Apple Q4 2004 Financial Results: Revenue Up 37 Percent

[MacRumors]

In its Q4 2004 financial report (http://www.apple.com/pr/library/2004/oct/13results.html), Apple announced revenue of $2.35 billion, a gain of 37% over the same quarter last year. International sales were 37% of revenue. Net profit was $106 million, up from $44 million for Q4 2003.

During the quarter, Apple shipped 836,000 Macintosh units and 2,016,000 iPods, up 6% and 500%, respectively, over Q4 2003.

In annual results, Apple reported net income of $276 million (compared to $69 million in 2003) on revenue of $8.28 billion (compared to $6.21 billion in 2003).
"We are thrilled to report our highest fourth quarter revenue in nine years," said Steve Jobs, Apple's CEO. "We shipped over 2 million iPods, our Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has received phenomenal reviews and is off to a great start."
The conference call can be replayed via QuickTime here (http://www.apple.com/quicktime/qtv/earningsq404/).

[iShater]

Wonderful news!

I guess Apple is not 'dead'! :D

[Freg3000]

And for people "blaming" (I suppose attributing is a better word) the large number of iPod sales to HP, they only accounted for 6% of total sales.

Great quarter.

[milzay]

Finally, a substantial rise in revenue. Maybe windows users are fianlly seeing the light.

[Some_Big_Spoon]

6% increas in CPU's? I guess that's good. Nothing to write home about though. Would probably sell more if they actually had the machines ready, like 2.5 Duals.

[Rustus Maximus]

roll on...big Apple...roll on

(lovingly pats his new dual 2.5 monster that arrived yesterday)

better late than never ;)

[javabear90]

Good thing I have lots of AAPL stock! :D :p

[im_noahselby]

Any new information pertaining to hardware developments and product releases revealed in the conference call?

Noah

[mugwump]

Imagine what those numbers will be for the next quarter, with HP iPod sales, iMac G5 shipping each month, better availability of G5 Powermacs, updated eMacs...

Sheesh, the new iMacs and Powermac have just begun shipping now and the numbers are good. Apple is firing on all cylinders. Bring on the Powerbook G5 and Tiger!

[zelmo]

Any new information pertaining to hardware developments and product releases revealed in the conference call?

Noah

Nothing yet. The anal-ists are still chatting with Phil and Tim.

[Mudbug]

Somebody oughta call Paul Thurott and Rob Enderle to let them know.

[gwangung]

6% increas in CPU's? I guess that's good. Nothing to write home about though. Would probably sell more if they actually had the machines ready, like 2.5 Duals.

Or iMacs....

Given the lack of product, I think 6% >IS< something to write home about. (Not that I won't expect even bigger numbers for next quarter....)

[zelmo]

Imagine what those numbers will be for the next quarter, with HP iPod sales, iMac G5 shipping each month, better availability of G5 Powermacs, updated eMacs...

Sheesh, the new iMacs and Powermac have just begun shipping now and the numbers are good. Apple is firing on all cylinders. Bring on the Powerbook G5 and Tiger!

They shipped @156k PowerMacs in the QTR. If I heard correctly, they doubled July shipments in August, then doubled the combined July/Aug total in September. By that math: Roughly 17k in July, another 35k in August, and a whopping 104K units in September, once the supply started breaking loose. If that holds consistent for three months, that is 312,000 PowerMacs for the QTR to come, or double prior QTR. You can also expect the iMac number of 56K to go up quite drastically, considering they will have units shipping for all three months. With iPod hitting stride for XMas, this could be a truly astounding QTR for Apple. That may explain the projected $0.39 - 0.42 eps Phil suggested.

Simply rockin'!

[Fukui]

Wow, who voted negative?
I guess 100 mill profit is too small. ;)

[quackattack]

I knew I should have invested.....

[stoid]

Somebody oughta call Paul Thurott and Rob Enderle to let them know.

Seems like someone already has. Notice the two negative rates on this thread! :eek: :D :p

[jiggie2g]

I wonder how many iPods in total have been sold since it's introduction in Nov 2001. I also want to know how many of those total sales were iMac G5's.

Is it just me or is it about time the rest of the Industry jump on the AAC bandwagon, i mean c'mon it's almost 2005 and i can't find a single Flash MP3 player , Car Stereo or Home DVD Player that can Play AAC files , not even reg non-DRM AAC. I would love to have a 100-1000 Track AAC CD/DVD in my DVD Player so i can blast my Stereo.

I find this rediculous like everyone has something against AAC or is too busy sucking off MicroSloth to admit that AAC is a superior format and with over 100,000,000 iTunes MS songs sold and close to 10,000,000 iPods sold(my own assumption based on what i have herd). Isn't it time for the rest of the industry to just come on down to the other side.

[Chaszmyr]

They said that the supply of the processors for the 2.5ghz PowerMac may be constrained throughout Q1, which means there's still a long time to wait for a PowerMac update.

[wide]

Good thing I have lots of AAPL stock! :D :p

lol, me too.

did anyone notice the tone in his (i dont know their names, but the main speaker), when he said that he "[didn't] want to talk about specific product lines" in response to the question about trouble supplying other chips (i.e. the G4). my guess is that apple has stopped ordering the usual quantities of G4 chips so that there may be a smooth transition between the current and future powerbooks and/or ibooks. is there any way to confirm this?

[shawnce]

[reposting some notes so far from the concall]

iPod has over 65% of all digital portable players (in US I believe) over 90% if you limit it to hard drive based.

Supplies for 1.8/2.0 GHz G5 CPUs didn't match demand as expected in the August timeframe, additionally supplies for the 2.5Ghz G5 CPU didn't match demand as expected in September timeframe. So G5 CPU supplies have affected all PowerMac and iMac shipments during all of Q4 however month over month they have been shipping more and more of those systems (in August they shipped more then what the shipped in July and in Sept. the shipped more then twice sum of both August and July). They did give guidance that they feel this shipment growth will be near linear into next quarter... which would make a good growth rate in PowerMac/iMac shipments quarter over quarter :-)

They expect that during Q1 G5 supplies will finally match demand with the only possible exception being the 2.5GHz CPU but they feel even that will unlikely still be an issue by the end Q1. In other words Q1 should see G5 shipment catching up and stay up with demand.

In retail stores they are still seeing around 45-50% of Mac buyers as new to the mac platform and/or buying their first computer. Have not seen a dip in this percentage... they believe it is strongly fed by the "halo" effect of the iPod. New to Mac sales is over 30% as seen in the retail stores and this has been stable if not growing.

Apple has chosen and continues to chose to not target the sub-800 computer systems market and instead spend R&D funds on iPod, iTMS, and systems they currently ship.

eMac up 40% or so if I heard that correctly

They exited the quarter with "substantial" back log orders of the new iMac and iPod/iPod mini. So demand looks good and they believe supplies will continue to grow during the next quarter.

Q1 could be a VERY good quarter for Apple (xmas centered quarter).

[done taking notes]

[shawnce]

lol, me too.

did anyone notice the tone in his (i dont know their names, but the main speaker), when he said that he "[didn't] want to talk about specific product lines" in response to the question about trouble supplying other chips (i.e. the G4). my guess is that apple has stopped ordering the usual quantities of G4 chips so that there may be a smooth transition between the current and future powerbooks and/or ibooks. is there any way to confirm this? Likely reading to much in to that one... he was generally trying to say that the G5 supply issues are not indicative to G4 supplies issues... in other words G4 supplies are fine.

[macridah]

what a slam dunk .... and things are going to get better!!! IBM and Toshiba iron out their manufacturing wrinkles and will soon stop slowing apple sales.

[Macmaniac]

Apple needs to whip IBM to get them moving on the G5. Glad I had Apple stock, after hours trading has them up over $2!!!

[dongmin]

They said that the supply of the processors for the 2.5ghz PowerMac may be constrained throughout Q1, which means there's still a long time to wait for a PowerMac update.if they're still having trouble fabbing 2.5 ghz, i wouldn't hold out too much hope for significant speedbumps anytime soon. maybe the 975/980s will be easier to fab???

[shawnce]

if they're still having trouble fabbing 2.5 ghz, i wouldn't hold out too much hope for significant speedbumps anytime soon. maybe the 975/980s will be easier to fab???

