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Apple earnings: $97.6 billion in the bank, and other highlights

posted by Technology @ 5:21 PM
Tuesday, January 24, 2012
Apple Store, San Francisco

Apple just reported its best quarter of all time, as covered by my colleague David Sarno here on the Technology blog.

The Cupertino tech giant reported a boost in sales of iPads, iPhones and Mac computers (but not iPods), pushing it into a record quarterly revenue of $46.33 billion and $13 billion in profit for the first quarter of the company's 2012 fiscal year.

Let's take a closer look at Apple's huge numbers for the quarter ended Dec. 31, which showed strong holiday sales and sent shares in the company up 8% after the markets closed Tuesday.

Cash balance — One major number to note from Apple's earnings report, as mentioned in its earnings call, is that the company has a cash balance of $97.6 billion, up from $81 billion a year ago.

That's a massive amount to be sitting in the bank and it's a sum Apple will spend in part on developing new products that will help it remain competitive against rivals such as Samsung, Sony, HTC and Motorola.

Revenue — Apple racked up $46.33 billion in sales in the 14-week quarter, which is up from $26.74 billion in the same quarter a year ago.

Profit — The tech giant reported a $13-billion profit last quarter, which is more than double the profit the company reported for its first fiscal quarter of 2011.

IPhones — Apple sold 37.04 million iPhones in the last three months of 2011, which marks 128% growth from a year earlier, when the company sold 16.25 million iPhones.

IPads — Sales of the ever-popular Apple tablet grew 111% when compared to the year-earlier quarter, with 15.43 million iPads sold for the company's fiscal 2012 first quarter  versus 7.33 million iPads sold in the first quarter of 2011.

IPods — The iPod isn't dead yet, but it is on the decline. Apple sold 15.4 million iPods last quarter, down 21% from 19.45 million iPods sold a year earlier.

Mac computers — Apple's Mac line of desktop and laptop PCs — which includes MacBooks, iMacs, Mac Minis and the Mac Pro — saw a 26% increase in sales from the year-ago quarter, with 5.2 million Macs sold in the first fiscal quarter of 2012 and 4.13 million Macs sold in the first fiscal quarter of 2011.

"Portables," which would include the MacBook Air and MacBook Pro laptops, made up the majority of Macs purchased, with 3.71 million units sold last quarter, up from 2.9 million sold a year ago. Apple sold 1.48 million desktops last quarter, up from 1.23 million sold a year earlier.

Looking ahead, Apple said Tuesday that it is projecting it will record about $32.5 billion in revenue in the second quarter of its fiscal year.

[Updated: An earlier version of this post incorrectly stated that Apple's profit for the first quarter of its fiscal year was $6 billion. Apple reported a $13 billion profit last quarter and recorded $6 billion in profit a year earlier.]

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Apple loses bid to ban Samsung Galaxy Tab 10.1 in Netherlands

– Nathan Olivarez-Giles

Nathan Olivarez-Giles on Google+

twitter.com/nateog

Photo: An Apple Store in San Francisco. Credit: Justin Sullivan/Getty Images

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Apple reports record sales of iPhones, iPads and Macs

posted by Technology @ 3:27 PM
Tuesday, January 24, 2012

Apple exec Philip Schiller

Apple Inc. is selling a whole lot of just about every product it makes — and investors are loving it.

The company's stock shot up more than 8% after it announced that the holiday quarter was its best ever, with revenue and profit setting all-time records. Apple sold more iPhones, iPads and Mac computers than in any three-month period in its history.

The company smashed Wall Street projections with revenue of $46.33 billion in the three-month period ended Dec. 31, more than $7 billion more than analysts had expected and a 74% increase over its quarterly revenue from a year earlier. Profit was just as strong: Apple's $13.06 billion in earnings beat analysts' expectations by $3 billion, and the number more than doubled from the same quarter a year earlier.  

