Apple's Earnings Results to Focus on Mac (and iPod)

[MacRumors]

Bloomberg reports that Apple's earnings report later today will focus on Mac and iPod sales which make up for 75% of the company's revenue. Despite the prominent iPhone 3G launch last week, those sales fall outside the reporting window for today's earnings. In addition, the supplies of iPhones that were sold during this past quarter will not be reported upon until next quarter:

Supplies of the original version of the iPhone dwindled in May as Apple prepared the updated 3G model. Sacconaghi estimates that Apple shipped 715,000 iPhones in the quarter before running out. Because new software that was promised as a free upgrade wasn't available until July 11, those shipments won't count as sales until later, Apple said in April.

So, iPhone-weary readers may be spared extensive iPhone coverage during today's financial results. Despite the extensive media focus on the iPhone, one portfolio manager clarifies that "the Mac is the primary reason [they] own Apple shares". He specifically cites accelerated growth in Apple's PC business over the past few years.

Apple is predicted to have experienced 36% growth year-over-year from last year's revenue and will be webcasting their official financial results at 2pm PT/ 5pm ET on Monday, July 21st.

Article Link

[nos]

We'll see how the market reacts on these results.

[BRLawyer]

Originally Posted by nos

We'll see how the market reacts on these results.

It's about time to see non-iPhone related news for a change...Macs ARE the main revenue source for Apple and should never be disregarded...especially when people buy them at a rate 3x that of the inferior PC industry...GO APPLE!

[DoctorLee]

Sometime in the next century the great discussion among stock analysts (assuming they aren't extinct by then) will revolve around why this generation's had so much trouble understanding The Plan.

Every iPhone and iTouch is essentially a very compact OS X computer. It is no longer valid to point to iMac sales and distinguish them from Apple "computer" sales!

What Steve & Company has done is to get a Mac into some 10 million hands, who think they don't yet own one. The App Store isn't selling phone accessories... it is selling OS X programs.

So tomorrow's numbers don't exclude iPhone sales, they exclude an entire line of Apple computers... Press On Steve; a hundred years from now they will be telling their kids how you ended up owning the market.

[mixel]

Originally Posted by DoctorLee

So tomorrow's numbers don't exclude iPhone sales, they exclude an entire line of Apple computers... Press On Steve; a hundred years from now they will be telling their kids how you ended up owning the market.

I agree to an extent, but Phones complement, not replace computers. So Apple have two completely different markets. Nobody's going to be replacing a phone with a computer, or vice-versa. They need to distinguish, as people "need" to buy both - they don't encroach on each other at all. If I buy a boat i'm still going to need a car.

Until the iphone a) multitasks fully and b) isn't a phone.. It's not a viable computer replacement, its not in the same price-range either (psychologically at least) ..

Originally Posted by DoctorLee

What Steve & Company has done is to get a Mac into some 10 million hands, who think they don't yet own one. The App Store isn't selling phone accessories... it is selling OS X programs.

iPhone isn't a Mac. It runs osX, but the OS is the interface too. It doesn't have that, it has iphone os X.. Its no more a Mac than a hackintosh is a Mac.. Apple say what is and isn't a Macintosh, not the fans.

To consumers its just like the iPod was. Yes it'll have a huge halo effect, but no, it shouldn't be counted as Mac sales.. Apple have a long way to go to own the mobile *or* computer market. For most mobile users still, any device will do providing it does calls, texts and looks pretty.

[geerlingguy]

I think Apple is finally over one major hurdle in the desktop and laptop markets—that is, people know (and more importantly feel) they have the option of getting a Mac.

However, there's one more hurdle I think Apple must overcome to break into stronger sales... and maybe even the coveted 1, 2 or 3 spot in desktop manufacturing sales. Make the Mac mini a $499 computer again—or less! A lot of people are willing to buy a Mac now (who weren't just 5 years ago), but they still don't want to spend a lot on a computer.

If Apple could simply break through to this market segment with a lower cost computer ($579 sounds like a lot more than $499, the mini's original price point), I think things would change more rapidly in Apple's favor.

