Apple Reports Best Quarter Ever in Q1 2012: $13.06 Billion Profit on $46.33 Billion in Revenue

AppleScruff1 said:

Every human I have ever met in life prefers to pay less for a product. Except Apple customers. They like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company. These are the very same people who cry when their cell bill goes up $5 month and accuse the provider of gouging them.

Click to expand...

As a consumer I want the best products for the cheapest price, ok.

But as a shareholder I want Apple to find the price tag that's best for the company, not too much and not too little. Since they have a hard time producing the stuff people want to buy, I don't believe that Apple charges too much at the moment.

AppleScruff1 said:

Every human I have ever met in life prefers to pay less for a product. Except Apple customers. They like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company. These are the very same people who cry when their cell bill goes up $5 month and accuse the provider of gouging them.

Click to expand...

Way to trot out the same old stereotypes. While conveniently ignoring that these profits are driven by the iPhone which isn't any more expensive than comparable phones for most consumers. The iPad seems to be priced lower than comparable tablets as well.

Am I supposed to be annoyed that Apple is "gouging" Verizon for an iPhone when Verizon charges me the same amount whether or not they are subsidizing a phone for me?

Cinematographer said:

As a consumer I want the best products for the cheapest price, ok.

But as a shareholder I want Apple to find the price tag that's best for the company, not too much and not too little. Since they have a hard time producing the stuff people want to buy, I don't believe that Apple charges too much at the moment.

Click to expand...

The funny thing is the whiners who talk about being overpriced can't A) produce the "How Much Smartphones Should Cost" handbook, or B) provide an example of a similarly spec'd phone that is priced far less then the iPhone.

It's easier to just cry, I mean say "Apple is overpriced!!!" like everyone else does, I guess.

BaldiMac said:

Way to trot out the same old stereotypes. While conveniently ignoring that these profits are driven by the iPhone which isn't any more expensive than comparable phones for most consumers. The iPad seems to be priced lower than comparable tablets as well.

Am I supposed to be annoyed that Apple is "gouging" Verizon for an iPhone when Verizon charges me the same amount whether or not they are subsidizing a phone for me?

Click to expand...

It's not a stereotype at all. I never stated that the iPhone is over priced either. Only here would a non shareholder take delight in how much money a company made. Anywhere else in life and they would be crying foul if a company made 40% + profits. You would be annoyed if your carrier raised your rates period. It has nothing to do with Apple.

cirus said:

Question: Would you prefer if Apple charged 10% less and made only a 20% instead of a 30% profit margin.

Click to expand...

As someone who once actually took and passed a micro-econ class, I would prefer that Apple charged more for certain products. A price closer to matching supply with the demand, which usually helps the efficiency of an economic system.

The lines would be shorter. Particularly in China today.

hchung said:

(just taking a ballpark guess. 1000 engineers at $120k/year for 6 years would be $7 billion. That'd be half of this quarter already and wouldn't include the years between the original iphone and the 4S. Salaries arn't cheap.)

Click to expand...

Actually, nowhere near $7 billion.

Fun Fact O' The Day

Apple is selling more iPhones each day than there are humans being born:

The 37.04M iPhone figure divided out over the period of 98 days in the quarter gives us a slightly lower number at 377.9K sold every day, but it’s still higher than the world’s average birth rate which clocks in at 371K per day.

Click to expand...

Pretty amazing.

At first I thought this must ultimately portend badly for Apple's long-term growth prospects. After all, eventually you'll run out of people to sell to. The glaring flaw in that argument, however, is the fact that the average smartphone's lifespan (~2 years) is considerably shorter than that of most humans.

Bonus: While not an official advertiser at the Superbowl, it looks like Siri will be making a guest appearance in a Doritos spot...

gnasher729 said:

Actually, nowhere near $7 billion.

Click to expand...

He added a 0

gnasher729 said:

Actually, nowhere near $7 billion.

Click to expand...

Anyone trying to use numbers to justify why Apple needs $100,000,000 in the bank clearly doesn't know math. I think the rest of us just chucked at his attempt and moved on.

I am intrigued how people picture "$100 billion in the bank".... because according to Apple's own financial statements, this is quite not the case. They have $10 billion in cash and equivalents, another $19.8 billion in short term investments, and another $67.4 billion in long term investments. Neither the short nor long term investments represent any liquid funds that can be converted to cash immediately.

