Apple's 10-K 2005 Financial Details

[MacRumors]

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

MacCentral summarizes (http://www.macworld.com/news/2005/12/01/10k/index.php) Apple's recent Form 10-K filing with the Securities and Exchange Commission which provides an overview of the company's over the past fiscal year.

Highlights include:

- Net Mac sales increased 27% year over year
- Average price of a Mac fell 7%
- 21% year over year growth in sales in higher education
- 11% growth in K-12
- 28 Million iPods sold with 248% revenue increase year over year
- 38 new brick and mortar retail stores in 2005
- Retail sales almost doubled to $2.4 billion
- Research and Development increased (up 9%)

[powermac_daddy]

so, when am i going to get the new mac/intel ibook?

what's the deal?

can i use my design softwares on it?

[lopresmb]

looks good, I know that the retail stores are popping up everyewhere, which is pretty cool.
I espicially like the "Average price of a Mac fell 7%" and hope it continues, because if it does I betcha we get a lot more frustrated windows switchers.

(or maybe the new Mac mini at MWSF will just blow everyone away, so that they can't help switching, with price being no object).

[Super Dave]

Does anyone know how much Apple does spend on R&D?

David:cool:

PS - Where's Lacero on the first post here, asleep? :p

[iGary]

Does anyone know how much Apple does spend on R&D?

David:cool:

PS - Where's Lacero on the first post here, asleep? :p

She's sleeping. Still early over on the other side of the continent.

[Les Kern]

Can you beleive this? Apple is showing very steady growth in the last few years, and i know why. An aquaintance who runs the local office of a big-name investement company (and has a lot of my cash in his office!) has been an ardent PC user over the last 20 years. Never used a Mac, always thought they were toys. He always said that serious folk use PC's, and who's more serious than an investement counselor? One day he walked into an Apple store with his son who was picking up an iPod. While there they sat in the theater and watched a few demos of Tiger. About a half hour later he walked out with 5 grand worth of Mac. He called me one day becasue he didn't know how to do something, and admitted to me that the Mac is about the coolest thing he has EVER seen in computing. So cool, he said, he purchased a LOT of stock. But more important, spends ALL his time on the Mac now. He NEVER thought making movies, keeping and sending pictures and managing his music could be not only damned easy, but FUN to boot.
The word is out, folks.

[steve_hill4]

These results look great, and this year is only going to get better I feel. Mac sales will continue to soar, (especially with all those holding on for the MacIntels getting to buy), prices will fall and iPod sales will be even stronger.

I for one was surprised at the nano sales, they are absolutely flying off the shelves, even though I still felt the mini was an out and out better value iPod. Video content on the iPod and increased sales through iTMS will also continue to grow, which will keep their biggest sellers on the front pages, which will hopefully lead to more switchers.

It's all looking good.:)

[runninmac]

I like the 9% increase in R&D!:D

[motulist]

I notice a glaring lack of any talk about profit. I don't have any idea what type of report this is, so it may not be supposed to talk about profit. But to a layman it seems suspicious at first glance.

[dernhelm]

Does anyone know how much Apple does spend on R&D?

I read somewhere they expensed $19M on R&D for Tiger alone.

[mj_1903]

I notice a glaring lack of any talk about profit. I don't have any idea what type of report this is, so it may not be supposed to talk about profit. But to a layman it seems suspicious at first glance.

They don't have to talk about profits but they made a US$1.3 Billion profit last year off $14 Billion of revenue which isn't half shabby.

[Cinematographer]

I notice a glaring lack of any talk about profit. I don't have any idea what type of report this is, so it may not be supposed to talk about profit. But to a layman it seems suspicious at first glance.

Profits were presented already at the Q4 Quarterly Earnings Call on October 11, 2005:

For fiscal 2005, the Company generated revenue of $13.93 billion and a net profit of $1.335 billion, reflecting annual growth of 68 percent and 384 percent, respectively, and representing the highest annual revenue and net profit in the Company’s history.

I guess we can be impressed by those numbers.

[iGary]

They don't have to talk about profits but they made a US$1.3 Billion profit last year off $14 Billion of revenue which isn't half shabby.

With $8 billion in the bank (before they let go of $1.5 billion to secure long-term flash supplly).

[mj_1903]

With $8 billion in the bank (before they let go of $1.5 billion to secure long-term flash supplly).

I highly doubt they have just paid over $1.5 billion, they have probably stated that they would pay that amount over a year (well 3 months at the rate they are going).

[Cinematographer]

Since the week after the start of the iTunes Music Store, apple shares rose 1028 Percent. :eek: :eek: :D

I still wonder if that's the reflection of the above mentioned brilliant work by the compagny or just another hype?