[geerlingguy]

Originally Posted by mixel

To consumers its just like the iPod was. Yes it'll have a huge halo effect, but no, it shouldn't be counted as Mac sales.. Apple have a long way to go to own the mobile *or* computer market. For most mobile users still, any device will do providing it does calls, texts and looks pretty.

And many mobile users (in the US, but I'm sure this applies to other markets as well) will not be buying an iPhone simply because of the AT&T/other service plans' requirement for entry. With an iPod, sales were limited to Mac users at first (and it did pretty well then), but when the iPod was opened up to anyone who had a Mac or PC with a USB port, that's when it dominated.

(To a much earlier post) The iPhone is not a Mac, and will never become one. There are so many things it simply cannot do that a desktop Mac with a monitor (built in or no) can, and this will not change. Therefore, it is extremely important that both be distinguished.

[bobbleheadbob]

I don't know how this compares to their projections, but 36% growth in a down market is outstanding! We should all be doing this well....

[kresh]

hmm. haven't heard the analysts pondering about the extended out of stock for the iPhones for the past few months is going to affect earnings.

[guet]

Originally Posted by mixel

Nobody's going to be replacing a phone with a computer, or vice-versa.

On the contrary, in 10 years, many people will do exactly that. The vast majority of people use their computer for 3 things :

email
web
casual games

All of those people would be well served by a phone which just happens to be a computer, and as the market for iphones grows, I think we'll see Apple's focus shift to portables (for consumers), to the detriment of desktops (which will still be used for work). Desktops will become more of a niche for them, as they move on to the next big thing - mobile computing.

[peterdevries]

Originally Posted by geerlingguy

(To a much earlier post) The iPhone is not a Mac, and will never become one. There are so many things it simply cannot do that a desktop Mac with a monitor (built in or no) can, and this will not change. Therefore, it is extremely important that both be distinguished.

I don't agree. It's very apparent that Apple is moving slowly out of the boundaries of the computerbusiness with Apple TV and iPhone towards a combined home computing / businesscomputing / entertainment combination. With the introduction of Airtunes some time ago and the remote control function of the iPhone, it is clear that Apple is determinedly converging technologies towards a single user experience.

More and more Apple products generate extra value when used together, as opposed to buying and using them as a single product. Example: Time Capsule as a backup solution and network hub, iPhone as an Ipod, Telephone AND remote for your Apple TV / Mac.

The products Apple makes are increasingly becoming excellent products standalone (they were already) that are puzzlepieces which connect to other products and enhance the experience. This makes the HALO effect much more effective and pronounced than before: Where it used to be: "this iPod is cool and works great, lets take a look at a Mac", it is now changing into: "this iPhone is great, and if I buy the AppleTV and a Mac I can stream movies, listen to music and control everything, while I can transfer all my contacts, appointments from my Mac to my iPhone".

Apple products are increasingly becoming more value as a collection that just the sum of its parts.. Good thinking..

Other companies are doing the same, but from a different position. Look at Logitech with the squeezebox and of course Sony Playstation etc. I consider Apple to come from the strongest position.

[deputy_doofy]

Originally Posted by DoctorLee

Sometime in the next century the great discussion among stock analysts (assuming they aren't extinct by then) will revolve around why this generation's had so much trouble understanding The Plan.

Every iPhone and iTouch is essentially a very compact OS X computer. It is no longer valid to point to iMac sales and distinguish them from Apple "computer" sales!

What Steve & Company has done is to get a Mac into some 10 million hands, who think they don't yet own one. The App Store isn't selling phone accessories... it is selling OS X programs.

So tomorrow's numbers don't exclude iPhone sales, they exclude an entire line of Apple computers... Press On Steve; a hundred years from now they will be telling their kids how you ended up owning the market.

I agree with this, mostly. Some still view Mac as the hardware; some view it as the software. Some see it as the entire package. Regardless, it's interesting to see the Mac (OS X) haters, who still think Windows is the best thing since swiss cheese, queue up to buy iPhones like no tomorrow.

Yes, iPhone apps are OS X apps. Minor tweaks and they'll run on the computer line of Macs - NOT Windows.

[flamejob]

Isn't this old news?

'MacRumors in "Reports about Macs" Shocker!'

[gifford]

Originally Posted by DoctorLee

Sometime in the next century the great discussion among stock analysts (assuming they aren't extinct by then) will revolve around why this generation's had so much trouble understanding The Plan.

