as the strongest in Apple’s history.
He attributed the growth to higher traffic in the company’s 181 stores in the United States. The company reported that it had 33.7 million visitors to its stores in the United States, up 57 percent from the same quarter a year ago. Mr. Jobs said that belied the gloom that was being expressed about the American economy.
“We’re not economists, so we don’t have any more insight than everyone else, but there were sure a lot of people in our stores last quarter,” Mr. Jobs said in an interview.
Despite new products like the iPhone, variations of the iPod and the Apple TV set-top box, this was a Macintosh quarter. Apple shipped 2.3 million Mac computers in the quarter, 51 percent more than in the quarter a year ago. Revenue on those computers increased 54 percent.
But it also said it sold 10.6 million iPods during the quarter, flat with the year-ago quarter. Analysts said iPod sales were within their expectations and that it was a sign that the product category was maturing,
“The big question was, would Apple really feel the pinch from a weakening U.S. consumer? And the somewhat unequivocal answer was, no, not yet,” said A. M. Saggonaghi Jr., a senior analyst at Bernstein Research
Apple said that net income in its second quarter rose 36 percent from the year-ago quarter, to $1.05 billion or $1.16 a share, on revenue of $7.51 billion.
The results far exceeded the expectations of Wall Street analysts. They had expected $1.07 cents a share and revenue of $6.96 billion, according to a survey of analysts by Bloomberg.
The company, based in Cupertino, Calif., also forecast strong sales in the coming months. Peter Oppenheimer, Apple’s chief financial officer, said the company expected third-quarter revenue of about $7.2 billion and earnings of about $1 a share.
Apple’s stock has declined 17.9 percent since the beginning of January when it peaked near $200 a share. After drifting below $120 a share, the stock has begun to recover since March. Shares on Wednesday closed up, rising $2.69 to $162.89, but then declined 26 cents, to $162.63 in after-hours trading over concerns that Apple’s profit margins were weaker than analysts expected.
If there is a weak spot in the company’s battle plan, it may be the iPhone smartphone, which has had stellar sales in the United States, but has showed weakness in Europe. Apple said it sold 1.7 million iPhones for the quarter. “In my mind iPhone sales were soft,” said Charles Wolf, a financial analyst at Needham & Company. “It’s a question of the distribution model and of the price. The price clearly has to come down.”
Apple’s executives said the sales of iPhones exceeded internal company projections during the quarter.
Analysts and the industry are expecting Apple to introduce a higher performing version of the iPhone within the next two months, made for faster 3G data-oriented cellular networks. Mr. Jobs is under pressure to meet his 10 million iPhone sales forecast by the end of 2008. To meet that goal the company needs a second-generation iPhone, and it may also need to push the price of the existing $399 iPhone down significantly or introduce a stripped-down model.
Analysts have said that as the second quarter progressed, demand for Apple’s iPhone increased and that the computer maker was unable to keep up with demand. The supply issue could have been affected by the limited availability of 16-gigabyte flash memory chips, Mr. Wolf speculated.
He said that the more interesting story for the quarter may be the gains that Apple is making in PC market share, predominantly in the laptop computer segment.
International Data Corporation’s survey this month showed Apple with a 6 percent share of the American market in the first quarter, compared with 4.9 percent a year ago. Apple’s strong Macintosh growth comes as Microsoft struggles with its Windows Vista operating system, which was released last year to largely critical reviews. “I think people are really noticing the difference between Mac OS X and Windows to a greater degree than ever before,” Mr. Jobs said. “The more people understand that there is an alternative, the more people are choosing a Mac.”
On Wednesday, Apple confirmed that it had acquired PA Semi, a Silicon Valley chip company with expertise in low-power microprocessors, an essential technology for future iPhones. Forbes.com first reported the acquisition, which it said was for $278 million in cash. Neither company disclosed the amount of the deal.
The chip maker had originally hoped to supply Apple with chips intended for a microprocessor used in earlier Macintosh computers and by I.B.M. However, when Apple began using Intel microprocessors for the Macintosh, PA Semi was left without a major customer.
The decision to buy PA Semi is likely to be a blow to Intel, which recently introduced a new low-power chip called Atom.
By JOHN MARKOFF
Published: April 24, 2008
SAN FRANCISCO — Signs of a consumer slowdown abound in the United States, but Apple customers appear not to have noticed.
Steven P. Jobs, Apple’s chief executive, said increased traffic at the company’s retail stores led to stronger sales. Above, the reflection in an Apple Store window in San Francisco on Wednesday.