[iGary]

I highly doubt they have just paid over $1.5 billion, they have probably stated that they would pay that amount over a year (well 3 months at the rate they are going).

http://www.mygadgetbag.com/Home/tabid/36/articleType/ArticleView/articleId/465/Apple-Prepays-125-Billion-to-Secure-Flash-Memory-Supply.aspx

http://news.techwhack.com/2511/211140-apple-secures-flash-memory-supply-deal-for-125-billion/

http://news.yahoo.com/s/nm/20051121/tc_nm/apple_flash_dc

http://news.morningstar.com/news/DJ/M11/D21/200511211735DOWJONESDJONLINE000649.html?pgid=wwhome1d

http://forums.macrumors.com/showthread.php?t=162837

[SiliconAddict]

I like the 9% increase in R&D!:D

Not hard to figure out where that money is going. Its not going to be cheap recreating open firmware on X86 or the X86 equivalent of it. Its not cheap figuring out how to lock down your OS onto an X86 Mac. And I'd bet a few dollars that some of that R&D went into the G5 PowerBook blackhole.

[twoodcc]

this is good news. i'm glad to see that i'm putting my money in a company that is on the move in the right direction

[steve_hill4]

Not hard to figure out where that money is going. Its not going to be cheap recreating open firmware on X86 or the X86 equivalent of it. Its not cheap figuring out how to lock down your OS onto an X86 Mac. And I'd bet a few dollars that some of that R&D went into the G5 PowerBook blackhole.
You mean it's on it's way, and it's codenamed blackhole.:eek:

I guess if it ever did genuinely surface, that would be the best name for it.;)

[WeBleed4Real]

Bought 46 shares of AAPL @ $52.76/share on Sept. 19 of this year.

Currently at $72.22/share, so a net gain of $895.10 since then.:)

Where do you think this is this is going to top out and should sell?

Also ran another test:

If I bought 100 shares of AAPL when I bought my Powerbook Titanium (June 2003) @ $19.20, it would currently be worth $7222.00!
I think there was a stock "split" somewhere there, so it might have been worth even more.

[Cinematographer]

I think there was a stock "split" somewhere there, so it might have been worth even more.

Yes, there was a split. So your powerbook equals $14,500.

And my 2 years old iMac is worth $26,000. :eek:

But I'd still buy it. :D

[Les Kern]

Bought 46 shares of AAPL @ $52.76/share on Sept. 19 of this year.

Currently at $72.22/share, so a net gain of $895.10 since then.:)

Where do you think this is this is going to top out and should sell?



Don't ask idiot me. I bought at 12 bucks and sold at about 37, thinking "It CAN'T go any higher. Well, it SPLIT since then, and climbed to where it is now. Even though my profit put my daughter in one year of a good college, I could have waited and she wouldn't HAVE to work.

[lopresmb]

Bought 46 shares of AAPL @ $52.76/share on Sept. 19 of this year.

Currently at $72.22/share, so a net gain of $895.10 since then.:)

Where do you think this is this is going to top out and should sell?

Also ran another test:

If I bought 100 shares of AAPL when I bought my Powerbook Titanium (June 2003) @ $19.20, it would currently be worth $7222.00!
I think there was a stock "split" somewhere there, so it might have been worth even more.
I am wondering the same thing. Its really high right now ( I remember thinking it was pretty undervalued 4 years ago when the iPod came out), but this is getting crazy...

[m-dogg]

Good to see prices going down and R&D going up!

I know my family contributed to thier growth this year - 2 iMacs,an iBook, two iPods, and a Shuffle in calendar year 2005. My parents are the only ones left, and they are coming around now too...at Thanksgiving my mother was saying "All my sons have Macs now, maybe I should too."

[~Shard~]

Wow, these are all great numbers. And seeing an increase for R&D can only mean even better things as well - Apple spends so much on R&D as it is already!

I've bought and sold APPL a few times over the past few years, perhaps it's time to jump back in and make some more moolah.... ;) :cool:

[Bonte]

I have 1000 shares and value has tripled for me so i'm not complaining. But i refuse to sell out, with the Macintel i hope for a much bigger market-share so i'm taking the plunge. I currently don't own other stock so i'm a real nutcase. :D

Look at the sales figures, a lot of people are waiting for the Macintel but unit sales are already up 30%. Don't give me the crap about pro's buying PPC before its to late, PPC is going to be for sale well into 2007. Its going to boom big time the next 2 years so double or triple the current price isn't just dreaming on my part. :cool:

[DrFrankTM]

I own some AAPL stock. It STILL is the time to buy, not sell. Right before the switch to Intel processors was announced, a share was worth somewhere around 35$ (US). It might be a few bucks higher or lower, but around there anyways. Intel processors and the ability to install Windows - if and when the latter happens - will boost sales in a BIG way. As of now, the stock is still riding the iPod wave, but the real gains are still mostly ahead... I'm pretty confident that the stock will rise to 100$ within (probably much less than) a year. Personally, I think the stock will be a reasonably safe and well-performing investment for at least a couple of years (and probably more). I know I'll be keeping mine for as long as I can!!!

Of course, as I mentioned, I own some stock, so I'm biased: If you join the stock-buying frenzy, it DOES mean more money for me. :p ;)

[Fiveos22]

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

- Research and Development increased (up 9%)

That's why I love this company.

[ShavenYak]

I've made enough on my AAPL to buy a 30" Cinema display... too bad it's in a retirement account. I'm expecting $100/share by June... more if the Mac Mini Media Monster materializes.