Every iPhone and iTouch is essentially a very compact OS X computer. It is no longer valid to point to iMac sales and distinguish them from Apple "computer" sales!

What Steve & Company has done is to get a Mac into some 10 million hands, who think they don't yet own one. The App Store isn't selling phone accessories... it is selling OS X programs.

So tomorrow's numbers don't exclude iPhone sales, they exclude an entire line of Apple computers... Press On Steve; a hundred years from now they will be telling their kids how you ended up owning the market.

Absolutely totally agree. What I find hard to fathom though is how the majority of people find this concept hard to fathom!
The inevitability of the iPhone was obvious to me 10 years ago, and here we are on the the precipice of what I consider the 3rd revolution in computing, and there are still people that dont understand "the plan". The mind boggles!
To quote einstein "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former. "
The question I asked myself when OSX was still a glint in Jobs's eye, was "WHEN, computing power for small devices is sufficient enough to run a 'proper' operating system, how will ANY company compete?"

The answer to me was simple, 'they are all gonna be screwed'. Sure there was always gonna be basic OS's like symbian that take the initial lead, but much like any other technology designed to run on limited resources, it would ultimately be doomed when an established technology waltzes in.
Operating systems are not built overnight, and if your competition (aapl) have practically invented the OS, have decades head start, have lots of money, some of the best brains in the business, vision, and have an established ecosystem of 3rd party developers... How the hell is ANYONE gonna compete? Simple, they cant, and (of zero surprise to me) thats the situation we have today.

Another prime example was WML, "its the next big thing" they cried "HTML is dead", but it's lifespan existed until the previously established technology HTML took over when processing power INEVITABLY achieved the sufficient speeds.

People in general have great difficulty looking beyond the here and now, and this simple difference in perception few are blessed with is what makes Steve stand out from the majority of CEO's on the planet.

So anyway, the future of computing IS in your pocket, and YES there will become a time when many people completely replace 'traditional' computers with devices such as the iPhone.

I would give it less than 3 years until the use of desktop and laptops is considered quaint.

Technology DOES NOT stay still folks!!!!

PS: My girlfriend who is a light computer user, is already having to justify opening up the macbook when all her emails and facebook buddies are in the palm of her hand, and for many people thats 80% of computer usage.

[jmadlena]

Originally Posted by DoctorLee

Sometime in the next century the great discussion among stock analysts (assuming they aren't extinct by then) will revolve around why this generation's had so much trouble understanding The Plan...

Don't have a big comment on this, other than it reminded me of the Joker from the Dark Knight.

It's all part of the plan...

Amazing performance. Sorry to side track the conversation!

PS I have something now. I agree that an iPhone is just a smaller Mac, but I understand why they distinguish it from Macs.

[mixel]

Originally Posted by guet

On the contrary, in 10 years, many people will do exactly that. The vast majority of people use their computer for 3 things :

email
web
casual games

All of those people would be well served by a phone which just happens to be a computer, and as the market for iphones grows, I think we'll see Apple's focus shift to portables (for consumers), to the detriment of desktops (which will still be used for work). Desktops will become more of a niche for them, as they move on to the next big thing - mobile computing.

I kind of meant in the short term, ie, the things the current sales figures relate to. And handhelds will always be relatively crappy for word processing, dtp, art, viewing your photos on.. etc.

I'm not sure you're right about the "vast majority" either, I'd say word processing is pretty darn important, and a crummy peck peck onscreen keyboard isnt a suitable alternative to a real kb.

A lot of consumers may settle with phones but like the mobile certainly isnt going to replace the computer. Take into consideration in 10 years the games machines (and other Set top box like devices) will all be super-computer level by our standards and capable of web browsing and web-apps.. They'll likely do much of our TV-related stuff too. A perfect storm of multiple lifestyle devices will likely decrease the need for a dedicated "computer" for a lot of people, but that's a *long* way off, and the phone wont do 100% of the replacing, just a part of it.

[BRLawyer]

Originally Posted by deputy_doofy

Regardless, it's interesting to see the Mac (OS X) haters, who still think Windows is the best thing since swiss cheese, queue up to buy iPhones like no tomorrow.

