Apple Reports $1.21 Billion Profit for Q2 2009

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Great Quarter Apple!

The real test is going to be the 3rd quarter back to school and Holiday sales this year.

Let's see if parent's pony up the money for a nice Macbook now that their 529 accounts are worth about 30% less than they used to be.

The recession hasn't kicked into full swing yet. A bunch of the folks that got laid off are still collecting severance and unemployment. It usually takes about 6-9 months before that runs out.

There's a reason the market isn't recovering very quickly. The credit card crisis is still looming and forclosures are far from stabilizing. I think the slow sales in the Pro segment may be a foreshadow of things to come. I think it will be industry wide though, not just Apple.

Let's hope that the iPhone / Ipod's carry them through so they can come out stronger on the other end.

There investment in R&D and advertising has been well spent. The Retail store sales still look very strong too.

 

[jav6454]

USB flash drives are known as Zip drives at work. Jump drives if I'm lucky.

I get blank stares once more attempting to explain or inform the majority of people about computer hardware. We're quite lucky to have the knowledge that we do.

Brace yourself.

Don't forget about the iBook G3 logicboards, capacitors, PowerBook G4 LCDs, batteries, and iMac video RAM. Let us not forget the suddenly recalled software updates either.

Edit: I remembered more.

Titanium G4 hinges, cracking Macbook upper cases, razor sharp Macbook Airs, and Macbook Air hinges.

Like I said, when they do screw up... well, people bitch and they fix it before its too late.

Thus far, Apple is known for actually listening to the customer, in some cases

 

[Eidorian]

Like I said, when they do screw up... well, people bitch and they fix it before its too late.

Thus far, Apple is known for actually listening to the customer, in some cases

I managed to remember more screw ups too.

Some of these have class action lawsuits.

 

[Goona]

I am living with it. Personally I'd like to see their market share go up to at least 25%, since this would turn the boys in Redmond from complacent to frantic. Again, in case you missed it: I want Apple's marketshare to skyrocket. Tougher competition, more effort, better products from both sides. But it's not going to happen as long as Apple are busy racking their brains trying to come up with ways to boost the profit margins on what they already have by raising prices and cutting corners at the same time.

Look I don't think Apple can even get past 15 percent marketshare worldwide withut changing ther whole business model when it comes to Macs. Apple is one company selling their OS with their computers. Microsoft on the other hand has a plethora of PC vendors from HP to Dell to Acer to Asus, and may others who license Windows. Apple is not delusional, they know they cannot overtake Microsoft's marketshare, doesn't mean they can't earn money even if they don't have Microsoft's marketshare.

I can't even think of a market where a company has such marketshare, the only company even chalenging Microsoft on the OS front is Apple, Linux is largely irrelevant, the PC vendors don't want to push it. So esentially the only competitor Microsoft has is Apple. Where are the other companies that are supposed to be giving competition to Microsoft? Apple is the only company left still offering their computers with their own OS for consumers.

Funny thing is when there is more competition, Microsoft doesn't develop that kind of marketshare. They couldn't leverage their Microsoft marketshare in the mobile world where there are more competitors. Ditto for their other business ventures.

 

[jav6454]

I managed to remember more screw ups too.

Some of these have class action lawsuits.

Batteries anyone?

 

[bruinsrme]

PS4 - MS will have a 1 year lead on them with their next console and with the sucess of Xbox360 relative to the Xbox, sony will be nowhere. again integration of a system. more devices wih the Sony name will provide the use with a straight forward interface.

Vaio - It's a PC. enough said. narow minded, sorry. Far more windows users outh there. Remember its about intergration not individual components

TVs - overpriced and MBPs aren't.. This is where price points come in. The 46" bravia was one of the best selling screen outh there. I dislike sony TVs (just biased) but they have high quality glass and excellent pictures with a 5 to 10% premeium.

