Apple Q2 Financial Results Conference Call

[MacRumors]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Apple is webcasting their Q2 2005 Financial Results conference call (http://www.macrumors.com/c.php?u=http%3A%2F%2Fwww.apple.com%2Fquicktime%2Fqtv%2Fearningsq205%2F) now

Conference Call Highlights

- Peter Oppenheimer: Highest March quarter revenue and net quarter income in Apple's history. Strong sales of Macs and iPods.
- Strong revenue growth, higher than expected gross margins (29%)
- Mac 62% of total revenue. Up 27%.
- 1,070,000 Macintoshes shipped
- 608,000 Desktops (up 55%)
- iMac G5, eMac, MacMini's 467,000
- PowerMacs141,000
- Portables 462,000
- 251,000 iBooks
- 211,000 PowerBooks
- Music Business - 38% of total Apple revenue.
- Shipped 5.3 million iPods during the Quarter
- New iPod Shuffle and new iPod Mini's
- Feb Data. #1 in the Flash MP3 margin. 43% market share in Flash.
- Now over 350 million songs sold on iTunes
- Retail growth
- Education Channel.
- Growth in Cash
- Next quarter will stop reporting CPU sales by product family, but instead in broad categories. Desktops and Portables to bring into line with detail in their music reporting as well as their competitors

Q&A Session

Q on supply/demand on iPods at this point across geographical regions. A: feel they reached a supply/demand balance by end of quarter
- Q: Pent up demand for Macs into this Q2 waiting for Tiger? A: Difficult to predict.
- Q: New Mac users in Retail? A: Low to mid-40% range. sales quite strong.
- Q: iPod gross Margins A: Overall line margin was a little above 20% in the Quarter
- Q: How many Mac Mini's sold? A: We're not going to do that for competitive reasons. Very pleased with customer response and sales.
- Q: Last conference call, mentioned that putting a G5 in a PowerBook would be a significant technical challenge. A: Still think it's the "mother of all" thermal challenges.
- Q: Question about future products on the magnitude of the iPod in the future? A: Can't answer that question.
- Q: MacMini and Best Buy and targets. Also we're expecting a refresh coming for PowerMacs. Thoughts about PowerMac and sales? A: Did ship some units to Best Buy at the beginning of April. On the PowerMac, the PowerMac is largely driven by our Pro business. Continue to see a desktop migration to mobile, however, the PowerMac continues to be a very important part of our lineup for many of our customers. Obviously we'll continue to announce great things w/ respect to the PowerMac.
- HP iPod sales made up less than 3% of iPod sales.
- Q: iTunes profits? A: A little above break even
- Hard Drive based marketshare 90%
- Flash based 43% (0% to 43% in the month of availability)
- 70% overall market share for Feb. Up from December Quarter

[sjpetry]

Over a million Macs. :)

[javabear90]

whoohoo my stocks goin up tonight!!!

[Daveway]

Everyone come together. http://forums.macrumors.com/showthread.php?t=120071

[Lacero]

Jan 2005, Apple introduces a low-cost computer, after users repeatedly ask and ask, Q2 profits rises to a record-high.

Jan 2006, Apple introduces a 2-button mouse for all their computers, after users repeatedly ask and ask, Q2 profits skyrocket 1,000%.

Jan 2007, Apple finally wises up, and releases OSX for PCs, thereby gaining the lead from Microsoft, Q2 profits reach $10 billion.

[loneAzdgari]

43% Market Share in the Flash Market? They're at number 1 in less than 3 months, with two players without screens! Amazing!

[quagmire]

Wonder how the shuffle affected the overall market share of the iPod. It was 65% before shuffle right?

[Freg3000]

This is surprising...in June Apple will only announce CPU sales in two categories, desktops and portables. No more iMac/eMac/Mac mini, PowerMac, Powerbook, iBook breakdown. Hmmmm...

[narco]

Now all we need to top it off is another journalist to predict Apple's demise if they don't share OS X with PC manufacturers, or open the iTunes store to be compatible with other players. I'll keep my eye out on macbytes.com.

Fishes,
narco.

[auxplage]

I listened to the report, and Apple said they are going to stop reporting Mac sales by family and instead by either "desktop" or "portable".

[dizastor]

any news on how many minis shipped?

[Peyote]

I listened to the report, and Apple said they are going to stop reporting Mac sales by family and instead by either "desktop" or "portable".


Lame...

Prolly brought on by embarrassing PM sales.

[Sophipod]

How many shuffles were sold?

[SiliconAddict]

Excellent. Looks like PowerBook sales fell. Didn’t tank as I hoped but it looks like the band-aid release a couple months ago was enough to keep it from being a complete gusher. Hopefully this is putting more pressure on Apple to put out a REAL PowerBook update. Then again I keep hearing P. T. Barnum's famous quote ringing in my ears since that update. Is my post harsh? Yes but so it Apple's PowerBook offerings so I call it even.

[hexcalibur]

whoohoo my stocks goin up tonight!!!

Or not. Mac sales up, margins up, profit up, ipod sales frickin' insanely up, and...stock drops over 2 bucks a share.

This is why I keep my money in a shoebox under the bed.

[CalfCanuck]

Great news for the Mac platform!

Even though many here are tired of "iPod news", it's now 38% of revenue and is strengthening the company. Let's wait a few years to see how many switchers come on board.

And I'm loving the Mac mini sales - higher units shipments help subsidize the cost of ongoing development of OS X - we all benefit.

[Freg3000]

Power Book G5 is still the "Mother of all Thermal Challenges."

Sorry guys. :(

[quagmire]

Excellent. Looks like PowerBook sales fell. Didn’t tank as I hoped but it looks like the band-aid release a couple months ago was enough to keep it from being a complete gusher. Hopefully this is putting more pressure on Apple to put out a REAL PowerBook update. Then again I keep hearing P. T. Barnum's famous quote ringing in my ears since that update. Is my post harsh? Yes but so it Apple's PowerBook offerings so I call it even.

Actually, Powerbooks sales went up. iBooks fell a bit. Here is Q1.

Product Units k Rev $m
iMac 456 620
iBook 271 297
PM 167 381
PB 152 307
iPod 4580 1211
Other 674
----------------------------
3490

[BornAgainMac]

Will Apple come out with a "fake" Powermac update or do something really good this year for the update. It's been 2 years now. The update last year wasn't so special.

[runninmac]

Wow this is interesting i couldnt tell listening but i think he changed his mind saying that it is not the mother of all thermal challenges but i could be wrong. Either way this is interesting to listen to.

ok i diffenitly herd that wrong.

[SiliconAddict]

Lame...

Prolly brought on by embarrassing PM sales.

Probably brought on by the fact that they can cover ANY embarrassing results with a blanket statement. PowerMac sales can be covered as can PowerBook sales. This can be attributed to Apple being almost incapable of updating multiple products at the same time leaving some of them to rot on the vine. By doing this they can get away from the market bitching about bad e-Mac, PowerMac, iBook, PowerBook sales. So they update PowerMacs and iMacs take a hit for being out there X time without an update and it makes it look like the status quo or better is being maintained. Even though a product in its line is getting thrashed. Its marketing spin is all it is. Similar to Jobs’s RDF but at a lower level.

[rockthecasbah]

Jan 2007, Apple finally wises up, and releases OSX for PCs, thereby gaining the lead from Microsoft, Q2 profits reach $10 billion.

Wises up? That to me is a terrible move. Don't get me wrong, broadening Apple's reach is great and all, but the majority of their revenue is from moving the software WITH the computer. Remove the machines, and you aren't looking at such a big profit...

[macridah]

Good numbers, I'm happy. I wonder why the stock went down after hours.