This isn't a fully safe assumption... introducing new systems implies that the 2.5GHz will be bumped down in the product mix. So their constraint comments could be factoring in product CPU shifts that would possibly expand the existing demand on the 2.5GHz CPU (think phase out of 1.8GHz PM or even 2.0 PM, bump of xserve to 2.5GHz or close to 2.5GHz, etc.).

[manu chao]

They shipped @156k PowerMacs in the QTR. If I heard correctly, they doubled July shipments in August, then doubled the combined July/Aug total in September. By that math: Roughly 17k in July, another 35k in August, and a whopping 104K units in September, once the supply started breaking loose. If that holds consistent for three months, that is 312,000 PowerMacs for the QTR to come, or double prior QTR. You can also expect the iMac number of 56K to go up quite drastically, considering they will have units shipping for all three months. With iPod hitting stride for XMas, this could be a truly astounding QTR for Apple. That may explain the projected $0.39 - 0.42 eps Phil suggested.

Simply rockin'!

That doubling of sales (August twice as much as July, September twice as much as July and August combined) referred to G5 systems, not to Powermacs alone.

[Chaszmyr]

if they're still having trouble fabbing 2.5 ghz, i wouldn't hold out too much hope for significant speedbumps anytime soon. maybe the 975/980s will be easier to fab???

If they PowerMacs move to dual core, as some have predicted they might, it may improve the situation. Even if the yield %s weren't any better, they'd only need half as many units if they had one dual core chip instead of dual single cores chips.

[jbembe]

Wasn't the prediction 21-24cents/share? Did this smash expectations or meet them??? I'm not familiar enough with all these numbers to tell actual vs. predictions here...

[manu chao]

[reposting some notes so far from the concall]
eMac up 40% or so if I heard that correctly
[done taking notes]

I thought they said eMac up 19% (year to year or previous quarter?).

Part of that could be people/universities buying the eMac because the iMac G4 was not available.

[shawnce]

I thought they said eMac up 19% (year to year or previous quarter?).

Part of that could be people/universities buying the eMac because the iMac G4 was not available.

Likely my number is year over year with 19% being quarter over quarter... would need to listen to the concall again to nail it down.

[~Shard~]

I knew I should have invested.....

Hindsight is always 20/20. I bought Apple stock @ $15, but sold it @ $28 when there were a lot of negative indicators at the time. I could have made more, but hey, no need to get greedy - I'm happy with my profit. :cool:

Now the question is whether to re-invest or not, what with the current condition of the tech sector, the impact of the high oil prices, and the uncertainty surrounding the election.... :confused:

[fatbarstard]

A great result for Apple and it shows the strength of having things people want to buy - it would seems that the delays in getting chips from IBM is merely delaying sales rather than the sales disappearing....

Which is unusual in business - mosty of the time if the product isn't there for the putner to buy they merely move onto something else... but not Apple...

On that basis Q1 could be very very good

Says Law is working very well at Apple! :D

[Peyote]

Wasn't the prediction 21-24cents/share? Did this smash expectations or meet them??? I'm not familiar enough with all these numbers to tell actual vs. predictions here...

The expectation was 18 cents, up from 12 cents last year. Even a 1 cent increase is good, so yes...26 cents blows away all those "analysts"

[ijimk]

From what is said there will seem to be a while before a power mac update which is good because i just got mine like 2 months ago and plan to use it for the next 3-5 years with updates to it accordingly. :)

[t300]

"Wow, Apple's aren't BetaMax's!' -Doubters everywhere

[MCCFR]

I wonder how many iPods in total have been sold since it's introduction in Nov 2001. <-snip->.

I can answer that.

There are now something like 5.683 million iPods in the wild.

4.416 million of those are accounted for in fiscal 2004 (i.e. Oct 03 - Sept 04) and 3.683 million are accounted for during calendar 2004 thus far.

Since detailed records have been available (Q2/FY2003), Apple have moved 5.136 million iPods.

The 2 million count for iPods came at the end of calendar 2003, after approximately 26 months of sales. So to move 3.683 million more units in around 40 weeks is pretty slick, even if they still have to move another 295 million units to get close to Sony's cumulative Walkman numbers.

[Littleodie914]

Woo hoo! Wuv ya Apple! :D :p

[johnnyjibbs]

Looks like Apple is going from strength to strength. :) iPod sales up 500% from year ago quarter :eek: And it's slowly filtering through to Macs.. :)

[Peyote]

Don't get too excited people...that schmuck at Motley Fool still thinks Apple is overhyped right now!

[shawnce]

iPod sales up 500% from year ago quarter :eek:

Just to increase the impact... 500% is a 6x increase, in other words for every iPod they sold in F2003 they sold 6 in F2004 and most of this increase took place towards the end of F2004. The number also barely feels any of the sales increase likely to come from the HP iPod.

[rdowns]

This is unusual for Apple

After Hours (RTM/ECN): 42.44 2.69 (6.77%)

Their stock usually goes down after they announce results. I've done very well the last couple of years with them. Still own 250 shares and was planning on selling about half. I think I'm going to hold it a while. Their Q1 should be huge.

[Stella]

I give Apple 6 months to live then they will die.

Apple's death is imminent.


.

It will be interesting to see iMacs sales figures in Q1 after all the hype.

[~Shard~]

From what is said there will seem to be a while before a power mac update which is good because i just got mine like 2 months ago and plan to use it for the next 3-5 years with updates to it accordingly. :)

I should hope there are no PowerMac updates for while, as many people are still waiting for their Rev B PMs which they ordered months and months ago! There would be nothing like receiving your "new" DP 2.5 GHz PM on the day the Rev Cs were announced. :eek:

Also, I'm glad you'll be using your PM for the next 3-5 years, but I hope you realize that there are going to be quite a few updates to the PM line in that period of time. ;)

[Moonlight]

I give Apple 6 months to live then they will die.

Apple's death is imminent.




Thats a joke right ? Riiiiiigghhhttt......

[Stella]

Thats a joke right ? Riiiiiigghhhttt......

These Q4 results are just yet more evidence of yet another death nail in Apple's coffin.


Of course I'm joking.

HOWEVER, joking aside.. how long can Apple / we expect iPod sales to beat the previous Quarter results? I must admit, I'm surprised sales haven't flattened off yet. It is very good sales continue to rise... but for how much longer?

[~Shard~]

HOWEVER, joking aside.. how long can Apple / we expect iPod sales to beat the previous Quarter results? I must admit, I'm surprised sales haven't flattened off yet. It is very good sales continue to rise... but for how much longer?

Sounds like Apple needs to release a 60 GB Photo iPod to keep sales on the rise! ;)

[macidiot]

This is unusual for Apple

After Hours (RTM/ECN): 42.44 2.69 (6.77%)

Their stock usually goes down after they announce results. I've done very well the last couple of years with them. Still own 250 shares and was planning on selling about half. I think I'm going to hold it a while. Their Q1 should be huge.

I think its mostly due to the way they blew through estimates across the board( eps, topline) with no trickery (see: MSFT) and the huge upward revision(from Apple, not analysts) of future estimates, the latter having the most to do with it.

Seriously, how is it that the analysts are very good at estimates with some companies and consistently awful with Apple? As long as I've been following Apple stock (about 6 years) they are always way off. They should be embarassed. They should at least work for their paychecks... :P

[VicMacs]

Sounds like Apple needs to release a 60 GB Photo iPod to keep sales on the rise! ;)

*cough* and a powerbook g5 *cough*

[wide]

Don't get too excited people...that schmuck at Motley Fool still thinks Apple is overhyped right now!
:mad: :mad:
ehhhh. the motley fool is such fraudulent source; i can't stand it. i hate that schmuck's name too...seth jayson.

i don't agree with his reasoning, but what egged me on the most about his article is his quirk with "Think Different", which is actually acceptable grammar...a substantive adjective (i think?)

i hate it when people use their obnoxiousness to make themselves sound smarter...in their own minds.

for those who haven't read the article, you can find it at http://www.fool.com/news/commentary/2004/commentary04100703.htm?source=eptyholnk303100&logvisit=y&npu=y :mad:

[macidiot]

These Q4 results are just yet more evidence of yet another death nail in Apple's coffin.


Of course I'm joking.

HOWEVER, joking aside.. how long can Apple / we expect iPod sales to beat the previous Quarter results? I must admit, I'm surprised sales haven't flattened off yet. It is very good sales continue to rise... but for how much longer?

Well, considering the market could easily absorb another 100-150 million mp3 players, I don't see a slow down for awhile yet.