Yes, iPhone apps are OS X apps. Minor tweaks and they'll run on the computer line of Macs - NOT Windows.

Absolutely correct, but...

Are there any that still think that Windows is better than a Mac and OS X? Apart from the obvious inertial effect of having been imposed Windows for ages, this is truly amazing...

And speaking of convergence, I am just packing some stuff for a business trip while listening to my iTunes downstairs, wirelessly via AppleTV and AirTunes (no AppleTV sync or stream)...an amazing example!

[xenotaku]

apple still makes computers? News to me. Thought they just made crappy web apps, phones, and mp3 players.

[ditzy]

I love my new iPhone, I really do, even though it hasn't made it onto my list of apple products yet. Something I will be reviewing after this post.
How ever the thought of replacing my iMac with this phone is enough to bring me out in a cold sweat.
It's great as a phone and does more than I could expect a phone to do. But I wouldn't even dream of writing a document on it.
The screen is tiny perfectly adequate for a phone but as a computer it's appalling.
If I think of the iPhone as a phone (and to be fair the clue is in the name) it is amazing. If I think of it as a computer I wouldn't have bought it, the processor's awful, I don't even know how much RAM it has. I can't play full tilt poker on it. (Though would be surprised if they created an app soon) Can't plug a printer into it. Can't play sims.
In short it is the best phone I've ever owned, but if indeed it is actually a computer it is just about the worst that i have ever owned.

[Bubba Satori]

Originally Posted by peterdevries

I don't agree. It's very apparent that Apple is moving slowly out of the boundaries of the computerbusiness with Apple TV and iPhone towards a combined home computing / businesscomputing / entertainment combination. With the introduction of Airtunes some time ago and the remote control function of the iPhone, it is clear that Apple is determinedly converging technologies towards a single user experience.

More and more Apple products generate extra value when used together, as opposed to buying and using them as a single product. Example: Time Capsule as a backup solution and network hub, iPhone as an Ipod, Telephone AND remote for your Apple TV / Mac.

The products Apple makes are increasingly becoming excellent products standalone (they were already) that are puzzlepieces which connect to other products and enhance the experience. This makes the HALO effect much more effective and pronounced than before: Where it used to be: "this iPod is cool and works great, lets take a look at a Mac", it is now changing into: "this iPhone is great, and if I buy the AppleTV and a Mac I can stream movies, listen to music and control everything, while I can transfer all my contacts, appointments from my Mac to my iPhone".

Apple products are increasingly becoming more value as a collection that just the sum of its parts.. Good thinking..

Other companies are doing the same, but from a different position. Look at Logitech with the squeezebox and of course Sony Playstation etc. I consider Apple to come from the strongest position.

Excellent analysis. Thanks. I just wish Apple didn't have so many gaping holes in their computer line up with so many unfulfilled, and or, non up dated market segments. Mini, ACD, headless Mac, tablet, out of date video dards.

[kornyboy]

Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_0 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5A347 Safari/525.20)

I think it will be very interesting to see financial results that don't include iPhone sales. I think it willgive a good picture of the health of the company in the other markets.

[kenichiwat]

do you think apple will announce the new macbook and macbook pro update with the financial report?! i hope so!!

im being hopeful... lol

[chocolate]

To the Doctor,

Excellent article in the NY Times.

[peterdevries]

Originally Posted by Bubba Satori

Excellent analysis. Thanks. I just wish Apple didn't have so many gaping holes in their computer line up with so many unfulfilled, and or, non up dated market segments. Mini, ACD, headless Mac, tablet, out of date video dards.

Don't know if the first part of your reply was meant cynical, however I agree totally with you. The computer line up is not uptodate. I was even surprised to see that the London Apple Store doesn't have the Mac Mini on display anymore...

Now the new iPhone is there and Apple TV just having been updated, I hope Apple will shift focus back to the computer hardware, and bring it up to spec.

[andys2i]

I am already down 2K on my apple investment and as I lamented in a recent post, I wish I had the bought the stock this week, rather than before the iPhone. Anyway, I will wait and see if my paper losses grow or disappear today.. Hopefully they beat the streets views and give strong guidance. Also, Steve Jobs health is still a cause for concern.