Now tiger is up, mac sales will increase next quarter ... that's a safe bet.

Good job, again ... hopefully it gets even better!!!!

[SiliconAddict]

Actually, Powerbooks sales went up. iBooks fell a bit. Here is Q1.

Product Units k Rev $m
iMac 456 620
iBook 271 297
PM 167 381
PB 152 307
iPod 4580 1211
Other 674
----------------------------
3490




http://biz.yahoo.com/prnews/050112/sfw092_1.html

Read the wrong results...4th quarter of last year. So its true. :( There's a idiot born every minute.
I'm happy the other numbers are strong but PowerBooks I'm sorry...stupid. Just stupid. Apple should throw in a LCD glass wipe. Watch sales go up 30%. OMG OMG it’s a glass cleaner. :rolleyes: *sighs*

[MacG]

Good numbers, I'm happy. I wonder why the stock went down after hours.

Now tiger is up, mac sales will increase next quarter ... that's a safe bet.

Good job, again ... hopefully it gets even better!!!!

Guiding down from this quarter would be my guess.

[artifex]

Are they trying to hide how successful the mac mini is, or how bad of a flop it is?

I want it to succeed. I want them to come out with an updated one next quarter. I want a matching box underneath, a la Sun, that has real drives in it. Maybe a box to act as a quality a/v breakout. But the friends of mine that aren't geeks are still surprised when I tell then about the cheap mini, and don't sound excited. So how do people think it's really doing?

[Doctor Q]

- Education Channel.What about it? What was said?

[quagmire]

http://biz.yahoo.com/prnews/050112/sfw092_1.html

Read the wrong results...4th quarter of last year. So its true. :( There's a idiot born every minute.
I'm happy the other numbers are strong but PowerBooks I'm sorry...stupid. Just stupid. Apple should throw in a LCD glass wipe. Watch sales go up 30%. OMG OMG it’s a glass cleaner. :rolleyes: *sighs*

Sheesh calling people idiots when they make a mistake is just bad. Well I won't trust that person who gave me that info from another forum.

[SiliconAddict]

Are they trying to hide how successful the mac mini is, or how bad of a flop it is?



Its not a flop. I know at least 10 people in the last month who have gotten their first Mac. Granted that is hardly concrete evidence but the fact remains I’ve never know that many people to pick up a Mac in such a short timeframe.

Honestly I expect strong Mini sales through the year but frankly I expect the X-mas season to be a MAJOR blowout for Apple as long as they get the word out.

[SiliconAddict]

Sheesh calling people idiots when they make a mistake is just bad. Well I won't trust that person who gave me that info from another forum.

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

[maclamb]

Wow this is interesting i couldnt tell listening but i think he changed his mind saying that it is not the mother of all thermal challenges but i could be wrong. Either way this is interesting to listen to.


"A: Still think it's the "mother of all" technical challenges. "

[Macmaniac]

Dang I was hoping to go off to college with a G5 PB, I guess not:( Its a little annoying that Apple is not releasing numbers for the mini or the shuffle, I bet Steve will announce those at WWDC:)

Look at this, 300 million songs on March 2nd, and now 350 million on April 13, thats 42 days, so thats 1.2 million songs a day.

[quagmire]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

Oh ok. Sorry for the confusion. I thought by you saying, " Read wrong results," meant that I made the mistake. There was no "I" in the sentence so I got confused.

[Object-X]

How many Mini's does that make?

[arn]

"A: Still think it's the "mother of all" technical challenges. "

My bad... I'm pretty sure he said "thermal"

arn

[Nastard]

With the after-hours drop and the upcoming release of Tiger, plus the speculated announcement of new PowerMacs, it seems that now would be a good time to buy stock.

[JordanNZ]

The mac mini is no flop.. Put it this way.. 3 of my friends just got one.. Their first mac.

There was a wait of 6 weeks in this country!

[Chip NoVaMac]

Jan 2005, Apple introduces a low-cost computer, after users repeatedly ask and ask, Q2 profits rises to a record-high.

Jan 2006, Apple introduces a 2-button mouse for all their computers, after users repeatedly ask and ask, Q2 profits skyrocket 1,000%.

Jan 2007, Apple finally wises up, and releases OSX for PCs, thereby gaining the lead from Microsoft, Q2 profits reach $10 billion.

LOL... very nice.

Though the 2007 prediction i think is more far off than that. The joy of OSX is that Apple has been able to control the platform that it ran on. The only way for OSX for the PC to succeed successfully would be to have a closed system, with severe limitations on the hardware that could be added internally.

[powerbook911]

Excellent. Looks like PowerBook sales fell. Didn’t tank as I hoped but it looks like the band-aid release a couple months ago was enough to keep it from being a complete gusher. Hopefully this is putting more pressure on Apple to put out a REAL PowerBook update. Then again I keep hearing P. T. Barnum's famous quote ringing in my ears since that update. Is my post harsh? Yes but so it Apple's PowerBook offerings so I call it even.

Powerbook sales were up. They were less than 200,000 in Q1. You should pay better attention. The current Powerbooks are real. :)

[xsnightclub]

Was there any mention of the iTunes/Pepsi promo, Wonder how it is doing this time round.

All in All an outstanding report, very impressive that Apple beat Wall St estimates by about $.10 /share.

Still waiting for "the mother of all thermal challenges" to be addressed for my next Powerbook.

[minimax]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.

[Chip NoVaMac]

Lame...

Prolly brought on by embarrassing PM sales.

Could be that, or it could signal new competitive strategy to keep people guessing (read competitors) guessing. Apple is on a roll, and needs to maintain that momentum.

It is my take that at this time only us Apple "geeks" care about how many of each are sold. the investors at this point are only interested in total units sold and at what margins.

[azdude]

- Q: Last conference call, mentioned that putting a G5 in a PowerBook would be a significant technical challenge. A: Still think it's the "mother of all" thermal challenges.

OMG. They keep using that phrase.

Guess what's coming on MOTHER'S DAY 2005?!?!?!?!!!!!!!1111!!!!1!111!1!

; ;) :cool:

Uhh... back to work.

[Chip NoVaMac]

Excellent. Looks like PowerBook sales fell. Didn’t tank as I hoped but it looks like the band-aid release a couple months ago was enough to keep it from being a complete gusher. Hopefully this is putting more pressure on Apple to put out a REAL PowerBook update. Then again I keep hearing P. T. Barnum's famous quote ringing in my ears since that update. Is my post harsh? Yes but so it Apple's PowerBook offerings so I call it even.

I am sure that Apple is wanting to release the mother of all PB's as soon as they can. Only since so many are focused on the "numbers game" of processor speed. Never mind that G4's and dual G4's have much life left in them in reality.

[Chip NoVaMac]

Actually, Powerbooks sales went up. iBooks fell a bit. Here is Q1.

Product Units k Rev $m
iMac 456 620
iBook 271 297
PM 167 381
PB 152 307
iPod 4580 1211
Other 674
----------------------------
3490

Thanks for the data. It maybe that those that were tempted by the iBook decided instead to go with the Mac mini instead.

[Chip NoVaMac]

Probably brought on by the fact that they can cover ANY embarrassing results with a blanket statement. PowerMac sales can be covered as can PowerBook sales. This can be attributed to Apple being almost incapable of updating multiple products at the same time leaving some of them to rot on the vine. By doing this they can get away from the market bitching about bad e-Mac, PowerMac, iBook, PowerBook sales. So they update PowerMacs and iMacs take a hit for being out there X time without an update and it makes it look like the status quo or better is being maintained. Even though a product in its line is getting thrashed. Its marketing spin is all it is. Similar to Jobs’s RDF but at a lower level.