Hometheater: Sony is like Bose. All marketing. not talking the HT in a box crap. Their AVRs are affordable and deliver the appropriate quality at the price marks. Bose consoles and speakers are good for some. The AVR will come back as a media controller interface to control the interface. heck my pioneer streams music, ipod control, pulls music from the network computers and so on.
movies and music - all going down sony owns a lo of the rights to movies and music. how is it going down. Apple will continue payig for the content being downloaded in teir store, Sony scan ditribute the files through their store and other making coin from both venues

When was the last time sony released anything innovative? most of these technilogies are develped and distributed through consortiums. it will be the company that can tie this all together that will be the big winner. sony has most of the toys in their wide array of products. Now it is time to start tieing them together.

Bose is an excellent product concept, not an excellent product in my eyes. They shunned the newer digital formats andgave the customer what they thought they would need through innovative products, simple interface and "one button control". today other brands offer far more at the same price points. Computer interface with the entertainment system is already here and is makes the user experience easier with simple menus and touch displays.

 

[NT1440]

Batteries anyone?

There was a problem with the batteries at some point?

Enlighten me, Ive only been in on the Apple loop for less than a year (check the join date lol).

 

[DELLsFan]

May I quote Tina Fey:

Suck it, haters.

That includes all the lame Apple-bashing trolls that have infested these forums as of late.

I'm glad I'm not a lame, Apple-bashing troll. It's too bad criticism too often becomes confused with trolling. Is Apple really so infallible, so perfect that it can never be questioned, never accept input, and must never fail? Does this remind anyone of a certain someone living in Washington D.C.?

You must have not fully read the original statement ... (by Anuba) he said "I also have a feeling that they spend ludicrous amounts on advertising".

Starting a statement with "I have a feeling ..." implies that (a) its your personal, non-factual opinion and (b) you don't have any evidence whatsoever, just a feeling.

So are you just mad that he's posting his gut feelings, while clearly stating that's all they are?

Apple should spend a lot of money on advertising, it would be remiss of them not to - as long as the R&D takes the bigger chunk...

Agreed. As for Anuba and his opinions, I suspect he is able to wash the dust off of his feet quite nicely - having tread in so much of it around here. There's room for point and counterpoint here - even among Apple enthusiasts. I wish some people would just relax and share, instead of flame and berate.

I hope this puts to rest the market share issue. APPLE DOES NOT CARE.

Yes they do. They just care MORE about their margins. Rule 1: Margins and return to shareholders first. All other rules refer to Rule 1.

Ah. Does that mean they'll stop running ads that target the competition's market share now? I could've sworn that the incessant namedropping of "Vista" had something to do with trying to steal some of the PC's marketshare, but I must have been imagining things.

Seriously. Have you never seen a keynote address where Steve Jobs marvels over the iPod's enormous market share? They're all about market share when it's big, but they pretend to be too cool to care when it's not.

As do many other folks here. It's clear the iPod and iPhone are the main reasons why profit is up last quarter. Great job, Cupertino! Keep up the good work. I hope the Mac sales pick up soon.

And yet Dell is still being kept alive by Apple users buying their inferior monitors instead of the superior Apple ones.

:::raising hand::: I'm one of these folks. I hope I was reading sarcasm ... I rather fancy my 24" DELL 2408WFP, thank you very much! It was a quality purchase at a no-brainer price compared to Cinema Display pricing. Apple display prices make the baby Jesus cry.

Apple do care about market share, but they care about profit much more. If having a higher market-share would mean smaller margins, I believe they would go for bigger margins with less market share.

I couldn't have said this any better. I really wish they cared more about the market share. There are millions of PC users who just don't get it - and never will - mainly because of MS' entrenchment in the business markets, but also because Apple doesn't seem interested in a wider cross-section of computer consumers. It's wasted opportunity, potential business AND profit, it seems to me.

I think the MacBook and iMac will continue to be outstanding products even if Apple lowered prices slightly. I think there could come a quarter when eventually the iPhone and iPod sales won't be responsible for the lion's share of profit at Apple. I just fear some of the schmagoolies around here may be proven right ... and Apple "doesn't care" ... and then what happens? Will Mac sales have picked up the slack when that day comes?

 

[Anuba]

Batteries anyone?