The numbers are easy to make:

N. America... 40-50 million
Europe... 30 million
Japan/Asia... 30 million
Rest... 25 million

Plus, its at the point where people are replacing earlier versions of the iPod. Its not like the walkman where there wasn't a compelling reason to upgrade once you had one (usually it was because the one you owned broke). Oh, and the walkman sold close to 300million units.

No telling what Apple's share will be of the market in the future, but even if they drop to 30-40%, thats still around 50 million iPods.

[iPost]

Okay... I'm putting on my flame resistant suit as I speak...

A few days ago, my boss just asked me to order myself a new laptop for work. It has to be Windows (as that's what the IT guys know). They won't accept a PowerBook running VirtualPC.

You know, if Apple made a laptop running Windows (say, a PowerBook-type system), it would be my first choice by far. And, I could even imagine them producing their own desktop/windows theme, and shipping the iLife apps (that check to see that they are running on an Apple system so that I cannot give them to owners of other systems).

The reason I bring this up, especially under the financial results thread, is that it is apparent to me that without Apple selling iPods to Windows users, their financial results would be nowhere near what they are today.

And that got me to thinking... what kind of numbers would Apple produce if they made Windows laptops too? My guess is that their sales would easily double, if not more. Apple is the premier computer hardware company in the world today -- especially in terms of design -- no one comes close these days. Wouldn't be great if people could buy all electronics from Apple... Windows PCs, PDAs, cell phones, etc.

What do people think about this?

Ducking...

[mj_1903]

This numbers are superb but worrying. Mac shipments were not up to par, especially the _fall_ in PowerMac shipments. I will wait for next quarters results before I judge, but looking at it right now I can only see Apple losing more market share. Lets hope we see a reverse in the trends with the PowerMac and iMac sales.

On the other hand, iPod sales are absolutely stunning. I don't think they will ship anywhere near the Walkman's total numbers, but if they sell 3-4 million iPod's a quarter, which is quite doable, then it will be of great benefit to Apple's bottom line.

[dejo]

what kind of numbers would Apple produce if they made Windows laptops too?

If Apple produced Windows laptops, they would have to support them too and that would be far too expensive!

[SolarisSkyrider]

And that got me to thinking... what kind of numbers would Apple produce if they made Windows laptops too? My guess is that their sales would easily double, if not more.

Personally? I like Apple because of OS X. I like to be able to build my own PC with parts that I select to customize it the way that I want. But OS X is amazing - heads and shoulders above Windows, and if Apple released OS X for x86 systems, I'd go nuts and switch every computer I own over. And yes, this is different with laptops since you can't build your laptop, but still...

Apple hardware is certainly nice and certainly well designed; I love my iBook. But an Apple running Windows? *shudders* :eek:

[iPost]

i don't agree with his reasoning, but what egged me on the most about his article is his quirk with "Think Different", which is actually acceptable grammar...a substantive adjective (i think?)



I agree with your assessment of the Motley Fool. Apple is a very resilient company with talented people. So, one of the main reasons that Apple won't die anytime soon is that they'll just come out some new killer product if their current product line starts to suffer.

But regarding the "Think Different" thing... I never thought it meant to say "think differently" but instead to think "different" just as you might suggest to someone who's asking about the color of a car they should buy, "Think Red" or to someone who is complaining of the heat, "Think Cool." Of course, the purpose could have been to intentionally use incorrect grammar, as to do so is really thinking differently -- i.e., a self-reflective slogan. But my guess it's the former.

Think Good.

[iPost]

and if Apple released OS X for x86 systems, I'd go nuts and switch every computer I own over.

That brings up an interesting question...

If you could only choose one, would you rather run OS X on an x86 system (manufactured by someone other than Apple) or would you rather run Windows on an Apple system?

Personally, I hate Dell, HP, and Toshiba laptops. I don't care what software they are running.

If Apple made a laptop running Windows, I'd certainly use it. Especially, if they shipped it with all the Apple apps so that I never had to use a Microsoft app. I don't do much in Windows. I spend most of my time in applications.

And, if Apple controlled the hardware, that might keep support costs down. I read on some web site awhile ago that the majority of Windows crashes come from buggy drivers.

So, if I had to make a choice, I'd rather have the Apple hardware (with the Apple apps, of course).

[Porchland]

Sounds like Apple needs to release a 60 GB Photo iPod to keep sales on the rise! ;)

The sales numbers certainly make you wonder why Apple would be rushing the 60-gigger to market right now when 20/40 are doing so well.

[halse]

Apple is up $2.66 in after hours trading (to $42.41)
2 mil iPods is better than even I expected

[wrldwzrd89]

Whoa! That EPS is over double last year's EPS...and it looks like next year's EPS could redouble...IE $0.12/share in fiscal '03, $0.26/share in fiscal '04, and $0.54/share in fiscal '05....That's some SERIOUS upturn for Apple. If this trend continues, Apple's EPS for fiscal '06 will be...$1.10/share!!! Zoiks!

[mixgrafix]

Bash Bash Bash, Blah Blah Blah...we have heard it all before, and I bet that same guy bought an HP ipod because he thinks HP makes it.

Thanks Steve and Company for maing a great product that is changing the way we listen to, store, and love our music.

I have had my iPod 1st gen for over three years now, and I had one battery change in it. It works like the day it came out of the box, and I bet it will work one year from now just as well. That is what you get when a company has a vision.... make great products that work, and back them up with quality service.

I bought 1000 shares of AAPL at 12, and my broker thought I was a fool. 30 * 1000 = 30,000 the last I checked. I am going to sell 1/2 it at 50 if it hits this week, and buy me a nice 2.5 gig powermac tricked out with 8 gig of memory, and two 30 inch Apple Cinema Displays. And he wanted me to buy China.com.... went down 85 percent in the same time.

http://forums.macrumors.com/images/icons/icon10.gif

[iMeowbot]

These Q4 results are just yet more evidence of yet another death nail in Apple's coffin.
It could also be evidence of new PowerBooks on Tuesday.
HOWEVER, joking aside.. how long can Apple / we expect iPod sales to beat the previous Quarter results? I must admit, I'm surprised sales haven't flattened off yet. It is very good sales continue to rise... but for how much longer?
Well, Apple haven't really even hit their full stride in many markets, even the music store is only up in four countries yet. I'm guessing that they might get another year off the initial wave, and will need to have an interesting follow-on very soon (and hopefully something cooler than a tiny photo viewer which everyone else will be doing).

[maya]

Sales will go up with the following:

1. PowerBook G5
2. Colour iPod 60 Gig
3. Tiger
4. iTMS (for other countries)
5. iPod mini mini with the 0.85 inch drives (when available)
6. 1 Gig flash market.


Once the 90 fab system is solved (which there is very little news of these days BTW) the clock speed will rise fast, until they move to the 65 fab process. Unless they alread have with the Power5 Lite for the PowerBook and then later on install the dual core for the PowerMac Dual core Dual 3Ghz.<--- I like the sound of that. :D

PowerMac G5 with dual core and dual processor 3GHz
and the
PowerBook G5 with either single or dual core configurations now available.

::drooling:: :D

As you can see there is a lot of room to grow and profit from for Apple at this point.

Update: Only problem I see is that they have to move the PM 2.5GHz forward since the iMac G5 will catch up and the remainder of the products has to move along the same track.

Next PMG5 rev C, dual 3.0 GHz High-Level | dual 2.5 GHz Medium-Level | dual 2.0 GHz Base level.

Next iMac G5 2.0 GHz 20 inch High-Level | 2.0 GHz 17 inch Medium-Level | 1.8 GHz 17 inch Base model.

XServer dual 2.5 GHz High-Level | dual 2.0 GHz Low-Level

PowerBooks G5 = ?

eMac and iBook will go 1.5 GHz G4 until late 2005 when they sport a G5 @ 1.6 and 1.8 GHz.

And that is my prediction :D

[quackattack]

Now the question is whether to re-invest or not, what with the current condition of the tech sector, the impact of the high oil prices, and the uncertainty surrounding the election.... :confused:

Yeah, you're right. That is the question. I think I'll have to mull that over myself. ;)

[srobert]

Makes you wonder what will be the average update cycle for iPods once things settle down. Evey 3 years? 4 years? (Every 2 Generations? Every 3 Generations) I'm talking mrs and mr everybody, not the Apple afficionado. With such a huge market share, it can be very interesting. By the time Apple has competly saturated the market with iPods, Millions of people will be buying their second or third iPod. It's an endless cycle methinks.