Or it can be looked upon a good marketing. Delivering everything at one time may provide a short term bounce. But give consumers too many choices, and they waiver.

Imagine if they had updated the eMac at the time they introduced the Mac mini. Though this does fall apart when a new OS is to be released. And that may play into the longer release dates between OS's.

[mhouse]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.

Don't mean to be rude but you're totally off base. To determine if the numbers are any good you have to look at the year ago quarter, not the previous quarter.

Apple's Mac sales are up 43% from the year ago quarter. Those are very, very strong numbers indeed.

[davey-nb]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.

How do you figure that if Desktop sales were 608,000 (up 55%)?

[Chip NoVaMac]

Its not a flop. I know at least 10 people in the last month who have gotten their first Mac. Granted that is hardly concrete evidence but the fact remains I’ve never know that many people to pick up a Mac in such a short timeframe.

Honestly I expect strong Mini sales through the year but frankly I expect the X-mas season to be a MAJOR blowout for Apple as long as they get the word out.

I agree. We tried at our camera store selling Mac's in the recent past. Did not go well with all the options for purchase out there. Though the Mac mini may breath some life into our ability to meet consumer need.

The problem for the independent retail channel is to overcome the objections of the salespeople. May mean some sort of "sales incentive" to put Mac's into the diehard PC faithful.

[Porchland]

This is surprising...in June Apple will only announce CPU sales in two categories, desktops and portables. No more iMac/eMac/Mac mini, PowerMac, Powerbook, iBook breakdown. Hmmmm...

I think that's all about margin gotcha. Apple doesn't doesn't want to show its hand on products like Mac mini that are driving market share but aren't necessarily cash cows. I agree with the analyst's report earlier this week that we're fixin' to hear a whole lot about Tiger and applications.

I read somewhere that a 1 percent move in Apple's PC market share works out to about $2B in gross sales of PC and ancillary products. If Apple grows to 10-15% of the PC market in the next few years, we may see a radical rethinking of the platform by all sorts of software manufacturers, including Apple.

And the bigger Apple gets, the higher its stock price will climb and the greater its leverage is going to be for picking off software companies. Apple's model has been to buy smaller software companies, but we may see the days very soon when Apple could decide to buy a gaming company, Macromedia ($3B), Adobe ($16B), Intuit ($8B) or other companies that it wouldn't have had the market cap to swallow before.

It is a really exciting time to be following Apple.

[xsnightclub]

Found this interesting bit at Bloomberg.com

The iMac remains the company's most popular model. Shipments more than doubled to 467,000 units as revenue from the iMac jumped 92 percent to $483 million.

from: http://quote.bloomberg.com/apps/news?pid=10000006&sid=ajYCGMJQRsHw&refer=home

[minimax]

Don't mean to be rude but you're totally off base. To determine if the numbers are any good you have to look at the year ago quarter, not the previous quarter.

Apple's Mac sales are up 43% from the year ago quarter. Those are very, very strong numbers indeed.

I'm not off base. If you look at the previous numbers for the consumer desktop line you see sales stayed flat from Q104 (227k) to Q404 (229k). Q105 (456k) saw the introduction of the imac and sales jumped almost 100% compared to both the previous quarter AND the year ago quarter. After that, sales stayed almost flat when you regard Q205. Seasonal changes have a relative minor effect when you compare Q104 (227k) that includes christmas sales etc with Q204 (217k). In other words, the mac mini is eating away big time from the imac, THAT is why there is a combined report of both.

[nagromme]

the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny?

No. Because for some people, the OS is more important to productivity than MHz are. :D We all wish a G5 PowerBook were possible now, but it's not. If someone needs a laptop now, choosing Windows over OS X is hardly without its price.

I'd recommend people wait for a G5 if they can--but not everyone can, so what's out NOW is the choice most people have.

For my money, a PowerBook is currently the best laptop buy on the planet.

But if you find Windows an acceptable alternative to OS X, then you have some other fine choices out there.

[egsaxy]

Jan 2007, Apple finally wises up, and releases OSX for PCs, thereby gaining the lead from Microsoft, Q2 profits reach $10 billion.

Only if Apple is stupid or charges an arm and a leg. And require high system requirements. If Apple targeted Pro (and I say that factiously) Windows users with 3.x gig machines, and decent graphics etc. and then charged the same license fee microsoft does (or slightly lower) people would switch to try it out but would then buy a mac (its like iPod) that people will try it first and then get a mac (if the OS on x86 is any good) or to give intel a run for their money only support AMD chips. I don't think thats the wisest decision to make. This is the trend I see, people continue to get fed up with microsoft, they switch to linux (no hardware change) and then look heavily into the Mac platform when its time to get new hardware.

[DTphonehome]

I think that's all about margin gotcha. Apple doesn't doesn't want to show its hand on products like Mac mini that are driving market share but aren't necessarily cash cows. I agree with the analyst's report earlier this week that we're fixin' to hear a whole lot about Tiger and applications.

I read somewhere that a 1 percent move in Apple's PC market share works out to about $2B in gross sales of PC and ancillary products. If Apple grows to 10-15% of the PC market in the next few years, we may see a radical rethinking of the platform by all sorts of software manufacturers, including Apple.

And the bigger Apple gets, the higher its stock price will climb and the greater its leverage is going to be for picking off software companies. Apple's model has been to buy smaller software companies, but we may see the days very soon when Apple could decide to buy a gaming company, Macromedia ($3B), Adobe ($16B), Intuit ($8B) or other companies that it wouldn't have had the market cap to swallow before.

It is a really exciting time to be following Apple.

Well said. I totally agree. I doubt, however, that Apple's market share will get to 10-15% anytime soon. Think about how big the market is, and who are major buyers. Corporations and governments (who buys PCs by the thousands) have a tremendous investment in Windows, and that will take more than a few years to change. Also, while Apple continues to do well in the US, Western Europe, and Japan, I don't think (correct me if I'm wrong), that they have too much traction in the rest of the world. That will change with time, but I think a 2-3% upward movement in market share is more reasonable for the near future. And, like you said, that increase will be tremendous. Apple will become a major player again.

--DT

[minimax]

Found this interesting bit at Bloomberg.com

The iMac remains the company's most popular model. Shipments more than doubled to 467,000 units as revenue from the iMac jumped 92 percent to $483 million.

from: http://quote.bloomberg.com/apps/news?pid=10000006&sid=ajYCGMJQRsHw&refer=home

What idiot is analysing the apple data at Bloomberg? Comparing imac g5 with g4 when the 100% leap already occured last quarter and even worse, stayed flat this quarter with INCLUSION of mac mini sales? The data from apple shows clearly sales of the imac g5 have collapsed when compared to the previous quarter.

[garotemonkey]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

*shrug* I used to make a career out of Windows system maintenance, and recently had to set up a new widescreen Sony VIAO laptop for someone, and I was happy to return to my 17" PB afterwards. Apple still wins for durability because it's one of the few laptops with a nice thick metal enclosure. The slot-loading drive, lack of protruding buttons or hinges, and lack of silly hinge-doors over the sockets is helpful here too, and moving the ports to the sides instead of the back was also very smart (you can open the laptop over a non-uniform surface and not worry about snapping off your USB port when the screen tilts the computer backwards). All that jazz plus OS X is quite handy.

But there are several aspects where the PowerBooks just plain lose, compared to similar models in the PC world, and they are things I really wish Apple would keep up with. One aspect is screen resolution, and another aspect is speed.

Yes, speed. I keep a 2.4Ghz XP box at home for audio processing. I'd love to move that onto the PowerBook, but it would drive me CRAZY. You can't accelerate audio processing with a fast GPU, either. It's purely a matter CPU brawn and disk piping.