"They just demolished it," said analyst Peter Misek of Jefferies & Co. "Everyone thought they were too big — that there was too much information out there and they couldn't pull off a surprise like this, but boy did they ever."

Apple's bestselling product continued to be its iPhone. The company sold 37.04 million of the devices, by far eclipsing its iPhone sales record of 20.3 million set in the April to June quarter. It also took a leap forward with its iPad, selling 15.43 million units of the tablet computer — more than 4 million more than it had sold last quarter in its previous quarter. Apple sold 5.2 million Mac computers, beating its mark of 4.9 million, also set last quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Chief Executive Tim Cook in a statement. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline."

Analysts expect that Apple will have a strong year of new products, possibly announcing a new iPad in March, a newly redesigned iPhone during the summer and potentially an Apple-branded television set later in the year.

RELATED:

Apple iPad 3: Launching in February, March, or later?

Apple loses bid to ban Samsung Galaxy Tab 10.1 in Netherlands

Apple's iBooks 2, iBooks Author: Bids to own publishing's future

– David Sarno

Photo: Philip Schiller, Apple's senior vice president of worldwide marketing, discusses a new textbook initiative in New York last week. Credit: Mark Lennihan / Associated Press

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Apple's new iBooks 2, iBooks Author and iTunes U apps are moves to capture the future of education and self-publishing

NEWS ANALYSIS: Alongside Apple stating that iBooks 2 and textbooks on the iPad would reinvent the textbook as we know it, the iPad-maker announced Thursday that it would also attempt to reinvent book-making by way of an app called iBooks Author.

The Apple-developed app, available as a free download from the Mac App Store, (ideally) makes it easy to make books for the iPad. But together, iBooks 2 and iBooks Author are moves to capture the future of education and self-publishing, and to continue to build on the success Apple had under the late Steve Jobs.

If you've ever used Apple's Keynote or Pages (or Microsoft's PowerPoint or Word) apps, then you should be able to hit the ground running in iBooks Author. There are templates for different types of book layouts, and adding the interactive 3-D models, photos, videos and diagrams that Apple demoed iBooks 2 textbooks on Thursday is as easy as clicking and dragging a built-in widget — provided you've already produced the video, photos, diagrams and models you want to use.

Apple has even built into iBook Author HTML5 and Javascript support for programmers looking to take their books beyond what the app can do itself; multi-touch interactions for pinch and zoom views of photos and swiping gestures are also included.

Want to see what your book looks like before you publish it to iBooks? Just connect your Mac to an iPad by way of a USB cable and you can preview the book on the tablet.

The aim of the iBooks Author app is to make it easy to get these impressive multimedia elements, as well as questionnaires and other educational materials, into a page of text and published as a book on the iPad as easy as possible — whether you're a self-publisher looking to write your first book, a teacher whipping up something quick for a special class, or a publishing powerhouse like the textbook trifecta of McGraw-Hill, Pearson and Houghton Mifflin Harcourt.

Before his death, Jobs told biographer Walter Isaacson that he believed Apple could disrupt the $8-billion-a-year textbook industry. Jobs said in Isaacson's book, titled simply "Steve Jobs," that the iPad was the tool to make transformation in the textbook business a reality.

According to the book, Jobs' idea "was to hire great textbook writers to create digital versions, and make them a feature of the iPad. In addition, he held meetings with the major publishers, such as Pearson Education, about partnering with Apple."

Jobs told Isaacson "the process by which states certify textbooks is corrupt … but if we can make the textbooks free, and they come with the iPad, then they don't have to be certified. The crappy economy at the state level will last for a decade, and we can give them an opportunity to circumvent that whole process and save money."

In announcing the iBooks 2 and iBooks Author products, Apple is beginning to bring a piece of Jobs' long-term vision to fruition. The company also noted Thursday that there are currently about 1.5 million iPads being used in schools and more than 20,000 education apps sitting in its iOS App Store.