[deepkid]

I typically don't care about how people rate the postings here on mac rumors (positively or negatively), but it's BAFFLING to see 13 negative votes (as of this writing) in light of Apple kicking some major financial *ss in this past quarter and overall.

Unless they work for Microsoft (windows, music store departments especially), Real Networks, Dell, Creative or Napster.

Or maybe it's all 13 of the people who bought something other than an iPod. Hah!

[nagromme]

PowerMac sales were down just like iMac G5 sales... because of IBM delays that won't last forever.

AppleInsider noted a key point: Apple does not intend to compete in the sub-$800 market since they say they can't make much money in it.

Personally I think that sounds a little too simplistic, and I think there's more to be read between the lines. I'm still sure Apple has been working on a low-end headless--simply because demand is there, and an iBook or eMac without screen would be cheaper to make--even though they may not be sure when or if to release it. But I'd say we now know that day won't be soon. Maybe it will come when low-end G5 chips are cheaper.

[Tulse]

I'm still sure Apple has been working on a low-end headless--simply because demand is there
Just because demand is there doesn't mean that Apple can make them profitably. More to the point, just because demand is there doesn't mean that filling said demand wouldn't cannibalize sales from other, more profitable lines, and thus actually lower the company's overall profits.

Apple just isn't going to compete with the low-end, generic PC makers. The last time it went that route, it didn't even do it directly -- instead it licenced clone makers (who didn't follow the low-end game plan, but that's another story). There are just too many factors working against such a move -- low margins, cannibalization of higher margin products, even a tarnishing of Apple's somewhat elitist cachet (which is actually part of the brand appeal).

In any case, Apple already has the eMac, which sells pretty close to the low-end.

[deepkid]

I think that Apple is right to avoid cannibalizing so many of their other higher margin machines by trying to compete in a literally no-profit segment of the market.

As with the cube, it would be very difficult for Apple to properly position a headless offering for under $800 without killing some eMac, iMac, powermac and notebook sales.

It is smarter to concentrate on its core product matrix (a good one) while growing other interests like retail, software and digital music which will all help overall revenues and market(s) share more than trying to scrap with flea market types.

A smarter way to offer a low-cost AND uncompromised entry level computer would be to make the eMac a bit more affordable, when possible.

Sell it to institutions for $599, individual student sales for $649 and everyone else at $699 and then keep driving the price down over time.

[deepkid]

In any case, Apple already has the eMac, which sells pretty close to the low-end.

We were on the same wavelength at the same time. :]

[~Shard~]

The sales numbers certainly make you wonder why Apple would be rushing the 60-gigger to market right now when 20/40 are doing so well.

Yah, but the 60 GB would not necessarily detract from the other models or cannibalize sales if marketed correctly. It could be a "deluxe" iPod (preview of the future 5G iPod essentially), with color screen, 60 GB HD and photo capability - and at the 40 GB's old price point, thus not interfering with the current models.

[~Shard~]

Yeah, you're right. That is the question. I think I'll have to mull that over myself. ;)

Let me know what you conclude, I do in-depth financial analysis like that every day and would welcome some other opinions - 2 heads are better than one... ;) :cool:

[ioinc]

Apple is the premier computer hardware company in the world today -- especially in terms of design -- no one comes close these days.

Ducking...

In terms of design yes.

Michael Dell would have something to say about the overall title.

remember the guy with the company that won the hugley competitive PC wars?

Apple can't compete with Dell in the low end.

[Charko]

I agree with your assessment of the Motley Fool. Apple is a very resilient company with talented people. So, one of the main reasons that Apple won't die anytime soon is that they'll just come out some new killer product if their current product line starts to suffer.

But regarding the "Think Different" thing... I never thought it meant to say "think differently" but instead to think "different" just as you might suggest to someone who's asking about the color of a car they should buy, "Think Red" or to someone who is complaining of the heat, "Think Cool." Of course, the purpose could have been to intentionally use incorrect grammar, as to do so is really thinking differently -- i.e., a self-reflective slogan. But my guess it's the former.

Think Good.

Much as I love Apple, I always hated the 'Think Different' slogan.

A few years ago I had a T-shirt printed:-

THINK DIFFERENT
BUT SPEAK PROPER

[edenwaith]

Very nice. These are figures which harken back to the height of the iMac days. I'm surprised in the number of iPods being sold. Once again, very nice. Now if they can bump up the number of computers, at least over a million per quarter.

But in traditional Wall Street fashion, Apple's stock will probably go down because they posted a profit. Meanwhile, Microsoft could release an application which would fry your computer, kill your dog, and send the IRS after you for tax evasion, and Microsoft's stock would shoot up an extra $10 per share.

So do they have over $5 billion in the bank now?

[Charko]

These arguments about Apple shouldn't be trying to compete with the cheap Dells etc. are just missing the point.
None of us headless Mac protaganists want that.
I know two people who look longingly at Macs (they don't want the ugly and inflexible eMac) but just can't afford that much.
A headless 'iMac' well-designed and well-made with a couple of slots would be more expensive than your average PC, but much less expensive than the present iMac.
AND people could keep their monitors.
Most of us are average earners. We'll pay a bit more (even quite a bit more) but can't afford to pay a LOT more.
There's a huge market of discontented PC-users out there and Apple should tap it.

Only then can Apple turn the tables on Microsoft

[elgruga]

I know two people who look longingly at Macs (they don't want the ugly and inflexible eMac) but just can't afford that much.
A headless 'iMac' well-designed and well-made with a couple of slots would be more expensive than your average PC, but much less expensive than the present iMac.

(it would also be just as inflexible as the emac you deride)

AND people could keep their monitors.
(crappy old crt monitors)

Most of us are average earners. We'll pay a bit more (even quite a bit more) but can't afford to pay a LOT more.


There's a huge market of discontented PC-users out there and Apple should tap it.

(Why? If they are discontented, why dont they DO something?) (buy a mac?)

Only then can Apple turn the tables on Microsoft

What for? Apple makes the best hardware and OS - why do they need to compete with anyone? Why make a cheap machine? Theres no profit in it and it WEAKENS THE BRAND.

Earlier on in this very poor thread, we had "I want Windows on a Mac" or "I want OSX on a cheap Intel clone box".

FORGET IT. DREAM ON. Apple isnt a cheap company. If you cant afford the price of admission, then you dont get in.

The alternative to this is Socialism.....which isnt a bad idea, but isnt fashionable right now.

Headless iMac? NO. It isnt going to happen.

All the dumb suggestions in this thread ARE NOT GOING TO HAPPEN.

Facts - someone asked earlier how many iPods produced so far - its about 5.5 million, growing at a rate of 2+ million per quarter, but its also accelerating. Expect totals to reach 10 million by spring 2005, or earlier, depending on Santa Claus. (ipods on xmas lists)

[BeigeUser]

Apple just needs to do one more thing: Bring ITMS to the rest of the world.
That's the only way to make sure that the Fairplay AAC becomes the undisputed king of the audio formats. Once that is complete, you know that there is only one music player that can playback protected AACs.

[isaacc7]

Wish I had made good on my hunch 6 months ago to buy Apple stock. It's great to hear that they're doing so well, I hope the "halo" effect will bring them a little more into the mainstream, or at least allow them to play "HALO" on the iMac! :p

Isaac

[bborofka]

Wow, who voted negative?
I guess 100 mill profit is too small. ;)

100 million profit is not too small. 836,000 sold Macs is.

[Craiger77]

This headless Mac debate always reminds me of my days delivering pizzas for Domino's. People were always calling up wanting to order a small pizza, but we had to explain we only sold medium or large...no profit in delivering a small pizza for free. Apple only sells better or best computers...no lowly "good" versions because there are no profits.

On the other had it could be argued that Apple should forget about direct profits on the low end and make it up by selling .Mac, OS upgrades, software, extra RAM, printers, etc. Now that so much of their sales are through their own stores this makes much more sense because people will tend to buy the extras at the same place they bought their computer.

[Savage Henry]

100 million profit is not too small. 836,000 sold Macs is.

Yeah, but there was an iMac drought and the iBooks were pretty scarce during that quarter. 836k aint that bad, but they have certainly dwelled on the iPod sales....special though they be.