Something must be done.

[Fender2112]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)
- Hard Drive based marketshare 90%
- Flash based 43% (0% to 43% in the month of availability)
- 70% overall market share for Feb. Up from December Quarter

In these times of competing formats, it's interesting that it's still refered to as MP3 market.

[xsnightclub]

What idiot is analysing the apple data at Bloomberg? Comparing imac g5 with g4 when the 100% leap already occured last quarter and even worse, stayed flat this quarter with INCLUSION of mac mini sales? The data from apple shows clearly sales of the imac g5 have collapsed when compared to the previous quarter.

Maybe professional analysts with much more information from mulitple reliable sources, and the hard copy financial data in front of them.

News from a quasi-reliable souce ThinkSecret "Power Mac G5 sales have been down for the last quarters, partly due to strong iMac G5 sales and a stale platform"
http://www.thinksecret.com/news/0504g5.html

[jettredmont]

What idiot is analysing the apple data at Bloomberg? Comparing imac g5 with g4 when the 100% leap already occured last quarter and even worse, stayed flat this quarter with INCLUSION of mac mini sales? The data from apple shows clearly sales of the imac g5 have collapsed when compared to the previous quarter.

True, but you're also missing the normal drop-off from quarter-of-introduction sales. Typically, a machine will sell really well in its first quarter and then drop off fairly significantly to a more modest "steady state". This is especially true when the introduction of the new model was heavily anticipated, as it was with the iMac G5.

It's a bit dissapointing that Mac mini results haven't done anything more than counter this natural drop-off, however. I'd hoped to see an additional significant bump in unit sales. Cannibalizing, however, is a bit too strong of a description.

[xsnightclub]

It's a bit dissapointing that Mac mini results haven't done anything more than counter this natural drop-off, however. I'd hoped to see an additional significant bump in unit sales. Cannibalizing, however, is a bit too strong of a description.

Keep in mind the Mac Mini supply ramp up was not up to meet demand for most of this quarter. Also the Mac Mini demand will probably see the biggest demand for the upcoming back-to-school and holiday seasons when demand for new computers is highest.

[dashiel]

http://biz.yahoo.com/prnews/050112/sfw092_1.html
Read the wrong results...4th quarter of last year. So its true. :( There's a idiot born every minute.
I'm happy the other numbers are strong but PowerBooks I'm sorry...stupid. Just stupid. Apple should throw in a LCD glass wipe. Watch sales go up 30%. OMG OMG it’s a glass cleaner. :rolleyes: *sighs*

you do realize that there are people out there who don't scour the message boards on an hourly basis for apple news right? and you also realize that some people needed a laptop computer last quarter and the current model of powerbook was all that was available. despite your implication that the current "band-aid model" isn't any good, it's plenty good for those people who wanted or needed a powerbook in the last 3 months. to call those people stupid or an idiot is just colossally naive, disrespectful and wrong.

[me_94501]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.
I respectfully disagree, minimax. You have to keep in mind a few things:
1) Q1 was the holiday quarter, which is typically the busiest. Q2 is historically slow for Apple (and is generally slower for the economy as a whole); there are no Christmas sales, schools are not buying machines until later on, and the back-to-school rush is still a ways off. If there wasn't an impact, you likely would have seen sales backslide some (e.g. down to about 900,000).
2) While the sequential increase isn't spectacular, the year-over-year is. This is a better indicator, because it factors out seasonal fluctuations in product demand (which I outlined in #1) and therefore gives a clearer indication of trends in sales.

[mj_1903]

What idiot is analysing the apple data at Bloomberg? Comparing imac g5 with g4 when the 100% leap already occured last quarter and even worse, stayed flat this quarter with INCLUSION of mac mini sales? The data from apple shows clearly sales of the imac g5 have collapsed when compared to the previous quarter.

No. iMac sales may have fallen a little due to standard seasonal adjustments but I doubt the Mac mini has completely cannibalised the iMac line as you are assuming.

Remember, last quarter was both the holiday quarter and the introduction quarter for the iMac G5. Also, that iMac figure includes the eMac as well which most likely has been destroyed by the Mac mini.

[oskar]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

Many people (300,000+) seem to be doing their homework and a lot of other things on their new PowerBook G4's while you've been bashing Apple for months now and whining about a PowerBook G5 or whatever... If Apple is taking this long it's because the wait will be worth it. Apple's sales and revenues simply make what you've been complaining about all this time incongruent.

At least you finally changed your signature...

[mj_1903]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

Maybe computers are finally good enough for all users. Ever thought that the numbers may not matter anymore? They certainly don't for me. I care about what gets me from A to B in the least stressful path and that for me is a Mac. I might be able to do large things 10% faster on a PC but I have to deal with everything else it throws me.

[me_94501]

No. iMac sales may have fallen a little due to standard seasonal adjustments but I doubt the Mac mini has completely cannibalised the iMac line as you are assuming.

Remember, last quarter was both the holiday quarter and the introduction quarter for the iMac G5. Also, that iMac figure includes the eMac as well which most likely has been destroyed by the Mac mini.
Exactly.

Minimax, please understand what we are saying. This isn't an indicator that the Mac mini is a flop, pure and simple.

[mj_1903]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.

I would let Apple make that call. If the Mac mini is being detrimental they will remove it. My assumption is the eMac was absolutely destroyed last quarter and that the iMac has fallen both because of the holiday quarter and because it is no longer new.

[dicklacara]

What about it? What was said?

Somewhere in the call Apple said that about 40% of purchasers (of some segment) were first-time Mac users.

Apple won't break out the sales by model, but they (accidentally or purposefully) give hints and you really have to pay attention.

Apple is quite happy with the acceptance of the mini.

[jouster]

...Its a little annoying that Apple is not releasing numbers for the mini or the shuffle, I bet Steve will announce those at WWDC :)

No chance of that whatsoever.

[hexcalibur]

I'm going to suggest that if the company can sell over a million computers and make several hundred million dollars profit in a quarter, they can "flop" like this until the end of time.

Any bets as to when the next "Apple is doomed" analysis gets reported in the media (yes, I'm looking at you Rob Enderle)?

[Makosuke]

Hmm... no Xserve numbers anywhere. Wonder how sales have been?

(Curious in part because I just bought one--sitting right next to me--and it seems like a nice piece of hardware so far).

And I agree 100% with mj_1903; no the current PBs aren't particularly exciting machines. But they are more than enough for most people to get what they need done. I know someone who's planning on buying one in the next month or two, and she could care less whether it's been a while since they've been updated or whether there are somewhat faster PC laptops available--it does what she needs it to.

And she's not a generic user, either--she's both a soon-to-be-switcher and someone looking to do statistical analysis. Good enough is good enough.

[dicklacara]

Hmm... no Xserve numbers anywhere. Wonder how sales have been?

(Curious in part because I just bought one--sitting right next to me--and it seems like a nice piece of hardware so far)..

I think that if you listen carefully to the call (or read the results posted on many financial and Mac sites) that you can extrapolate the number of XServes...

Something like # of Computers - # of Desktops - Number of Laptops.

[dicklacara]

One of the big success stories was the iPod Shuffle-- from 0% to 43% and leader of that Market Segment in a single quarter...


... but wait...

... the shuffle was announced in January and supply-constrained until February (remember the 3-5 week delivery?)...

... and Apple does not yet have the numbers for March!...

... so, that's 0%-43% is a single month (as reported by an independent company).