[michaelrjohnson]

The "bubble" hasn't burst yet. I'm excited to see what appears to be steady sustainable growth from everybody's favorite fruit company! ;)

[mj_1903]

http://www.mygadgetbag.com/Home/tabid/36/articleType/ArticleView/articleId/465/Apple-Prepays-125-Billion-to-Secure-Flash-Memory-Supply.aspx

http://news.techwhack.com/2511/211140-apple-secures-flash-memory-supply-deal-for-125-billion/

http://news.yahoo.com/s/nm/20051121/tc_nm/apple_flash_dc

http://news.morningstar.com/news/DJ/M11/D21/200511211735DOWJONESDJONLINE000649.html?pgid=wwhome1d

http://forums.macrumors.com/showthread.php?t=162837

As I said, they didn't just fork over $1.5 billion, they just signed contracts guaranteeing they would buy that much.

Nothing really remarkable and not very risky, it just shows how strange Apple are currently. Dell, Microsoft and Sony would probably be the only tech companies who would sign contracts that big these days so it is a big deal that Apple are joining them. :)

[YS2003]

The stock will go up and down at the whim of the market. I think the current stock price of Apple is valued at the high end (as a growth stock in the eye of the Wall Street establishment). I heard some analysts commented Apple will become a $20 Billion company in a few years (in 2007?) with the current growth curve it is experiencing.

In terms of the products and services Apple offer, this news does not necessarily mean better products in the future. As the company gots bigger, it gets more cautious about its product launch and marketing strategy. I hope Steve Jobs and his inner circle will maintain the core management culture in tact as that is what contributed Apple's current growth spurt.

One of the areas I am concerned about bigger Apple is how it is going to support its bigger customer base. I hope it does not farm out to the off-shore customer service support/tech support in the large scale. I had a bad experience with Compaq when I had to speak with a customer service center in India.

[akac]

As I said, they didn't just fork over $1.5 billion, they just signed contracts guaranteeing they would buy that much.

Nothing really remarkable and not very risky, it just shows how strange Apple are currently. Dell, Microsoft and Sony would probably be the only tech companies who would sign contracts that big these days so it is a big deal that Apple are joining them. :)

Actually, they said they'd pre-pay. Read here:

Apple Computer Inc. (Nasdaq:AAPL - news) on Monday said it would prepay $1.25 billion to secure its supply of flash memory used in its market-dominating iPod music players amid an expected surge in demand for the chips.

Apple said it would make the payment over the next three months ....

So that's 1.5 Billion over 3 months which was probably December, January, February. That's essentially forking over 1.5 billion as 3 months is not long term.

[steve_hill4]

Yes, they want to secure their future supply of flash chips, and you can see them making their way into larger capacity iPods over the next few years as well as other Apple products. Remember, they are buying $1.5 billion of supply up front, not $1.5 billion and that's it. They can always extend the deals, but they want to ensure when needed, it's there. They would pay this out over time anyway, they are just paying it upfront to ensure the deal is fixed.

If laptop manufacture gets to the point where a certain amount of storage needs to be solid state, Apple have the supply that others don't necessarily. They are looking to the future, and not having a shortage on their hands when needed.

[freeorangeshoes]

AAPL's share price is currently in line with future expectations. Expect it to increase another 5% or so by the end of the year. The introduction of the Intel Macs will be a big turning point - will either climb higher or bottom out to the 40-ish level.

Basically, hold it if you've got it. And I wouldn't be taking a short position on it anytime soon.

[Eastend]

Does anyone know how much Apple does spend on R&D?

David:cool:

PS - Where's Lacero on the first post here, asleep? :p

Do not think anybody replied to your question? Apple's total R&D expenditures in 2005 totaled $534 million in 2005, an increase of more than 9 per cent from 2004.

Brian

[mj_1903]

So that's 1.5 Billion over 3 months which was probably December, January, February. That's essentially forking over 1.5 billion as 3 months is not long term.

Of course, depending on which article we are reading here it is either $1.25 billion or $1.5 billion but it doesn't matter too much.

Lets just do some maths... Our estimates (a few employees having fun guesses about how many iPods will be sold this quarter) range from 15-20 million units. Lets say 16 million (I estimate 18 million) are sold and that 12 million of them contain flash components.

We estimate that the average price of a single flash chip being bought is about $90. So:

$90 x 12 million = $1.08 billion.

Instantly we have all those quarters flash supplies and enough stock to build another few million iPods for the beginning of the next quarter.

So what those numbers show is that Apple are simply buying flash stock at the normal rate, they have just guaranteed a supply of at least 12-14 million flash chips for their shuffle and Nano lines.

Hell the second article states:

They have reached long-term supply agreements with a group of flash memory components makers including Intel Corp. and Micron Technology Inc. for this purpose.

Which is exactly what I was saying.

[maestro55]

I feel the reason Apple is investing that money into the iPods is because as more and more people purchase the ipods, more and more people will be getting into the Apple culture. I believe that we will keep seeing an increase in Apple products being sold. I also hope that Apple can again become truley competitive in the education technology market.