Buoyed by unusually strong Macintosh sales, the company grew notably faster than the rest of the computer market worldwide in the first three months of the year. Revenue increased 43 percent from the same period a year ago, the company reported. Steven P. Jobs, Apple’s chief executive, characterized the quarter as the strongest in Apple’s history.
He attributed the growth to higher traffic in the company’s 181 stores in the United States. The company reported that it had 33.7 million visitors to its stores in the United States, up 57 percent from the same quarter a year ago. Mr. Jobs said that belied the gloom that was being expressed about the American economy.
“We’re not economists, so we don’t have any more insight than everyone else, but there were sure a lot of people in our stores last quarter,” Mr. Jobs said in an interview.
Despite new products like the iPhone, variations of the iPod and the Apple TV set-top box, this was a Macintosh quarter. Apple shipped 2.3 million Mac computers in the quarter, 51 percent more than in the quarter a year ago. Revenue on those computers increased 54 percent.
But it also said it sold 10.6 million iPods during the quarter, flat with the year-ago quarter. Analysts said iPod sales were within their expectations and that it was a sign that the product category was maturing,
“The big question was, would Apple really feel the pinch from a weakening U.S. consumer? And the somewhat unequivocal answer was, no, not yet,” said A. M. Saggonaghi Jr., a senior analyst at Bernstein Research
Apple said that net income in its second quarter rose 36 percent from the year-ago quarter, to $1.05 billion or $1.16 a share, on revenue of $7.51 billion.
The results far exceeded the expectations of Wall Street analysts. They had expected $1.07 cents a share and revenue of $6.96 billion, according to a survey of analysts by Bloomberg.
The company, based in Cupertino, Calif., also forecast strong sales in the coming months. Peter Oppenheimer, Apple’s chief financial officer, said the company expected third-quarter revenue of about $7.2 billion and earnings of about $1 a share.
Apple’s stock has declined 17.9 percent since the beginning of January when it peaked near $200 a share. After drifting below $120 a share, the stock has begun to recover since March. Shares on Wednesday closed up, rising $2.69 to $162.89, but then declined 26 cents, to $162.63 in after-hours trading over concerns that Apple’s profit margins were weaker than analysts expected.
If there is a weak spot in the company’s battle plan, it may be the iPhone smartphone, which has had stellar sales in the United States, but has showed weakness in Europe. Apple said it sold 1.7 million iPhones for the quarter. “In my mind iPhone sales were soft,” said Charles Wolf, a financial analyst at Needham & Company. “It’s a question of the distribution model and of the price. The price clearly has to come down.”
Apple’s executives said the sales of iPhones exceeded internal company projections during the quarter.
Analysts and the industry are expecting Apple to introduce a higher performing version of the iPhone within the next two months, made for faster 3G data-oriented cellular networks. Mr. Jobs is under pressure to meet his 10 million iPhone sales forecast by the end of 2008. To meet that goal the company needs a second-generation iPhone, and it may also need to push the price of the existing $399 iPhone down significantly or introduce a stripped-down model.
Analysts have said that as the second quarter progressed, demand for Apple’s iPhone increased and that the computer maker was unable to keep up with demand. The supply issue could have been affected by the limited availability of 16-gigabyte flash memory chips, Mr. Wolf speculated.
He said that the more interesting story for the quarter may be the gains that Apple is making in PC market share, predominantly in the laptop computer segment.
International Data Corporation’s survey this month showed Apple with a 6 percent share of the American market in the first quarter, compared with 4.9 percent a year ago. Apple’s strong Macintosh growth comes as Microsoft struggles with its Windows Vista operating system, which was released last year to largely critical reviews. “I think people are really noticing the difference between Mac OS X and Windows to a greater degree than ever before,” Mr. Jobs said. “The more people understand that there is an alternative, the more people are choosing a Mac.”
On Wednesday, Apple confirmed that it had acquired PA Semi, a Silicon Valley chip company with expertise in low-power microprocessors, an essential technology for future iPhones. Forbes.com first reported the acquisition, which it said was for $278 million in cash. Neither company disclosed the amount of the deal.
The chip maker had originally hoped to supply Apple with chips intended for a microprocessor used in earlier Macintosh computers and by I.B.M. However, when Apple began using Intel microprocessors for the Macintosh, PA Semi was left without a major customer.
The decision to buy PA Semi is likely to be a blow to Intel, which recently introduced a new low-power chip called Atom.
The rest are AMD, until they go bankrupt.
(Maybe)
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