[mhouse]

I respectfully disagree, minimax. You have to keep in mind a few things:
1) Q1 was the holiday quarter, which is typically the busiest. Q2 is historically slow for Apple (and is generally slower for the economy as a whole); there are no Christmas sales, schools are not buying machines until later on, and the back-to-school rush is still a ways off. If there wasn't an impact, you likely would have seen sales backslide some (e.g. down to about 900,000).
2) While the sequential increase isn't spectacular, the year-over-year is. This is a better indicator, because it factors out seasonal fluctuations in product demand (which I outlined in #1) and therefore gives a clearer indication of trends in sales.

I agree.

Another point I would like to make with a lot of folks on this board is in regard to the supposed cannabilization of iMac sales. Why would the Mac Mini cannabalize iMac sales any more than the eMac did? They are roughly the same price when you factor in display, keyboard, and mouse.

Personally I expect Apple to make the eMac an education-only option as they did for the G3 iMac and introduce a slick-but-inexpensive small display for the Mac Mini to complete the low-end consumer option.

[neutrino23]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.

This is based on what? Because the form factor hasn't changed in a while? PowerBooks are faster, have more memory capacity, FW400 and FW800, better video out, better graphics chips, better speakers, faster CPUs than ever before. Could they be improved? Sure. Are you disappointed they don't have a G5? I'm not. The G5 will come but before that I'd rather have dual G4s. That would provide better throughput and more flexible power management. I currently have a 1.25GHz Al PB from 2003. This fall I'll upgrade to whatever the current PB will be at that time. These are great times to be an Apple PB owner.

[auxplage]

One of the big success stories was the iPod Shuffle-- from 0% to 43% and leader of that Market Segment in a single quarter...


... but wait...

... the shuffle was announced in January and supply-constrained until February (remember the 3-5 week delivery?)...

... and Apple does not yet have the numbers for March!...

... so, that's 0%-43% is a single month (as reported by an independent company).

So now 43% or a larger % of all flashbased MP3 players sold are Shuffles, correct?

[neutrino23]

I think that if you listen carefully to the call (or read the results posted on many financial and Mac sites) that you can extrapolate the number of XServes...

Something like # of Computers - # of Desktops - Number of Laptops.

608,000 iMac, eMac, Mac mini and PowerMacs
462,000 portables
________
1,070,000 total Mac units sold.

By this reckoning Xserve sales are zero. They are probably folded into the 608,000 number.

[bborofka]

The Mac mini has helped bring Mac sales back to where they were in 2000 (http://www.apple.com/pr/library/2000/apr/19q2results.html). There's no doubt it's an initial success, but does it have the momentum to keep going? There was all this talk about an iPod halo effect and Macs exceeding the industry standard for growth. Certainly that happened to some extent to this quarter, but it needs to keep happening quarter after quarter. Imagine if they actually advertised their computers now.

Some say profits and revenues are all that matter, but as a Mac enthusiast I am always most curious about unit sales. If new people don't buy Macs then OS X is never going to truly shine. It is important for Apple and Mac users that new people continue to come to the Mac platform. Apple's been in a hole the past 5 years and they're finally getting out of it. Now they need to continue where they left off and keep growing the Mac.

[bobringer]

This is surprising...in June Apple will only announce CPU sales in two categories, desktops and portables. No more iMac/eMac/Mac mini, PowerMac, Powerbook, iBook breakdown. Hmmmm...

Man, I'd love to see the Mac mini numbers for this quarter but I also think it's pretty clear that more than at any other point, Apple needs to keep these numbers really tight for competetive reasons.

This is an absolute blowout quarter. We went from what was probably their best quarter ever in Q1 (hisorically their best quarter) to Q2 (hist. their worst) and while we didn't see $0.70 again, we saw a quarter that I can't imagine anyone expected. The Mac unit numbers were great and imply the Mac mini numbers were through the roof. And 5 million iPod sales? Almost a million more than the Christmas quarter? The suffle is huge and drawing people to the Apple stores in droves... enhancing the halo effect.

The strange thing this quarter is the margins. Where did they come from? Could component costs have come down that much? We have to assume software sales this quarter weren't that strong with people waiting on Tiger, so there must have been big gains in hardware margins. With $150 price drops in the iPod photos, the introduction of the Mini and Shuffle, margins should have been hit hard. Where did we get that extra 2% from?

$7 Billion in cash and the stength of the current product line is going to allow a TON of money to get poured in to R&D and STRATEGIC acquisiitons in the short/mid term. They've done a great job so far in both of these areas, I can only imagine where we will be in $3 years.

Time to get on those LEAPS.

[deral]

I'm doing a Media Strategy assignment for Apple's hardware. Anyone know where I can get market shares of Apple Hardware in the Computer Hardware market (not guesses, but like official stuff I can quote).

And to keep on the subject on the thread, wow on the 0 to 43% market share on the shuffles.

[mvc]

... Apple's been in a hole the past 5 years and they're finally getting out of it. Now they need to continue where they left off and keep growing the Mac.

Seems to me Apple's been in a hole for more like 10 years, certainly since the mac clone debacle, perhaps since not long after Steve left the first time, with only the bright spot of the original iMac launch breaking the pattern - only now are they actually recovering, and its not because of their great desktop or laptop computers, or even their great new OS, no its consumer gadgets and consumer cut price boxes that have turned the tide.

Welcome to the desert of the real, Apple. :(

[bobringer]

good numbers???

despite the introduction of mac mini sales of the consumer desktop line climbed a meager 11000 units. Also total macintosh sales stayed almost flat. In other words, it has NO effect whatsoever on windows users, potential switchers / adders.

Dude, comparing Q1 and Q2 is... well... like comparing Apples and Footballs.

Q1 = Best Historical Quarter
Q2 = Worst Historical Quarter

This year, Q2 had > desktop sales than Q1. Q1 was a blowout quarter.

In my book... that = Q2 being a blowout quarter.

[eji]

No I made the mistake. I'm saying that people who upgraded or purchase their first PowerBook didn't do their homework....basically I'm supremely jaded about Apple's lack of forward momentum and the fact that the rest of the industry is kicking the living snot out of their laptop line all the while people are eating it up based on....*shrugs* What? It’s nice and shiny? Whatever. That is where the phrase comes into play.
Wow. Couldn't have said it better. One year between PM updates? The outdated 5200 GPU still in the iMac? A Radeon 9200 in the mini that won't run Tiger's CoreImage? The fate of the languishing eMac still unknown? iBook form factor unchanged since 2001? Across the line, every line, it's downright pathetic. They really need to get their hardware up to snuff before Windows users -- even basic consumer users who will never maximize the full potential of their hardware -- consider migrating and the "switch numbers" become apparent. Apple desperately needs to be at the forefront of every field to counter the myths that it's a) going to go bust or b) trendy, overpriced glitz.

[mj_1903]

Wow. Couldn't have said it better. One year between PM updates? The outdated 5200 GPU still in the iMac? A Radeon 9200 in the mini that won't run Tiger's CoreImage? The fate of the languishing eMac still unknown? iBook form factor unchanged since 2001? Across the line, every line, it's downright pathetic. They really need to get their hardware up to snuff before Windows users -- even basic consumer users who will never maximize the full potential of their hardware -- consider migrating and the "switch numbers" become apparent. Apple desperately needs to be at the forefront of every field to counter the myths that it's a) going to go bust or b) trendy, overpriced glitz.

Or not. Apple are a very healthy company right now. Their pattern of updates is proven to generate profits and profits are all that matters. Unit sales will not keep Apple alive into the future, profits on the other hand will.

[Trimix]

The mac mini is no flop.. Put it this way.. 3 of my friends just got one.. Their first mac.

