Apple earnings still going strong post-Jobs(Read article summary)
Apple earnings report had some impressive sales numbers: a 94 percent profit increase over last year, and huge profits on iPad and iPhone sales. A lot of the growth is coming from Asian markets, and Apple earnings are expected to expand there in months to come.
Apple is sailing strong with Tim Cook at the helm. At its earnings call on Tuesday, Cupertino announced higher-than-expected revenue -- driven by a seemingly limitless market demand for iPhones and iPads.
Apple posted a record $39.2 billion in revenue and $11.6 billion in profit for the quarter ending March 31st -- almost doubling its profit from the same quarter last year. The company stock dipped before the announcement due to fears that iPhones weren't selling well, but then rose in after-hours trading by more than $40, to just over $600 per share. Put simply, investors were nervous that Apple might have lost some of its mojo -- but the numbers tell a different story.
The growth is coming almost entirely from the iOS side of things. Apple sold 35.1 million iPhones and 11.8 million iPads during the quarter -- an 88 percent increase over last year for iPhones, and a 151 percent increase for iPads -- largely in emerging markets. US iPhone activations have dropped (at least, if reports from AT&T and Verizon are to be believed) but CEO Tim Cook noted that sales in Asia, and especially in China, are soaring to make up the gap.
What does that mean for non-iOS devices? Mac sales are creeping slowly upward (a 7 percent increase over last year) but iPod sales are down (a 15 percent decline from last year). Cook noted during the presentation that iPad sales may have cannibalized some Mac and iPod sales, and it's probably safe to say that Apple will continue to focus primarily on iPhones and iPads in the coming months.
We also got a few hints of what Apple's future looks like more broadly. Cook said at one point, "I've always hated litigation and I continue to hate it," which some analysts took as an indication that Apple might be willing to settle some of the legal wranglings started by Steve Jobs -- although Cook went on to complain that he wanted other companies to "invent their own stuff." He also brushed off suggestions that Apple might merge the iPad with the Mac, saying, "You can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user." Apparently Apple is doubling down on tablets, rather than looking into convergent devices that function as both laptop and tablet. That might sting a little bit for Microsoft, since they're embracing the convergence model more or less wholeheartedly for Windows 8. Or maybe it pleases Microsoft, since it'll likely have the field all to itself.
Perhaps most significantly, Apple subtly pushed back against speculation that it's still coasting on the momentum created by Steve Jobs. CFO Peter Oppenheimer noted, "We're investing in engineering to come out with the most innovative products in the world . . . We've got some fabulous new products in the pipeline." No word on what those products might be, of course -- but Apple is clearly confident that the sales will keep on rolling in.