Macintosh and iPod drive Apple - New York Times
SAN FRANCISCO, April 25 Apple Inc. surpassed even the
most optimistic forecasts for its usually tepid second
quarter, delivering an 88 percent increase in profit on
strong sales of Macintosh computers and iPod music players.
The company said on Wednesday that its profit rose to $770
million from $410 million in the comparable quarter last
year. Apple sold 1.5 million Macs in the quarter, a record
for the company.
In an interview, Steven P. Jobs, Apple's chief executive,
called the quarter a "blowout," and noted that the strong
sales and market share gains came even though the company
had not made any major upgrades to its lines of portable
and desktop computers.
"The Mac is clearly gaining market share, with sales
growing 36 percent more than three times the industry
growth rate," Mr. Jobs said. Overall personal computer
sales increased only about 11 percent during the quarter,
according to the market researcher IDC.
Apple's strength was particularly notable in that it came
during the quarter in which Microsoft finally released the
long-awaited Vista version of its Windows operating system,
an event that the PC industry was counting on to spur a
wave of computer upgrades.
Mr. Jobs noted that Dell had recently returned an earlier
version of Windows to its product line, which he said was
an indication that demand for Vista had not been
Apple reported revenue of $5.26 billion, an increase of
more than 20 percent over the $4.36 billion in the same
period last year. Per-share profit increased to 87 cents
from 47 cents.
On average, analysts were expecting earnings of 64 cents a
share on sales of $5.17 billion for the quarter, according
to a survey by Thomson Financial.
Apple executives said the company benefited from lower
component costs, as well as surging demand for notebook
computers. Of Apple's total computer sales, 59 percent were
The earnings report sent shares of Apple up more than 7
percent to $102.44 in after-hours trading on Wednesday,
topping the $100 mark for the first time. The shares rose
$2.11 to close at $95.35 in the regular trading session.
It was Apple's profitability during the quarter that most
impressed Wall Street analysts. Its gross profit margin
reached 35.1 percent, up from 29.8 percent in the year-ago
quarter. Company executives said it was the company's most
profitable second quarter ever. Sales typically slow in the
second quarter as it comes between the holidays and buying
for school in the fall.
"They're defying the laws of gravity when it comes to
profitability," said Eugene A. Munster, an analyst at Piper
Peter Oppenheimer, Apple's chief finance officer, told
analysts +that he expected gross margins to decline during
the third quarter, to about 32 percent. Apple tends to sell
lower margin computers to school districts in the third
quarter, and component prices are also expected to be
higher, he said.
In the third quarter the company expects revenue to climb
to about $5.1 billion and earnings to reach about 66 cents
a share, slightly lower than analysts' forecasts.
Mr. Munster said the appeal of the Macintosh was clearly
expanding beyond its traditional niche. "There's a global
shift in how people see personal computers for
entertainment, creativity and good looks," Mr. Munster
said. "Apple has found that sweet spot, and with almost no
Apple said Mac sales accounted for 56 percent of revenue
during the second quarter, with music-related products,
including iPods and iTunes sales accounting for the other
Apple sold 10.5 million iPods during the quarter. Earlier
this month the company said it had sold a total of 100
Apple had earlier said it was delaying the release of the
next version of its Mac operating system, called Leopard,
because it needed to divert resources to its iPhone
project. The iPhone is scheduled to ship in late June,
through an agreement with Cingular, and cost between $500
and $600. Mr. Oppenheimer said that because Apple planned
to deliver periodic software enhancements to the iPhone,
accounting rules would require it to book deferred revenue
and costs and amortize both over a two-year period.
Apple said it ended the second quarter with $12.6 billion
- On Apr 26, 2007, at 6:29 AM, Paolo Tramannoni wrote:
> And Corel continues to think the Macintosh market is not interestingActually, they don't seem to think that.
In this recent discussion they acknowledged that the Macintosh market
is growing and they showed some interest in developing for the
Check out the posts by Jay Larock.
Whether this will result in them actually developing for the Mac
again though, is anybody's guess.
Randy B. Singer
Co-author of The Macintosh Bible (4th, 5th, and 6th editions)
Macintosh OS X Routine Maintenance