[Windowlicker]

this is insane! when they announced that the iMac G5 will be late everyone was crying that they're gonna loose loads of money. well, it doesn't really seem to be that way. they probably would've made more if they did have the imac come out in summer.

i'm very happy with these results. now that they get lots of cash all the time, I wish they start using it on something big. buy adobe? ;)

[Savage Henry]

this is insane! when they announced that the iMac G5 will be late everyone was crying that they're gonna loose loads of money. well, it doesn't really seem to be that way. they probably would've made more if they did have the imac come out in summer.

I think it may be fair to say that much of the Profit has come from the iPod's 500% unit growth .... so without that financial support the figures could well have looked less encouraging. Once of the concerns I have is the drop in the Japan market for the units, but I'm sure it'll pick up with revised PMacs and the new G5 iMac.

[rdowns]

100 million profit is not too small. 836,000 sold Macs is.

Units shipped might be disappointing but let's not forget that Apple had no iMac to ship until the end of the quarter and all PowerMacs were constrained.

[rdowns]

I think it may be fair to say that much of the Profit has come from the iPod's 500% unit growth .... so without that financial support the figures could well have looked less encouraging. Once of the concerns I have is the drop in the Japan market for the units, but I'm sure it'll pick up with revised PMacs and the new G5 iMac.

Have you read the financials? Apple shipped 836,000 computers for $1.2 billion in revenue. They shipped 2.016 million iPods for $537 million in revenue. Their gross margin on sales for the quarter were $634 million. Clearly computers (and interest on their $5 billion on the bank) are the bulk of their profits.

[synp]

What for? Apple makes the best hardware and OS - why do they need to compete with anyone? Why make a cheap machine? Theres no profit in it and it WEAKENS THE BRAND.

Because we need to get the market share up.

As a lone buyer, I don't care about market-share. But small market-share makes software companies (like the one I work for) uninterested in the Mac as a market, and that means less software available. It also means that some websites (online banking is a common example) don't bother to make their websites compatible with the Mac, because that's such a small (but vocal) minority.

Yeah, yeah, I know. You're going to tell me that if my online bank requires Windows (or IE) then I should drop them. That is false. Online banking is nice, but their Mac compatability is not the most important consideration in choosing a bank. I wrote them email, got a standard reply ("appreciate your input") and that's as far as I'm going to take the issue.

If you like to edit and manage photographs, you have many choices in the PC world: from the high-end Photoshop, through things like PSP and ACDsee to Microsoft's Paint and of course all the open-source stuff like GIMP and Cinepaint. With a Mac you're down to either Photoshop or GraphicConverter or that thing that they gave away on .Mac (can't remember the name). PSP is cheap and feature-wise is close enough to Photoshop to become the favorite or hobbyists, but JASC could not be bothered to port it to the Mac, because of low market-share. That's just one area, and one in which the Mac platform has traditionally been strong. Other examples can easily be found.

If Apple can get the Mac market share to above 5%, software vendors will come. Right now, for desktop applications the order of precedence is 1. Windows. 2. Linux. 3. Mac.

[Savage Henry]

Have you read the financials? Apple shipped 836,000 computers for $1.2 billion in revenue. They shipped 2.016 million iPods for $537 million in revenue. Their gross margin on sales for the quarter were $634 million. Clearly computers (and interest on their $5 billion on the bank) are the bulk of their profits.

I'm just saying that CPU gross contribution has only gone up by about $80m, compared to the iPods increase of $100m. Obviously most profit still comes from the Mac kit, but I had meant to say 'Profit Growth' in my original post :o and just sought to point out a geographical concern in the CPU figures.

No biggie.

[wide]

Well, considering the market could easily absorb another 100-150 million mp3 players, I don't see a slow down for awhile yet.

The numbers are easy to make:

N. America... 40-50 million
Europe... 30 million
Japan/Asia... 30 million
Rest... 25 million

Plus, its at the point where people are replacing earlier versions of the iPod. Its not like the walkman where there wasn't a compelling reason to upgrade once you had one (usually it was because the one you owned broke). Oh, and the walkman sold close to 300million units.

No telling what Apple's share will be of the market in the future, but even if they drop to 30-40%, thats still around 50 million iPods.

I agree that people are re-newing their iPods; I plan on getting a 5G even though my mini is under a year old, but those numbers seem quite large. I agree with you in North America selling the most iPods, but 50 million is really a lot...I'd say more like 20-35 million will sell, at most. Europe/Australia at 30 million also seems like a stretch; I'd bring it down to 20-30 million. I think Japan will sell more than any other country if you find the ratio of iPods to people. 20 million would be my guess. The rest of Asia, like South America and Africa (i.e. the two other populated continents that I haven't mentioned) will sell next to nothing compared to the other continents and countries around the world. The per capita income is so low in some of those countries that an iPod, let alone a computer, are simply out of the question. I think the "rest" would sell five million units, no more.

These are just my figures, and it still adds up to a lot of iPods anyway, especially if people want to upgrade every two or three years....

[ASP272]

Go Apple! It's Your Birthday! It's Your Birthday, Birthday, Birthday! Great results, and the iMac G5 (despite a so-so graphics card) should do really well.

[iMeowbot]

Except that we do have that critical mass now. In other words, the thing about Apple's market share that you have to understand is, when you get under the hood, we don't sell computers, en masse, to sit on every desk of every corporation. So when you take that out, the remaining markets -- we have a much higher market share. Our consumer market share has doubled in the past few years -- doubled. So our market share in the creative-professional marketplace is over 50%. So when you look at the markets that we compete in, our market share isn't 5% or 3% -- it's 10% to 60%. In some cases, it's up at 90%. So that's sort of the myth of the market share. If you throw in the boatloads of PC's that are sold to corporations, then that waters down our market share. But that's not a market we compete in, you know? That's like saying: Let's add the computers that are sold, you know, on Neptune.

Link. (http://www.rollingstone.com/news/story/_/id/5939600)

[myapplseedshurt]

if you look at apple as a computer company. they have lost cpu sales from 3rd quarter. Analysts look at Apple foremost as a computer company. If Apple didn't have the ipod, they would be in the red.

I know some people out there are going to say the ipod represents a new apple, but the ipod does not provide for sustained growth over the next 10 years! with competition coming from all sides, they're market share has nowhere to go but down!

It is good that year to year growth has gained, but that was ALL from notebooks. I haven't seen anything indicating a new ibook or powerbook anytime soon, have you? Apple is in trouble. :(

[Tulse]

we need to get the market share up.
Larger marketshare would be nice, but it is not the be-all for computers. The Mac is doing quite well currently in its niche.

You're going to tell me that if my online bank requires Windows (or IE) then I should drop them.
I won't, because it's true that Real World considerations often trump platform preference. But it is rare to find a bank that doesn't work either with IE Mac or with a hacked agent string in Safari. And, with all the security problems that IE Win has had, and with a growing number of people moving from IE Win to other browsers, I think the problem of IE-specific sites is going to ease in the future.

If you like to edit and manage photographs, you have many choices in the PC world: from the high-end Photoshop, through things like PSP and ACDsee to Microsoft's Paint and of course all the open-source stuff like GIMP and Cinepaint. With a Mac you're down to either Photoshop or GraphicConverter or that thing that they gave away on .Mac (can't remember the name).
GIMP is available for the Mac (http://www.gimp.org/macintosh/).

PSP is cheap and feature-wise is close enough to Photoshop to become the favorite or hobbyists, but JASC could not be bothered to port it to the Mac, because of low market-share.

Photoshop Elements (http://store.apple.com/1-800-MY-APPLE/WebObjects/AppleStore.woa/71501/wo/bN6q51zxHAb22g5xSo52atTx3lo/2.0.9.1.0.6.10.1.2.1.17.0), with much of the power of the pro version, is cheaper than Paint Shop Pro. There are also various shareware apps available.


If Apple can get the Mac market share to above 5%, software vendors will come. Right now, for desktop applications the order of precedence is 1. Windows. 2. Linux. 3. Mac.
If that is indeed their order, then they're foolish, as Mac desktop share is larger than Linux, and its user-base has a history of actually paying for software.

[iMeowbot]

if you look at apple as a computer company. they have lost cpu sales from 3rd quarter. Analysts look at Apple foremost as a computer company. If Apple didn't have the ipod, they would be in the red.
Remember that the bulk of Apple CPU sales are still in the US, where PC sales growth this year has been awful. Last quarter Apple did far better than average in its home territory, and even with the just-ended quarter's supply troubles they managed to keep up about the same growth pace as the rest of the industry here. If they were making a serious effort to sell internationally, I'd be more concerned.