There was a wait of 6 weeks in this country!

i think it is a flop
had they sold a million of them you can bet, they would trumpet it from the rooftops - no, this is a flop - for competitive reasons ? come on they are touting their sales on the music store, they always give out numbers, when they are ahead and they are mum when it does not work out too well.
and what does a waiting list mean ? not necessarily strong demand, but maybe just very little allocated production resources.

[Zaty]

Those are really great figures. However, one interesting question, if the mini is a success or not, remains unclear. Let's have a closer look at the numbers we know:

In Q1, Apple sold 456K iMacs and eMacs. Given that this was the first quarter that new iMacs were sold in quantities and Q1 is traditionally the best quarter, this is a great number. I guess it's safe to assume that about 75% of those 456K units were iMacs. So let's say they sold approximately 300K iMacs in that quarter.

Now, the combined number of iMacs, eMac and Mac minis for Q2 is 467K or a plus of 11K units. Given that Q2 is traditionally the worst quarter, this is, at first sight, an amazing number. But, Mac minis probably have marginalised eMac sales. I would think they sold less than 100K eMacs last quarter. Which leaves us with around 380K-400K units of iMacs and Mac minis. It's also safe to assume that iMac sales dropped a bit compared to Q1. If we assume they sold about 225K units of iMacs, we'll get a total of 160K-180K Mac minis sold. No matter how close my assumptions are, I dare say they sold more iMacs than minis. This is good for Apple's margin but can we call the mini a success? It's probably to early to say as demand for minis was much higher than supply. So I guess we have to wait for this quarter's figures to make an assessment. Since Apple won't give us numbers for the different product families anymore, the mini can only be a success if the total number of desktops rises significantly. If it doesn't, it can only mean two things either of which isn't good for Apple:
a) the minis don't sell as well as we and Apple expect them to
b) the mini sells well but for the price of declining sales of other models.

I guess we'll see.

[maxterpiece]

anyone have any ideas as to why the stock is dropping? Seems like it should be doing the opposite.

[Savage Henry]

Since Apple won't give us numbers for the different product families anymore, the mini can only be a success if the total number of desktops rises significantly. If it doesn't, it can only mean two things either of which isn't good for Apple:
a) the minis doesn't sell as well as we and Apple expect them to
b) the mini sells well but for the price of declining sales of other models.

I guess we'll see.

I think the re-grouping of product lines is an excellent controlling decision on the part of Apple. With their increased sensitivity to the product releases and developments, hiding the lame lines amongst the market luvvies is a perfect way to control the way the info is interpreted. It looks better for the company if they say that 'desktops sales are robust' as opposed to 'iMacs are selling well, whilst minis were disappointing'.Sure, I'll miss the fun and speculation of line-drops and upgrades, but as long as they keep churning out quarters like this I'm a happy camper.

As for the mini, I don;t think it will be end up like the cube. I can't think it takes much to knock one of these off the production line, so I'll think it will be that market stop-gap for a good few years yet.

[minimax]

Those are really great figures. However, one interesting question, if the mini is a success or not, remains unclear. Let's have a closer look at the numbers we know:

In Q1, Apple sold 456K iMacs and eMacs. Given that this was the first quarter that new iMacs were sold in quantities and Q1 is traditionally the best quarter, this is a great number. I guess it's safe to assume that about 75% of those 456K units were iMacs. So let's say they sold approximately 300K iMacs in that quarter.

Now, the combined number of iMacs, eMac and Mac minis for Q2 is 467K or a plus of 11K units. Given that Q2 is traditionally the worst quarter, this is, at first sight, an amazing number. But, Mac minis probably have marginalised eMac sales. I would think they sold less than 100K eMacs last quarter. Which leaves us with around 380K-400K units of iMacs and Mac minis. It's also safe to assume that iMac sales dropped a bit compared to Q1. If we assume they sold about 225K units of iMacs, we'll get a total of 160K-180K Mac minis sold. No matter how close my assumptions are, I dare say they sold more iMacs than minis. This is good for Apple's margin but can we call the mini a success? It's probably to early to say as demand for minis was much higher than supply. So I guess we have to wait for this quarter's figures to make an assessment. Since Apple won't give us numbers for the different product families anymore, the mini can only be a success if the total number of desktops rises significantly. If it doesn't, it can only mean two things either of which isn't good for Apple:
a) the minis doesn't sell as well as we and Apple expect them to
b) the mini sells well but for the price of declining sales of other models.

I guess we'll see.

Yes, this was the point I was making as well. When we look at Q1 2004 and Q2 2004 de difference is not THAT great with regard of seasonal fluctuations. Now, for Ipod, the influence is probably much larger as it is the perfect present, but we're talking computers here and you buy one when you need one, not to give as a present.
The imac had a major lift in sales from the new introduction in Q1, but the same is the case this quarter for the mac mini. It sounds strange if apple couldnt keep up demand for the mac mini, while total sales didnt move. You'd expect them to react fast, since everybody is taking them under close scrutiny to finally see proove of that almost mythical HALO effect. The combined sales number indeed has to be an effect of either a, b, or a combination of both. I suspect it to be the latter. When we look at the total worth of consumer desktop sales the went down from $ 620k to $ 483k so now matter how you turn it, the drop in imacs this Q2 was far larger then Q2 last year.
I do agree it has probably eaten away more from the emac then the imac, but if I look at myself, the choice of the mac mini has lost apple the sale of an imac, although i wouldnt have had the money to buy one already last quarter.

[Savage Henry]

anyone have any ideas as to why the stock is dropping? Seems like it should be doing the opposite.A lot is based on opinions surrounding future earnings ... Steve always likes to announce 'great new products in the coming year' to keep everyone interested, but if the market can't see beyond standard line upgrades they can be a bit ambivalent.

Personally I think the stock price is quite high as it is. I don't think there's too much to be concerned about.

[topicolo]

Or not. Mac sales up, margins up, profit up, ipod sales frickin' insanely up, and...stock drops over 2 bucks a share.

This is why I keep my money in a shoebox under the bed.

The expectations were already factored into the share price leading up to the conference call. Apple didn't exceed expectations by some crazy amount, so lots of people sold off to lock in their gains.

[topicolo]

Here are the things that really puzzle me:
1) The 55% increase in desktop sales could very likely be due to the introduction of the mini
2) The intro of the ipod shuffle would lower overall margins
3) The intro of the mini would lower overall margins
4) APPLE'S MARGINS WENT UP

So either the 55% desktop sales increase isn't as much due to the minis as we thought (the shuffles obviously sold well from the marketshare grab), or the margin increase was due to hardware costs dropping (probably because Apple takes an eternity to update anything).

[fatbarstard]

Apple's numbers were very very good.

Why did the stock drop?? Simple answer - buy the rumour, sell the fact. Its been that way in financial markets since forever.

Margins probably rising purely on volume more than anything else - overall volume up so fixed costs per $$ of revenue go down - its a great position to be in.

The thesis from a number of analysts has been that sales of iPod would help pull through sales of computers and other hardware. This would appear to be the case and is probably helping to lower marketing costs per sale.

PowerMac numbers - get over it. PM's are a high end product aimed at a specific user type (video/graphics/data crunching etc etc). Same for Xserves... these guys are not part of the iPod pull through. But the spend per transactions is probably quite high and thus are very high margin customers. Can't lose focus on these guys.

Apple is far more a consumer business than it has ever been... that's where the focus should be. So what if Shuffle sales pull down margins.. there is a trade off between volume and margin in consumer products...

Now where is Spongebob??

[Makosuke]

I think that if you listen carefully to the call (or read the results posted on many financial and Mac sites) that you can extrapolate the number of XServes...