The return on those investments provides a steady influx of cash flow, the principal of which should NOT be depleted. Where's the sense in doing such a thing, particularly if the returns generated can provide a continuous stream of cash that could be used for any of the aims that have been debated here... the merits of which I won't discuss or segregate. Whatever it is you think Apple could be doing, growth-wise, charity-wise, anything, cannot be done as effectively and sustainably if they deplete those principal balances... the excess of which also act as a great deal of insurance against any number of potential economic situations that could harm a heavily leveraged company's longevity.

But I understand why people think that, since it has been the norm for businesses to achieve unsustainable growth by borrowed capital and acquisition. But this is precisely why Apple has survived crises in the credit markets that otherwise restricted access to capital to those companies who depended heavily upon it. Apple didn't fall on hard times... quite the contrary, Apple leapt forward exponentially *because* it has that cushion, and when you operate well within your means (a great lesson for any household), those balances pile up over time and give you even greater cushion to keep doing great things.

To say "they don't really need all that money" is like saying their 24,000 employees don't really need all that job security, their millions of customers don't need a heavily insured stream of future products to satisfy demand... I have a rule about investments: If a company's managers do a better job of managing that money than I could, I'd rather they keep the money than pay me dividends, because in the long run I'll be better off. If not, then pay me the dividends... but Apple isn't that company. I can generate pretty strong growth as a business analyst who also happens to be an investor, but not the kind of growth generated consistently by an Apple or Berkshire-Hathaway.

AppleScruff1 said:

It's not a stereotype at all.

Click to expand...

"Apple customers... like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company."

That is a stereotype.

I never stated that the iPhone is over priced either.

Click to expand...

No, but you stated that Apple customers like to pay more, which pretty clearly implies that Apple products cost more than comparable products.

Only here would a non shareholder take delight in how much money a company made.

Click to expand...

Does the fact that people are obsessed with sports teams confuse you as well?

Anywhere else in life and they would be crying foul if a company made 40% + profits.

Click to expand...

That's ridiculous. First, Apple isn't making 40%+ profits. They make around 25%. Second, there isn't any such thing as a universal "fair" margin. It depends on the industry and the products being offered. Supply and demand. (Microsoft's gross margins are over 75%.)

Anywhere else in life and they would be crying foul if a company made 40% + profits.

Click to expand...

Unless it were something You invested in and were selling on eBay.

Contrast Apple behavior to that of Samsung

Quote: "Samsung Electronics Co. (005930)’s capital expenditure dwarfs that of competitors and has helped make it the world’s biggest maker of TVs, memory chips and flat-screen panels. Record spending this year may further pressure rivals.
Samsung and its affiliates plan to spend 47.8 trillion won ($42 billion) this year on new product research and upgrading plants, the group said this month. The Suwon, South Korea-based company, which reports full-year earnings tomorrow, spent more than Sony Corp. (6758), Intel Corp. (INTC) and Cisco Systems Inc. combined in 2010, according to data compiled by Bloomberg.
The spending spree will enable the chips and display supplier to Apple Inc. and Sony to build on record sales last year and boost profit that doubled in the five years to 2010. That may leave competing makers, already mired in losses from a glut of commodity chips, even farther behind in their quest to diversify into the higher-margin specialty semiconductors for phones and tablets that have made Samsung so successful.
“We have a Goliath in the technology industry,” said Kim Hyung Sik, a Seoul-based analyst at Taurus Investment Securities Co. “The gap between Samsung and the laggards will keep widening, particularly in memory chips.”"

Now that's what wise investment is. Samsung re-invests their profits. In return they get research (order of magnitude more patents than Apple has), manufacturing prowess (semiconductor FABs etc.) and much more. What does Apple have? A lot of hype. Imagine if the next iPhone is not popular (may happen even if it's technically OK - just because people get bored with it), what happens to Apple? What do they have?

BaldiMac said:

"Apple customers... like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company."

That is a stereotype.



No, but you stated that Apple customers like to pay more, which pretty clearly implies that Apple products cost more than comparable products.



Does the fact that people are obsessed with sports teams confuse you as well?



That's ridiculous. First, Apple isn't making 40%+ profits. They make around 25%. Second, there isn't any such thing as a universal "fair" margin. It depends on the industry and the products being offered. Supply and demand. (Microsoft's gross margins are over 75%.)