[racolvin]

Because we need to get the market share up.

As a lone buyer, I don't care about market-share. But small market-share makes software companies (like the one I work for) uninterested in the Mac as a market, and that means less software available. It also means that some websites (online banking is a common example) don't bother to make their websites compatible with the Mac, because that's such a small (but vocal) minority.

Yeah, yeah, I know. You're going to tell me that if my online bank requires Windows (or IE) then I should drop them. That is false. Online banking is nice, but their Mac compatability is not the most important consideration in choosing a bank. I wrote them email, got a standard reply ("appreciate your input") and that's as far as I'm going to take the issue.

...

If Apple can get the Mac market share to above 5%, software vendors will come. Right now, for desktop applications the order of precedence is 1. Windows. 2. Linux. 3. Mac.

FINALLY someone seems to understand!

Getting "switchers" over the Mac, even if its on a headless sub-$800 box does NOT dilute the brand! In the conf call, Pete wants to concentrate on those markets that make money and as a shareholder, so do I. But lets understand some seemingly basic truths about things.

We can all agree on the apparent truth of the old saying "the only certain things in life are death and taxes" right? Simplistic I know, but work with me. The same sort of truth applies to the statement "Once a Mac user, almost always a Mac user" as well as "Mac users almost always UPGRADE".

If Peter wants to make money, then maybe he's right that he won't make any IMMEDIATE cash on a sub-$800 headless box. But the long term value of having that user on the Mac platform in term of software sales, add-on sales of upgrades and peripherals, and future upgrades to larger, more expensive Macs is almost a dead certainty.

To get a sizeable chunk of the PC using world to make the "switch" we have to, in a sense, treat them like infants. Those of you who are parents of infants can understand what I'm talking about. PC users have bought and paid for certain things and they feel "safe" (lets leave the virus question alone for a moment) with those hardware choices. But like an infant, we can't try take away both their security blanket and their pacifier at the same time, otherwise they scream and hold on to both. So we give them a sub-$800 box, let them re-use their monitor, their 3-button USB mouse, maybe even their USB keyboard so that they don't feel so totally stripped of their security blanket when they give up their PC/Windows pacifier. They're more willing to try something new if it isn't too expensive in terms of both initial $$ and their "security blanket" feeling of being able to re-use some components.

Once they get comfortable on the Mac, its almost guaranteed they'll upgrade and start buying the software, hardware, and higher-end machines that Peter would like them to. And at that point, they're generally Mac users for life.

We get enough of those to get the Mac platform back into the 10% marketshare range, and the "marginalization" of the Mac will likely slide to a halt and things like Online banking, software availability, etc will be taken care of, which will make the whole Mac community more vibrant and viable.

Frankly, it doesn't have to be a powerhouse, expensive to produce unit either. Look at the eMac and the iBooks. The unit could easily be a headless eMac with a G4 processor. Given the sales numbers for both the eMac and the iBook, the G4 is still a very viable alternative to the G5 for alot of users. If Apple can make money on an eMac now, removing the CRT only lowers the manufacturing cost. If you could take the eMac capabilities, put them in a small headless box and sell it for $699, I'd be willing to bet you a very expensive lunch that the Mac platform would get _piles_ of switchers to try it and then be hooked for life.

Ronnie

[desdomg]

Which is why folks who want something cheaper dont order take away Pizzas from Dominos and go to McDonalds or someone else instead. There is profit to be had in the low cost market if you want it.




This headless Mac debate always reminds me of my days delivering pizzas for Domino's. People were always calling up wanting to order a small pizza, but we had to explain we only sold medium or large...no profit in delivering a small pizza for free. Apple only sells better or best computers...no lowly "good" versions because there are no profits.
.

[srobert]

At the time of this post, Apple has beaten the revised "1 Year Target Estimate" ($44). It was raised from $39 to $44 a few weeks ago. Good job Apple. Still more than 2 months to go. Maybe they need to update the Year End Target again. ^_^ $50 anybody?

Edit:

Merrill Lynch just raised Apple Terget to $49

In related news:

Thursday, October 14, 2004 9:58:53 AM ET
First Albany

NEW YORK, October 14 (newratings.com) – Analysts at First Albany reiterate their "buy" rating on Apple Computer Inc (AAPL.NAS). The target price has been raised from $44 to $46.

In a research note published this morning, the analysts mention that the company reported its 4Q FY04 earnings and revenue results significantly ahead of expectations. Apple Computer's revenue upside during the quarter was primarily driven by the robust iPod unit shipment growth, First Albany says. Apple Computer announced its 1Q FY05 earnings and revenue guidance significantly ahead of the current consensus expectations, the analysts add.

http://www.newratings.com/new2/beta/article_495051.html

[Tulse]

There is profit to be had in the low cost market if you want it.

Tell that to Gateway. Tell that to any of a large number of low-end and white box manufacturers that are now out of business.

Low end companies have practically no R&D costs, and buy cheap components that are often of low quality. Do you want Apple to reduce the research it does, and start pumping out poor quality boxes with razor-thin profit margins? That's just not a space that Apple can compete in effectively.

In any case, as I'll repeat, the eMac is a pretty sweet machine for very little money. No, it doesn't sell for less than $500, and yes, it has a monitor (a rather nice one, in my opinion). But as a value proposition, it is hard to beat. That is Apple's entry-level machine, and I can't imagine why anyone would say Apple doesn't have an affordable machine at $800.

[analogkid]

What for? FORGET IT. DREAM ON.
Headless iMac? NO. It isnt going to happen.

All the dumb suggestions in this thread ARE NOT GOING TO HAPPEN.



Apple may never bring back the Cube, but you dont know for sure and you dont have to patronize the ones who think they will. Shuttle seems to be doing well with thier shoe box case, and I can tell you there are still plenty of us Mac fans for whom the Cube still represents our ideal form factor...
You might very well be right, but cant you say it in a better way?

Besides if Apple simply cant make a G5 Powerbook this next year a G5 Cube might at least give people something positive to talk about. Keep the same 8x8 but offer a videocard slot, the digital I/O of the imac is great so go with that... most users dont need a PCI slot.

[gwangung]

Growing market share is an important goal...but producing a headless machine is certainly not the only way to do it. And it's arguable if it's even the best way to do it.

Staking out selected targetd niches and dominate those. Expand from there. Then select new targeted niches...and expand from THERE (while still dominating your traditional niches). That certainly expands market share...and it may be a surer and less risky way.

[boriskraft]

Because we need to get the market share up.

As a lone buyer, I don't care about market-share. But small market-share makes software companies (like the one I work for) uninterested in the Mac as a market, and that means less software available. It also means that some websites (online banking is a common example) don't bother to make their websites compatible with the Mac, because that's such a small (but vocal) minority.

... Right now, for desktop applications the order of precedence is 1. Windows. 2. Linux. 3. Mac.

Actually, if I look at the numbers that our software (Magnolia, a free open source J2EE content management system -> http://www.magnolia.info) has, I can see that about 50% of the downloads are non-windows users - with Mac being at maybe 35% of total downloads.

You can check for yourself: http://sourceforge.net/project/showfiles.php?group_id=86297

For me as a software developer that means, that while there might be a bigger market in the windows world, its also more crowded, and therefore my actual number of customers level out.

After all, there is a market for BMW's and Mercedes, who have combined about the same market share than Apple.

[mchoii]

I bought aapl @ $14 after I purchased my powerbook (Ti 667). Sold it at $28 (oops). I would never switch back, but how likely is $60? Any thoughts?

[~Shard~]

I bought aapl @ $14 after I purchased my powerbook (Ti 667). Sold it at $28 (oops). I would never switch back, but how likely is $60? Any thoughts?

Your guess is as good as anyone’s, but as for seeing a physical $60 AAPL I would say no, as I think the stock would split before that happened. Regardless, I don’t see many bad things happening to Apple’s stock in the near term, that’s for sure...

[rdowns]

Your guess is as good as anyone’s, but as for seeing a physical $60 AAPL I would say no, as I think the stock would split before that happened. Regardless, I don’t see many bad things happening to Apple’s stock in the near term, that’s for sure...


Last Trade: 44.98
Trade Time: 4:00PM ET
Change: 5.23 (13.16%)

And the Dow is down over 105 points right now.

[macidiot]

Headless iMac? NO. It isnt going to happen.