But make no mistake, iBooks 2 and iBooks Author aren't just about textbooks. The two new apps are working together to entice students, teachers, educational institutions to embrace and buy the iPad in bigger numbers than they already have.

On Thursday, in announcing the new products, Apple made no mention of new discounts on iPads for students or schools — though Apple has offered such discounts in the past on Macs and even created special versions of the iMac for schools. Apple even built the now-defunct eMac line specifically to sell to schools.

Apple wants us to ditch the paperback and hardcover textbooks in favor of an iPad and digital downloads, that much is obvious. But the company also wants the iPad and Macs to become to go-to devices for educational institutions and publishing houses.

Although Apple's iTunes is the world's most popular online music storefront, Amazon is the world's largest seller of e-books. By adding a level of interactivity to books that Amazon and others simply can't match, and by making it easier to publish a book and sell it in the iBooks app directly from iBooks Author, Apple has made a move to challenge Amazon and its Kindle e-reader and Kindle Touch tablet as the preferred platform for self-publishers and digital textbooks.

In a statement announcing iBooks 2 and iBooks Author, Apple said as much (without naming Amazon and other e-book rivals such as Google and Barnes & Noble).

"iBooks Author is also available today as a free download from the Mac App Store and lets anyone with a Mac create stunning iBooks textbooks, cookbooks, history books, picture books and more, and publish them to Apple's iBookstore," Apple said.

The apps are also a challenge to Adobe, a company Apple has been known to partner with and feud with from time to time. Adobe's Creative Suite, Digital Publishing Suite and Touch Apps, available on both Windows PCs and Macs, are some of the most popular tools used by publishing houses and self-publishers looking to create a book, whether an e-book or a book before it heads to print.

Though capable of producing many different types of content for a broader range of devices, Adobe's software can cost thousands of dollars, while Apple's iBooks Author app is free.

Apple on Thursday also released an iTunes U app, which allows teachers from kindergarten to the university level to stream video of their lectures and post class notes, handouts, reading lists, etc., all within the app.

Previously, iTunes U was a podcasting service for college professors who wanted to put up video or audio of their lectures. Now it is one more reason for a teacher to consider an iPad and a Mac as tools to reach students at any grade level. And like iBooks Author, the app is free.

In my opinion, Apple is one of the best companies out there at providing lower-cost products that pull consumers into an ecosystem of apps and gadgets. It's one of the reason the company has so many cult-like followers.

For many Apple fans, their first purchase was an iPod or iPhone. With those purchases comes buying apps, music, movies and TV shows from iTunes. And for many, later comes a MacBook or an iMac computer. This strategy is repeating itself with iBooks 2 and iBooks Author.

First, get students and teachers to use more iPads in school by offering affordable and engaging digital textbooks. With iBook textbooks capped at a price of $14.99, I have to wonder whether or not textbooks will become shorter and more narrow, and thus students and teachers we'll have to buy more of them. Second, make it easy for anybody to produce their own iBooks (textbooks or otherwise) and then sell those books in the iBooks app, luring in aspiring authors. When those students, teachers and authors go to download music or a movie, set up a cloud storage service or buy a laptop, a phone, a new tablet — maybe someday a TV — what brand will be at the top of minds? Apple.

iBooks, iBooks Author and iTunes U, together are a move to fend off Google, Amazon, Adobe and other competitors in determining the future of education, publishing and book reading. Together, the launch of these apps is an attempt to not only maintain but also expand Apple's current success into the company's post-Jobs future.

RELATED:

Apple says iBooks 2 app reinvents textbooks

Apple iPad 3: Launching in February, March, or later?

Apple looms large over the Consumer Electronics Show, despite not showing up

– Nathan Olivarez-Giles

Nathan Olivarez-Giles on Google+

Twitter.com/nateog

Photo: Apple's iBook Author app on an iMac, and an iBook and an iPad. Credit: Apple

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Apple design master Jonathan Ive awarded British knighthood

posted by Technology @ 8:48 PM
Friday, December 30, 2011

IveThat's Sir Jony Ive to you.