Something like # of Computers - # of Desktops - Number of Laptops.
No, though I haven't listened to the call, at least the numbers listed here all add up; 467K + 141K = 608K and 608K + 462K = 1070K, , so there's no Xserves to be extrapolated from that anyway.

Here's a question I've been trying unsuccessfully to work the math out on: Based on the iPod figures quoted here, you should be able to roughly extrapolate the total size of the portable player market versus past similar figures, and how it has fared apart from the iPod.

These figures are definitely wrong, but here's some very bad math based on the MWSF2004 numbers of 703K iPods sold and 32% market share:

If 703K is 32%, then the total market would've been 2.3M players of which 1.7M weren't iPods; 15 months later there were 5.3M iPods sold for 70% of the market, meaning a total market of 7.6M and 2.3M non-iPod players. If these numbers actually made any sense, that'd imply that non-iPod players are only up 36% despite way more competition, while iPod sales are up about 650%.

Again, that's total garbage, since it's mixing net sales and units moved, as well as US and international figures, but with slightly better numbers you could figure out roughly how severely the iPod is still managing to thrash everything else on the market. It may hold, it may not, but it's sure impressive so far, and the Shuffle ain't hurting.

[rdowns]

True, but you're also missing the normal drop-off from quarter-of-introduction sales. Typically, a machine will sell really well in its first quarter and then drop off fairly significantly to a more modest "steady state". This is especially true when the introduction of the new model was heavily anticipated, as it was with the iMac G5.

It's a bit dissapointing that Mac mini results haven't done anything more than counter this natural drop-off, however. I'd hoped to see an additional significant bump in unit sales. Cannibalizing, however, is a bit too strong of a description.

Your comments are right on but let's not forget, you are comparing sales in the xmas quarter (Q1) with Q2 (the slowest Q of the year). Based on that, growth in the number of Macs shipped is quite impressive.

[rdowns]

Hmm... no Xserve numbers anywhere. Wonder how sales have been?

(Curious in part because I just bought one--sitting right next to me--and it seems like a nice piece of hardware so far).

And I agree 100% with mj_1903; no the current PBs aren't particularly exciting machines. But they are more than enough for most people to get what they need done. I know someone who's planning on buying one in the next month or two, and she could care less whether it's been a while since they've been updated or whether there are somewhat faster PC laptops available--it does what she needs it to.

And she's not a generic user, either--she's both a soon-to-be-switcher and someone looking to do statistical analysis. Good enough is good enough.

xserves are reported in the PM sales numbers.

You can view the numbers here:

http://www.apple.com/pr/library/2005/apr/13results.html

Click on Data Summary at the top for the .pdf

[rdowns]

This is an absolute blowout quarter. We went from what was probably their best quarter ever in Q1 (hisorically their best quarter) to Q2 (hist. their worst) and while we didn't see $0.70 again, we saw a quarter that I can't imagine anyone expected. The Mac unit numbers were great and imply the Mac mini numbers were through the roof. And 5 million iPod sales? Almost a million more than the Christmas quarter? The suffle is huge and drawing people to the Apple stores in droves... enhancing the halo effect.

Yes, a blowout quarter indeed. When you compare to the same quarter a year ago, the numbers are pretty damn good. Even comparing to the xmas quarter, they are pretty damn good. Here are the numbers for Q205 vs. Q105 and Q204.

iMac- 467K shipped, up 2% from Q105 and up 115% from Q204

iBook - 251K shipped, down 7% from Q105 and up 25% from Q204

Powermac - 141K shipped, down 16% from Q105 and down 19% from Q204 (the only bad numbers)

PowerBook - 211K shipped, up 39% from Q105 and up 34% from Q204

iPod - 5,311M shipped, up 16% from Q105 and up 558% from Q204.

iTMS and iPod accessories - $216M in Q105, up 22% from Q105 and up 260% from Q204.

Software - $239M, up 12% from Q105 and up 28% from Q204. These numbers should skyrocket this quarter with Tiger and rumored pro apps.

Revenue - $3.24M, down 7% from Q105 (can you imagine, making almost as much revenue as the xmas quarter while introducing lower margin items like the shuffle and Mac mini?) and up 70% from Q204.

The strange thing this quarter is the margins. Where did they come from? Could component costs have come down that much? We have to assume software sales this quarter weren't that strong with people waiting on Tiger, so there must have been big gains in hardware margins. With $150 price drops in the iPod photos, the introduction of the Mini and Shuffle, margins should have been hit hard. Where did we get that extra 2% from?

Component costs dropping is certainly a factor and software revenue was up too. While Apple lowered prices on iPods, they stripped out accessories (Firewire cable, AC adapters, carry case, docks) to keep margins up. Numbers up for iPod accessories. Brilliant marketing if you ask me. I also suspect that Apple gained from the weak dollar by keeping non-US prices high so as no to get hurt. See all the complaints on this forum about prices overseas.

[rdowns]

Here are the things that really puzzle me:
1) The 55% increase in desktop sales could very likely be due to the introduction of the mini
2) The intro of the ipod shuffle would lower overall margins
3) The intro of the mini would lower overall margins
4) APPLE'S MARGINS WENT UP

So either the 55% desktop sales increase isn't as much due to the minis as we thought (the shuffles obviously sold well from the marketshare grab), or the margin increase was due to hardware costs dropping (probably because Apple takes an eternity to update anything).

I mentioned this in another post but I think the reason for margin increase was the fact that Apple removed high margin accessories from the standard iPod package (firewire cable, carry case, dock, AC adapters). I remember reading the average iPod buyer spends $150 on accessories. Smart marketing move by Apple.

Even more amazing to me is the increase in margins with the crappy (high margin) PM (which include xserves) numbers. IBM really needs to get a new chip out the door. Expect the doom and gloom crowd to focus on this negative despite all the other positives.

[minimax]

Q1/05 Imac / emac sales units: 456k revenue: $620m
Q2/05 Imac / emac / mac mini sales units: 467k revenue: $483m

And for a reverance on seasonal fluctuations:
Q1/04 Imac / emac sales units: 227k revenue: $251m
Q2/04 Imac / emac sales units: 217k revenue: $252m

Q1/03 Imac / emac sales units: 298k revenue: $356m
Q2/03 Imac / emac sales units: 256k revenue: $302m

The facts speak for themselves. It's the strongest tumble of revenue in 2 years time, which can only be explained by mac mini cannibalizing sales of the emac and imac.

[Zaty]

I do agree it has probably eaten away more from the emac then the imac, but if I look at myself, the choice of the mac mini has lost apple the sale of an imac, although i wouldnt have had the money to buy one already last quarter.

That's a good point, I can imagine quite a few people making the same decision. They planned to buy an iMac later in the year, for different reason like personal financial situation, holding of for an iMac w/ Tiger preinstalled, Rev. B etc. When the mini was announced they decided to go with it rather than waiting for an iMac. So while Apple probably sold more units because of the aforementioned reasons, they will loose sales of units of higher margins, i.e. most likely iMacs, this quarter.

Apple aimed at two groups of potential customers when they came out with the mini:
a) existing Mac user who either want to buy an additional Mac or replace an aging one
b) Switchers

While there is no doubt they will get group A, it's still unclear how many Windows user have switched or will switch only because of the mini.

[aswitcher]

Powermac - 141K shipped, down 16% from Q105 and down 19% from Q204 (the only bad numbers)



Clearly not good.

Are PMs over priced? Is the G5 speed plateau taking its toll? Are Apple's iMacs and other lines taking sales away from the PM?