I didn't realize Steve Jobs was posting on Macrumors. And lives in Canada. :rolleyes:

[Loge]

The sales numbers certainly make you wonder why Apple would be rushing the 60-gigger to market right now when 20/40 are doing so well.

Probably because they are doing so well, and its (say) $100 more.

[macidiot]

I agree that people are re-newing their iPods; I plan on getting a 5G even though my mini is under a year old, but those numbers seem quite large. I agree with you in North America selling the most iPods, but 50 million is really a lot...I'd say more like 20-35 million will sell, at most. Europe/Australia at 30 million also seems like a stretch; I'd bring it down to 20-30 million. I think Japan will sell more than any other country if you find the ratio of iPods to people. 20 million would be my guess. The rest of Asia, like South America and Africa (i.e. the two other populated continents that I haven't mentioned) will sell next to nothing compared to the other continents and countries around the world. The per capita income is so low in some of those countries that an iPod, let alone a computer, are simply out of the question. I think the "rest" would sell five million units, no more.

These are just my figures, and it still adds up to a lot of iPods anyway, especially if people want to upgrade every two or three years....

Actually, I thought I was fairly conservative in the estimates. I meant the total mp3 player market, not just iPods. I mentioned in my post that even if Apple drops to 30-40% share, its still 50million iPods...

[~Shard~]

Last Trade: 44.98
Trade Time: 4:00PM ET
Change: 5.23 (13.16%)

And the Dow is down over 105 points right now.

Yep - Apple's going against the trend - just like in the business world! :cool:

[HiRez]

and close to 10,000,000 iPods sold(my own assumption based on what i have herd).They've shipped about 6 million total iPods. Considering the iPod has been around for several years now and this last quarter alone accounts for 1/3 of all iPods ever sold, that's absolutely staggering. Jobs said today even Apple was surprised by what happened. With Christmas coming up next quarter, 2005 could be a banner year for Apple, even discounting Tiger, PowerBook G5s, and whatever other goodies they come up with.

[~Shard~]

They've shipped about 6 million total iPods. Considering the iPod has been around for several years now and this last quarter alone accounts for 1/3 of all iPods ever sold, that's absolutely staggering. Jobs said today even Apple was surprised by what happened. With Christmas coming up next quarter, 2005 could be a banner year for Apple, even discounting Tiger, PowerBook G5s, and whatever other goodies they come up with.

You mean PowerBook Dual-Core G4s... :p :cool:

[iPost]

There's a huge market of discontented PC-users out there and Apple should tap it.

Only then can Apple turn the tables on Microsoft

I think Apple should apply Microsoft's technique of "embrace, extend, extinguish" to Microsoft itself!

If Apple made Windows laptops that shipped with all of the iLife apps and a bunch of other shell utilities that made Windows feel more like a Mac, a lot more people would buy them. These people would get a Windows machine (embrace), with a lot of Apple extras that make the computing experience so much better (extend)... and then when those people go to buy their next computer (at the Apple store), you ask them if they'd like to get rid of the "Windows flakiness" of their computer, and buy an OS X laptop instead -- after all, at that point, the customer is probably doing everything through their iLife apps and X-like utilities that the switch to OS X would seem like a total win (same apps run on a better/stable platform). So, over time, you wean people off of these Windows machines (extinguish!). Embrace, Extend, Extinguish!

[~Shard~]

I think Apple should apply Microsoft's technique of "embrace, extend, extinguish" to Microsoft itself!

If Apple made Windows laptops that shipped with all of the iLife apps and a bunch of other shell utilities that made Windows feel more like a Mac, a lot more people would buy them. These people would get a Windows machine (embrace), with a lot of Apple extras that make the computing experience so much better (extend)... and then when those people go to buy their next computer (at the Apple store), you ask them if they'd like to get rid of the "Windows flakiness" of their computer, and buy an OS X laptop instead -- after all, at that point, the customer is probably doing everything through their iLife apps and X-like utilities that the switch to OS X would seem like a total win (same apps run on a better/stable platform). So, over time, you wean people off of these Windows machines (extinguish!). Embrace, Extend, Extinguish!

I disagree. Although I'd love for Apple to increase its market share, selling Windows on their machines is NOT the way to do it. Why would you try to sell the public a Ferrari with a rusted out 4 cylinder engine in it? One of the main reasons I use Macs is because of OS X, and removing that from the Mac experience would be foolish - the public would not get a proper appreciation of Macs if Windows was running on the box.

Plus, Macs have never had any viruses before - why would you want to introduce one to it such as Windows? :cool:

[MacinDoc]

if you look at apple as a computer company. they have lost cpu sales from 3rd quarter. Analysts look at Apple foremost as a computer company. If Apple didn't have the ipod, they would be in the red.

I know some people out there are going to say the ipod represents a new apple, but the ipod does not provide for sustained growth over the next 10 years! with competition coming from all sides, they're market share has nowhere to go but down!

It is good that year to year growth has gained, but that was ALL from notebooks. I haven't seen anything indicating a new ibook or powerbook anytime soon, have you? Apple is in trouble. :(
As rdowns already said, Power Mac and iMac sales were down from the 3rd quarter due to constrained supplies after the introduction of new models. Apple only shipped iMacs in 2 of the 13 weeks of the quarter, so I was actually surprised that computer sales were as high as this report showed - I had expected a 40% drop in iMac/eMac sales (due to a lack of iMac sales). Even now, I have yet to see a G5 iMac on display at a Canadian Apple reseller.

[~Shard~]

Even now, I have yet to see a G5 iMac on display at a Canadian Apple reseller.

You're not alone - I've been waiting anxiously to see one in person as well! I would have thought London Drugs would have had them by now...

[Yvan256]

What for? Apple makes the best hardware and OS - why do they need to compete with anyone? Why make a cheap machine? Theres no profit in it and it WEAKENS THE BRAND. Apple isnt a cheap company. If you cant afford the price of admission, then you dont get in.

This is exactly the snobby attitude I *HATE* from a lot of Mac users.

Get over it, it's getting really old.

Why would it "weaken the brand" if MORE people started using a Mac? What deranged kind of world are you living in?

And are you telling me that only rich people should be able to get a good computer with a stable operating system? Geeze, get down here with the real people. In your case, "think different" should be replaced with "change your attitude".

[Yvan256]

Apple only sells better or best computers...no lowly "good" versions because there are no profits.

Okay, long post here (and lots of points to be made, so hang on and read the complete thing before going nuts).

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They'll never really increase their marketshare/base of users if they don't enter this market. Hook people up with a "cheap" Mac (current eMac without CRT, mouse or keyboard, much lower price), then when they upgrade then maybe they'll get a higher-class Mac (since selling the old Mac will still give them some money back, unlike a PC which retains no value at all).

When people buy a 600$CAN windows kit (yes, that DOES include a CRT monitor and even a scanner/printer), they don't really expect to be able to sell it back later. They may expect to re-use their mouse, keyboard, monitor and scanner/printer (and other accessories, which are all USB/USB2/Firewire these days), but they do expect to pay 600$ again for their next upgrade. PCs don't keep any value (only parts get re-used).

When people see a 1049$CAN sticker price for the ComboDrive eMac, all they see is a near-200% price tag. They're not used to having a computer that keeps a lot of its value over time (and believe me, the prices of Apple computers on eBay are insane. I've seen G3/500 iBooks sell for more than half the price of a brand new one). So they think that if they switch to Mac, they'll pay 200% every time.

You *need* that sub-800$US computer for switchers. Once they sell it to upgrade to a better one they'll most probably upgrade to a higher model (since they're used to pay a fixed amount for the PC, this adds up with the money they get for selling their sub-800$ Mac, something they're not used to have).

And even if they upgrade to the new revision of the sub-800$ Mac, at the very least, they won't go back to Windows and stay with Apple and the marketshare still goes up anyway (since selling their old Mac to someone else makes a new switcher who can't even afford a brand new sub-800$ Mac).

This is *exactly* what Apple should be doing to (massively) increase its marketshare.

Sometimes, it's not always about profits...

------

(Crazy theory/idea here, skip if you're the snob type).

I even think Apple should have a switcher eMac without CRT, keyboard, mouse, RAM and HD (people already have a CRT/LCD with VGA/DVI connector, a USB keyboard/mouse, DDR RAM, Hard disk and CD drive). Of course, this switcher Mac would of course not be for everybody, but almost everyone who uses a computer know somebody who could swap their computer parts for them.