As of the new year Apple's head of design, Jonathan Ive, will be a knight of the British Empire. The London-born engineer has been the lead designer at Apple for more than 15 years and grew to become the "spiritual partner" of the company late co-founder Steve Jobs, according to Jobs himself.

The two collaborated on creating the look and feel of Apple's many successful consumer electronics products.

Reached by the BBC about the honor, Ive reportedly said it was "absolutely thrilling."

"I am keenly aware that I benefit from a wonderful tradition in the U.K. of designing and making," he said. "I discovered at an early age that all I've ever wanted to do is design."

As described in a Times profile earlier this year, Ive is responsible for the look of Apple's iPod music player, the iPhone and the iPad tablet, all blockbuster products in their own categories.

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– David Sarno

Photo: Jonathan Ive of Apple in Cupertino, Calif., in 2008.  Credit: Paul Sakuma / Associated Press

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Macbookair

Apple's MacBook Air is poised to remain the dominant player in the ultrabook market next year, despite a wave of new ultra-thin notebooks slated to debut in the coming months, one analyst predicts.

Apple's super-thin, super-light laptop has been a hit with consumers, and its momentum "is sustainable and likely has upside potential," JP Morgan analyst Mark Moskowitz said in a note to investors Monday.

Previously, "we highlighted the MacBook Air as potentially becoming a $2-[billion to] $3-billion-plus revenue opportunity," he said. "Our latest view is that this ultra-thin notebook PC appears on track to becoming a $7-billion-plus revenue driver at Apple."

Moskowitz said that ultrabooks continue to be highly discretionary devices and that pricing for rival offerings must fall below $800 before posing a real threat to the MacBook Air. And beyond price, he said, other devices simply don't look as good or offer as much.

"In our view, Apple's first mover advantage and optimized feature set and form factor command a higher price that early adopters, productivity users, and Apple enthusiasts are willing to absorb," he said. "In contrast, we think that the first round of ultrabook offerings lacks the right blend of features and attractive price points to grab market share from Apple."

The MacBook Air costs $999 to $1,599. 

RELATED:

Apple updates the MacBook Air, axes the white MacBook

Apple's Mac App store hits 100 million downloads in year

Apple to become PC leader, report says — if iPad counts as a PC

– Andrea Chang

twitter.com/byandreachang

Image: Apple's MacBook Air. Credit: Apple

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Apple’s Mac App Store hits 100 million downloads in year

posted by Technology @ 10:55 AM
Monday, December 12, 2011

App-store

Apple has hit 100 million downloads from its online software shop, the Mac App Store. 

When the company opened the digital shop in January of this year, its goal was to put an end to the old days of PC software on a box — the kind users bought from brick and mortar stores like Best Buy or Fry's, or Babbage's, or Software Etc., or Egghead Software, or the Softwarehouse, or CompUSA. (Am I missing any obvious ones?)

After all, the logic goes, software is just 1's and 0's — so why would you need to drive somewhere to pick up a shrink-wrapped package full of it?

So far, the approach appears to be working. The store is averaging 8 million downloads per month this year. That includes the summer launch of Lion, the latest version of its Macintosh operating system, which sold more than 1 million digital copies in its first day, far outpacing sales of any previous OS X release. 

What the company did not say is how many of the 100 million apps downloaded were, specifically, its operating system — or how many of them were counted from the many free apps available on the store. 

However, some companies do approach online software sales by offering free and paid apps.  Autodesk Inc. offers a simpler, free version of its AutoCAD software through the store, and its $900 AutoCAD LT version for pros (or amateurs that get hooked).

Apple also said its iPhone and iPad-based App Store hit 18 billion total downloads. That store went online for the iPhone and iPod Touch in 2008.

– David Sarno (@dsarno)

Image: Graphic of Mac App Store Logo.  Credit: Rob Boudon / Flickr

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