Click to expand...

I'm not confused at all. Twist any way that makes you happy. Wearing blinders makes for a very narrow field of vision.

AppleScruff1 said:

I'm not confused at all. Twist any way that makes you happy.

Click to expand...

What part did I twist? The part where you don't know what a stereotype is? Or the part where you don't understand the difference between gross margin and profit margin? Or the part where you think a 40% margin is something to complain about for any company?

BaldiMac said:

What part did I twist? The part where you don't know what a stereotype is? Or the part where you don't understand the difference between gross margin and profit margin? Or the part where you think a 40% margin is something to complain about for any company?

Click to expand...

Read my original post instead of distorting what I said. And I quote:

Every human I have ever met in life prefers to pay less for a product. Except Apple customers. They like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company. These are the very same people who cry when their cell bill goes up $5 month and accuse the provider of gouging them.


Stick to the facts.

Avatar74 said:

To say "they don't really need all that money" is like saying their 24,000 employees don't really need all that job security, their millions of customers don't need a heavily insured stream of future products to satisfy demand... I have a rule about investments: If a company's managers do a better job of managing that money than I could, I'd rather they keep the money than pay me dividends, because in the long run I'll be better off. If not, then pay me the dividends... but Apple isn't that company. I can generate pretty strong growth as a business analyst who also happens to be an investor, but not the kind of growth generated consistently by an Apple or Berkshire-Hathaway.

Click to expand...

I agree with you for the most part, but I guess the question I would have is whether Apple's 100 Billion is really making a good return or not. I think they could (in theory)buy AAPL shares and do pretty good! haha. (essentially buy back their own shares, which would drive their own shares up).

I have a feeling that their $100 B is invested in T-bills or something earning something in the low single digits - maybe it's safe. I would like to know if their investment portfolio is ultra conservative or what?

Probably this information would be listed somewhere in their financial statements, but I confess that I have not looked to see.

So I still question whether the "money is just sitting there doing nothing". Did Apple list their investment income? I think they would have to do that. Did they do good or bad on their investment portfolio - does anyone know that. I'd be interested to know.

Pardon my own laziness to research this myself.

lilo777 said:

Now that's what wise investment is. Samsung re-invests their profits. In return they get research (order of magnitude more patents than Apple has), manufacturing prowess (semiconductor FABs etc.) and much more. What does Apple have? A lot of hype. Imagine if the next iPhone is not popular (may happen even if it's technically OK - just because people get bored with it), what happens to Apple? What do they have?

Click to expand...

That's across "all their affiliates", remember; which could be anything from ships to refrigerators to sewing machines.

But why spend 42B on all that when you already have the tightest, most efficient, most focused R&D in history? Samsung is waiting to see what Apple does next and is spending all this money so they can be ready.

Why spend more, when you can invest a couple of billion in equipment for your contractors' assembly lines -- like buying up all the machines that carve out blocks of aluminium?

Why spend more, when you can buy a cutting edge Israeli company that determines how flash storage is used and improved in the future?

Why spend more on improving or extending chip fabs when you have already bought a leading company in chip design and custom SOC implementation?

Why spend more to hold onto, maintain or improve plants and manufacturing facilities of your own, when you can quickly get new facilities going anywhere in the world, such as in Brazil?

...and the list goes on.

Why do all, or any of these things just to gain control over how things are designed, assembled and used today (like batteries or applications for glass or metal coatings, for example), when you are already busy reinventing how things are going to be tomorrow and improving the supply chain that actually gets them into your customers' hands?

The "hype" is that all these Apple competitors have do something in order to look like they know what they are doing. Samsung is just in a better position to that something than most others. But have Samsung distinguished themselves as another Sony? Perhaps in quality or reliability, but not in spirit or originality.

By contrast, Apple is most interested in creating products that change the way we do things, or the way certain industries work. All the money in the world doesn't help you do that; but when you do it, all the money starts flowing to you and you have a chance to keep doing it.

BuddyTronic said:

I have a feeling that their $100 B is invested in T-bills or something earning something in the low single digits - maybe it's safe. I would like to know if their investment portfolio is ultra conservative or what?

Probably this information would be listed somewhere in their financial statements, but I confess that I have not looked to see.

Click to expand...

You can find some of the information here: http://investor.apple.com/sec.cfm

MacBram said:

That's across "all their affiliates", remember; which could be anything from ships to refrigerators to sewing machines.