Let's see the result:
eMac: 800$US
17" CRT: -100$US (just a guess)
256MB DDR333: -75$US
40GB: -50$US
Apple keyboard: -49$US
Apple mouse: -49$US
Combodrive: -49$US (just a guess)

"Naked" switcher eMac: 425$US

Of course, the prices listed above are from the Apple store, so they have a % of profits in them, so let's put that naked switcher eMac back to 499$US.

In the end Apple would still make a profit on each unit and switchers would now have a computer that's a lot less expensive.

Okay.

So I know this switcher eMac idea is an absolute bottom-of-the-barrel idea and that Apple won't even consider such a thing (too sloppy), but I'm only saying it's possible to (somehow) compete with 500$US systems and still get the same hardware in the end (and so, the same great "Apple experience").

---------

In reality, Apple could simply add the following in the BTO options (and still make a CRT-less eMac in a flat case):
- ability to remove ALL RAM (that is, if not soldered on-board)
- ability to order a system without keyboard and/or mouse
- ability to order a system without a hard disk
- ability to order a system without a combo/superdrive (only if OS X can handle any IDE drive as well as the ones Apple puts into their computers. Or maybe simply make a list of OS X-certified CD/DVD drives)

Now, make the eMacs as easy to access as the iMac/PowerMac (for RAM, HD, CD/DVD drive), and these options wouldn't seem so far-fetched and would fit in the "switcher eMac" pattern.

[Doctor Q]

This is exactly the snobby attitude I *HATE* from a lot of Mac users.In case you aren't just trying to pick a fight, allow me to comment. Are you disputing elgruga's claim that Macs are best? If they are, the difference should be worth something to consumers so it's reasonable for Apple to charge for it, and it's understandable if those with Macs are proud to have the best. If Macs aren't best, it's surprising Apple sells anything at all.


Why would it "weaken the brand" if MORE people started using a Mac?I don't know if the "weaken the brand" claim is true, but I understand it. Why does it puzzle you? Some brands do well by purposely staying elite. When people pay way too much for jeans or tennis shoes with a certain brand name on them, that's why.


And are you telling me that only rich people should be able to get a good computer with a stable operating system?It is truly a shame that cheap plentiful low-end Windows computers can't promise you that, but that doesn't make it untrue. Since not all operating systems are stable, the ones that are can be sold for more (all the more reason Linux is a great deal).


They'll never really increase their marketshare/base of users if they don't enter this market. Hook people up with a "cheap" Mac (current eMac, lower price), then when they upgrade then maybe they'll get a higher-class Mac (since selling the old Mac will still give them some money back, unlike a PC which retains no value at all). At the very least, they won't go back to Windows and stay with Apple.That's one market strategy. So is the one Apple's been using. Personally, I think Apple should work harder to get back its leading position in the education market rather than push into the low-end consumer market where it has less experience and profits are razor thin. We can debate these choices, but none of us can claim to know that one market push is provably better than another.


Sometimes, it's not always about profits...Apple is a business. It IS about profits. It's worth discussing the tradeoffs among ways to increase short-term profits (e.g., advertising) vs. ways to increase long-term profits (R&D, acquisitions, brand name development, and selling a cheaper entry-level system, which you seem to consider the only sensible choice).

[Yvan256]

In case you aren't just trying to pick a fight, allow me to comment. Are you disputing elgruga's claim that Macs are best?

Well, in my opinion, if Macs aren't the best (including OS X) then I don't know what is (certainly not Microsoft products nor the x86 architecture).

Some brands do well by purposely staying elite. When people pay way too much for jeans or tennis shoes with a certain brand name on them, that's why.

BWM's still use the same roads, the same fuel as other cars. Regular pants aren't different than "designer" pants (minus style and price tag). A cheap "no-name" DVD player still plays the same movies as high-end models.

Computers, however, are a different story, and it's currently a huge mess. There's many architectures and operating systems. And none can work with the other (software-wise, emulation excluded). If there was a common OS platform that could run software and Apple only had a more stable OS and better GUI then Microsoft and Linux (but all software would still run on all "three platforms"), then I wouldn't complain. A better computer and a better OS if you can afford it would make sense (just as I'm not angry at BWM drivers, etc).

It is truly a shame that cheap plentiful low-end Windows computers can't promise you that. [...] Personally, I think Apple should work harder to get back its leading position in the education market rather than push into the low-end consumer market where it has less experience and profits are razor thin. We can debate these choices, but none of us can claim to know that one market push is provably better than another.

Indeed, we don't know what Apple *should* be doing, but aren't we debatting what they *could* be doing? The low-cost entry headless eMac (and BTO options to remove stuff a potential switcher might be willing to take from his PC to his new Mac) is an easy-to-do possibility, and something I think Apple should do.

The current mess on the "windows side" is bad for the entire industry, linux sure ain't ready for mass-appeal, interface/normalisation-wise (and the way those zealots think, I'd be very surprised if they get their acts together any time soon).

So if Linux can't really take over Microsoft on the desktop/at home, the only other choice is Apple. And what really bugs me is that Apple really isn't trying as hard as they could be doing (they have the hardware, they sure as hell have the software, they only need to have lower cost Macs).

What's stopping Apple from selling lower-cost computers? What if they still sold older models:

- 1GHz G4 was enough for a 12" PowerBook about one year ago. Should be more than fine for the low-end eMac (as a bonus, it creates a place to put those G4's that won't run at 1.25GHz+)

- Most people don't play movies on their computers, let alone burn DVDs. So forget a combo or superdrive and stick with a regular CD-RW drive.

- I really don't think everyone has a use for 40GB of disk space (of course, lowering the size of the hard disk may not yield any real savings but I'd still check it to save a few bucks on that too if it's worth it).

And I still believe Apple should put some more options in the BTO page, such as being able to remove keyboard/mouse from the order, HD, RAM, CD drive. Those options are meant for people who know what they're doing anyway (and you do get the choice to remove the 56k modem for a 29$US saving on a *PowerMac*, I don't think more "remove stuff" options for lower-class Macs are that crazy).

Apple is a business. It IS about profits. It's worth discussing the tradeoffs among ways to increase short-term profits (e.g., advertising) vs. ways to increase long-term profits (R&D, acquisitions, brand name development, and selling a cheaper entry-level system, which you seem to consider the only sensible choice).

The only real way to increase profits in the long-term is to increase the number of users (note that I didn't say marketshare, because there's so many computer buyers that choose windows, even if Apple doubled it's userbase they could still be losing ground in marketshare).

The only sure way to increase the number of users is to make sure everyone can afford at least one model of your brand. A flash iPod mini is one way to target the low-end of MP3 players, a new low-end model of the eMac would be another. Not everyone want to buy Apple for the design (unlike other stuff), some of us want to buy Apple simply for the OS and its applications.

I'd always take an ugly rectangular beige box with PowerPC hardware and Apple software (OS X, iLife) over an Apple-designed PC case with x86 hardware and Microsoft software, any day.

[johnnyjibbs]

BWM's still use the same roads, the same fuel as other cars. Regular pants aren't different than "designer" pants (minus style and price tag). A cheap "no-name" DVD player still plays the same movies as high-end models.
If I buy an expensive fountain pen, I have to buy the expensive ink cartridges because the cheap Tesco ones don't fit. Likewise, if I buy a Gilette Mach 3 Turbo razor, do you think I could use my cheap unbranded razor blades with them? ;)

[~Shard~]

If I buy an expensive fountain pen, I have to buy the expensive ink cartridges because the cheap Tesco ones don't fit. Likewise, if I buy a Gilette Mach 3 Turbo razor, do you think I could use my cheap unbranded razor blades with them? ;)

Why would you want an expensive fountain pen? A 5-cent pen from Walmart/Tesco would work just fine. That's one of those commodities I don't understand why people would want to pay more for - just like "gourmet bottled water". ;)

And just use a straight razor, more economical in the long run... ;)

[johnnyjibbs]

Why would you want an expensive fountain pen? A 5-cent pen from Walmart/Tesco would work just fine. That's one of those commodities I don't understand why people would want to pay more for - just like "gourmet bottled water". ;)

And just use a straight razor, more economical in the long run... ;)
I was just illustrating a point. And I do find that a decent fountain pen does last better ;)

[~Shard~]

I was just illustrating a point. And I do find that a decent fountain pen does last better ;)

And I agree with you, and I know you were just making a point - just having fun. :)