[smurfjammer]

i think it is a flop
had they sold a million of them you can bet, they would trumpet it from the rooftops - no, this is a flop - for competitive reasons ? come on they are touting their sales on the music store, they always give out numbers, when they are ahead and they are mum when it does not work out too well.
and what does a waiting list mean ? not necessarily strong demand, but maybe just very little allocated production resources.

Apple aren't trumpeting from the the rooftops for the same reason that they won't release the figures for the iPod Mini: "The Competiton"

If you tell everyone how successful a product is and say how many your selling e.g. iPod Mini, Mac Mini, companies who offer similar products will alter they product line to compete and try and undercut you to sell their product.

[takao]

Clearly not good.

Are PMs over priced? Is the G5 speed plateau taking its toll? Are Apple's iMacs and other lines taking sales away from the PM?

well the Powermacs are a niche in the PC market ... it is simply the way that few people can afford such a PC _and_ want such a PC .. the market is small for such machines

(personally i think they are awesome but the price is _way_ too high for me ...)

the powermac is more of a machine for businesses than for home user

[takao]

Apple aimed at two groups of potential customers when they came out with the mini:
a) existing Mac user who either want to buy an additional Mac or replace an aging one
b) Switchers

While there is no doubt they will get group A, it's still unclear how many Windows user have switched or will switch only because of the mini.

i know 2 other windows using friends who are going to buy one (one already ordered ) both are bombarding me with questions ...
sure it's in the tech savy students crowd but still...

1 months ago 4 hands (including me and one of my friends) were raised to the question "who uses an apple" in a lecture with roughly 120 students so i and my friends are doubeling the amount of users ;)

(the only ipod users were the other 2 mac users ... so the halo effect is not _that_ big ;) )

[Tulse]

Folks here are slipping -- where are the iTMS graphs? We have another datapoint: 350 million as of April 13.

[swissmann]

Apple is really sailing now. It sure is a different picture from years ago when a lot of people thought they were good as dead. I hope they just don't forget the importance of their customers.

[gwangung]

Q1/05 Imac / emac sales units: 456k revenue: $620m
Q2/05 Imac / emac / mac mini sales units: 467k revenue: $483m

And for a reverance on seasonal fluctuations:
Q1/04 Imac / emac sales units: 227k revenue: $251m
Q2/04 Imac / emac sales units: 217k revenue: $252m

Q1/03 Imac / emac sales units: 298k revenue: $356m
Q2/03 Imac / emac sales units: 256k revenue: $302m

The facts speak for themselves.

Yeah, and you DON'T compare quarter to quarter. How many times does this has to be mentioned?

[boat]

it's a valid comparison though, note that imac revenue dropped significantly while unit sales actually increased

[kotovasii]

No I purchase their first PowerBook didn't do their homework.....
Well so what are we to do - build our own one? I have just "switched" to Apple via a PB from my old IBM. I am happy - it is fast, very fast. It also has fast graphics card. And I could not find any windows based laptop on the market which would match PB G4 by price, functions, and ergonomics together. OK, Dells are always faster, but so they are heavier, uglier, more audible etc.
If you need ***** hot processor - get a desktop or log into your local G5 cluster. :confused:
In fact I am doing heavy bioinformatics processing and still find my PB G4 better tan my IBM/Dell PCs.
And if I were to wait till a perfect PB will be released then my switch would not happen for another decade or so...

PS The above doe snot mean I do not want to see PB G5 or whatever it will be, it is just current PB is really not that bad.

[bankshot]

608,000 iMac, eMac, Mac mini and PowerMacs
462,000 portables
________
1,070,000 total Mac units sold.

By this reckoning Xserve sales are zero. They are probably folded into the 608,000 number.

No, they're obviously in the portables. Have you seen how thin those things are? :D

[Gus]

So, Apple posts another stellar quarter (especially one where they are historically weak-Q2), trounces the street's per-share increase, and just because they warn that they will meet, but not exceed the Q3 estimates Apple is down almost $4 today. I'm sure some of you will have a good explanation, but it's still nonsense. The company is healthy and making money.

Regards,
Gus

[Zaty]

So, Apple posts another stellar quarter (especially one where they are historically weak-Q2), trounces the street's per-share increase, and just because they warn that they will meet, but not exceed the Q3 estimates Apple is down almost $4 today. I'm sure some of you will have a good explanation, but it's still nonsense. The company is healthy and making money.

Regards,
Gus

According to some reports, analysts expected Apple to sell many more iPods. I don't know but 5.3 mn sounds good to me.

[Tulse]

According to some reports, analysts expected Apple to sell many more iPods. I don't know but 5.3 mn sounds good to me.

I don't know what the hell these "analysts" want, given the huge percentage of the market that Apple has for portable digital music players. How could their results realistically have been better?

[Titian]

I don't know what the hell these "analysts" want, given the huge percentage of the market that Apple has for portable digital music players. How could their results realistically have been better?
The analyst does expectations according to the actual market situation and sets a target for the shares according to these expectations (in this case some analysts expected revenue as high as $3.5 billion).

Analysts are not so stupid as we might think. Their analysis have a fundament which then helps the company, they are woking for, to make a lot of profit. My point of view is that they have certainly a reason why their expectations were so higher.
Over 8% tumble as today shares did is certainly very high and was also stimulated from the actual general fear of economy growth in the US stock exchanges.
Maybe in a few days it will be time to buy (again) Apple shares. :D

[dongmin]

According to some reports, analysts expected Apple to sell many more iPods. I don't know but 5.3 mn sounds good to me.Typical Wallstreet "irrational exhuberance." I remember some forecasting 4-5 million shuffles alone. So 5.3 mil total is disappointing.

Some crazy analysts were projecting 50 million (http://www.forbes.com/markets/2005/04/14/0414automarketscan02.html) ipods for the year. That's 12.5 mil a quarter. You can see why the Street is a wee bit upset.

[Gus]

No, I can see where the Street is a wee bit stupid. How they can possibly expect Apple to ship that many iPods in ONE quarter is ridiculous. The analyists calling for 6 mln iPods this quarter was a rare call, and yet, after they ONLY sold 5.3 mln, eveyone takes that as bad news, when before the conference call, everyone thought the 6mln anaylist was nuts. It's truly stupid. Besides that, they sold more Macs this quarter than were expected. We'll see what happens tomorrow.

Regards,
Gus

[rogo]

Folks here are slipping -- where are the iTMS graphs? We have another datapoint: 350 million as of April 13.

Check the other thread.

FWIW, if it really is only 350 million on April 13, that's actually negative growth rates, which would be a nightmare given the millions of new iPod owners out there.

I'd say to look out to May 11 for the 400 million announcement. It really should come much sooner than that, but it was suggested by the 300 million date that iTunes Music Store adoption is slower and slower among newer iPod owners. The dark cloud on a brilliant quarter.

[Zaty]

Typical Wallstreet "irrational exhuberance." I remember some forecasting 4-5 million shuffles alone. So 5.3 mil total is disappointing.

Some crazy analysts were projecting 50 million (http://www.forbes.com/markets/2005/04/14/0414automarketscan02.html) ipods for the year. That's 12.5 mil a quarter. You can see why the Street is a wee bit upset.

Why should Apple suddenly sell 12.5 million iPods per quarter when they sold 4 million in the busiest quarter? They might reach that number in Q1 06. There were rumours Apple sold 2 million shuffles. If that guess/assumption is close to the real number, they would still have sold over 3.3 million HDD iPods which isn't too bad a number compared to the 4 mn of last quarter.

[topicolo]

Yeah, and you DON'T compare quarter to quarter. How many times does this has to be mentioned?

lol. leave him be. It's investors who think like him that I make my money off of in the stock market :). Waiting for apple to drop to $26-30, then I'm buying!