Click to expand...

I already said that a couple of times, but somehow that seems to be hard to grasp for the people who keep posting about Samsung.

MacBram said:

The "hype" is that all these Apple competitors have do something in order to look like they know what they are doing. Samsung is just in a better position to that something than most others. But have Samsung distinguished themselves as another Sony? Perhaps in quality or reliability, but not in spirit or originality.

Click to expand...

The better and most hilarious example is how the whole industry (or better yet, a new whole industry - this time, TV makers) is scrambling to match no-one-knows-what, only because of a couple sentences in a fscking biography.

That's how significant Apple, and what they do, is.
Or else, that's how complacent and uninimaginative the rest of the industry had got. If they had to feel the insinuation of the Apple menace to start pushing forward, well, they'll deserve whatever happens to them. Good riddance, I say.

AppleScruff1 said:

Read my original post instead of distorting what I said. And I quote:

Every human I have ever met in life prefers to pay less for a product. Except Apple customers. They like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company. These are the very same people who cry when their cell bill goes up $5 month and accuse the provider of gouging them.


Stick to the facts.

Click to expand...

Well, I have no skin in this game but I'll just mention that as an Apple customer I don't like paying more nor do I get any personal satisfaction from high margins in Apple's earnings reports. Therefore, your statement trying to stereotype Apple customers is factually incorrect.

ps - this might lead you then to wonder why I own an iPhone, since you seem to hold the opinion that they are higher priced than equivalent smartphones from other companies. Well, when I first got an iPhone in 2007, there simply wasn't an equivalent product for ANY price. (And I was quite pissed when Apple dropped the price by $200 and only gave us early adopters a $100 rebate.)

pps - just to be sure, I hope you don't try to use the no-true-Scottsman falacy to discount my statement.

elistan said:

Well, I have no skin in this game but I'll just mention that as an Apple customer I don't like paying more nor do I get any personal satisfaction from high margins in Apple's earnings reports. Therefore, your statement trying to stereotype Apple customers is factually incorrect.

ps - this might lead you then to wonder why I own an iPhone, since you seem to hold the opinion that they are higher priced than equivalent smartphones from other companies. Well, when I first got an iPhone in 2007, there simply wasn't an equivalent product for ANY price. (And I was quite pissed when Apple dropped the price by $200 and only gave us early adopters a $100 rebate.)

pps - just to be sure, I hope you don't try to use the no-true-Scottsman falacy to discount my statement.

Click to expand...

Haha, that was classic. "Every human I've met prefers to pay less. Except Apple Users. Apple users like paying more, but I'm not stereotyping." Nice.

AppleScruff1 said:

Read my original post instead of distorting what I said. And I quote:

Every human I have ever met in life prefers to pay less for a product. Except Apple customers. They like to pay more and get some sense of personal satisfaction from the fact that Apple makes more money than any other company. These are the very same people who cry when their cell bill goes up $5 month and accuse the provider of gouging them.


Stick to the facts.

Click to expand...

I read your statement. No reason to repeat yourself. Which part did I distort?

elistan said:

Well, I have no skin in this game but I'll just mention that as an Apple customer I don't like paying more nor do I get any personal satisfaction from high margins in Apple's earnings reports. Therefore, your statement trying to stereotype Apple customers is factually incorrect.

Click to expand...

As an Apple customer myself, I don't like paying more, but I don't _mind_ paying more where I feel the extra cost has "value" (and doesn't have a lower cost, equivalent, alternative) : whether it's purely subjective like the design aesthetic, or more tangible [per my experience] such as the service and support network, or device flexibility (one machine providing a platform for Windows, Android and iOS development).

BaldiMac said:

I read your statement. No reason to repeat yourself. Which part did I distort?

Click to expand...

I wouldn't worry about it. The "supposed experts" are running rampant here lately helping us Apple folks see the light and clear up any misunderstandings we may have about Apple's success and why Apple's products are superior to the "third-rate" garbage out there. How nice of them.

I can tell you that as an Apple customer I would prefer to pay as little as possible for Apple products. That's why I buy Apple products at Amazon (tax free plus free shipping) and the Apple refurbished store whenever possible.

What a ridiculous statement to make that because we are Apple customers we love to pay more. That definitely makes my top ten list of most ridiculous statements about Apple users I have heard here.