The funniest one I can remember was the fan on some PowerMac G4 model (the one with mirror doors, "Quicksilver" or whatever they called it). I'm not sure if it ever came to a lawsuit, but the fan was so ridiculously loud that some guy decided to dedicate a site to it (the now retired g4noise.com). He had a QuickTime movie up there that was hysterical... the second he hit the power switch the fan revved up to a deafening roar, you could barely hear him shouting over the noise.

IIRC, Apple ended up offering replacement power supplies to the victims of the fan from hell...

 

[jav6454]

There was a problem with the batteries at some point?

Enlighten me, Ive only been in on the Apple loop for less than a year (check the join date lol).

Apple had problem with batteries in the past and even started a swap for certain type of batteries that were deemed not to standards.

Which translates to consumer words as, very defective and possible blow-ups.

The funniest one I can remember was the fan on some PowerMac G4 model (the one with mirror doors, "Quicksilver" or whatever they called it). I'm not sure if it ever came to a lawsuit, but the fan was so ridiculously loud that some guy decided to dedicate a site to it (the now retired g4noise.com). He had a QuickTime movie up there that was hysterical... the second he hit the power switch the fan revved up to a deafening roar, you could barely hear him shouting over the noise.

IIRC, Apple ended up offering replacement power supplies to the victims of the fan from hell...

This also

 

[BMWFan]

:::raising hand::: I'm one of these folks. I hope I was reading sarcasm ... I rather fancy my 24" DELL 2408WFP, thank you very much! It was a quality purchase at a no-brainer price compared to Cinema Display pricing. Apple display prices make the baby Jesus cry.

Only poor people with limited budgets buy Dell PCs or Dell monitors. People who buy Apple have enough funds to buy superior Apple displays. The extra premium is well worth the build quality and customer service.

 

[NT1440]

The funniest one I can remember was the fan on some PowerMac G4 model (the one with mirror doors, "Quicksilver" or whatever they called it). I'm not sure if it ever came to a lawsuit, but the fan was so ridiculously loud that some guy decided to dedicate a site to it (the now retired g4noise.com). He had a QuickTime movie up there that was hysterical... the second he hit the power switch the fan revved up to a deafening roar, you could barely hear him shouting over the noise.

IIRC, Apple ended up offering replacement power supplies to the victims of the fan from hell...

Wow, thats actually pretty funny

 

[DELLsFan]

Only poor people with limited budgets buy Dell PCs or Dell monitors. People who buy Apple have enough funds to buy superior Apple displays. The extra premium is well worth the build quality and customer service.

I guess that wasn't sarcasm after all.

The service I'll grant you ... maybe ... but really ... how much service is needed for a display? If it's going to fail ... it'll fail within the manufacturer's warranty period, in my experience.

I'm very interested in hearing what is so vastly superior about Apple displays (over others) to justify the premium pricing.

 

[BMWFan]

I guess that wasn't sarcasm after all.

The service I'll grant you ... maybe ... but really ... how much service is needed for a display? If it's going to fail ... it'll fail within the manufacturer's warranty period, in my experience.

I'm very interested in hearing what is so vastly superior about Apple displays (over others) to justify the premium pricing.

lol na, i was just making fun out of all the fanboys who bashed Lauren from the MS commercial because she chose to buy a PC when clearly there wasn't a mac with a the specs she was looking for within her budget. just like how even mac users like you have to resort to a PC manufacturers display because the Mac manufacturer doesn't have the display with specs he's looking for within his budget. Even Apple users have budgets.

 

[Speedy2]

Apple = 2% on advertising
HP = 0.4% on advertising
Dell = 1.2% on advertising

Again: Apple spends more on ads than the other players do.

(Correct number for Apple: about 1.5% in FY 2008)


Funny. In your comment you say correctly that Apple has to combat MS and all the PC makers with their adverts. Still you leave out MS in your list, which happens to spend more on advertising than Apple (2% vs 1.5% according to that very informative link that was posted before).

So where exactly does this leave your conclusion? In the dust.

Anyway, this is a sideshow. Your initial statement implied that these Mac adverts were oh so expensive and that all Mac buyers paid a substantial premium because of them. Turns out they are not so expensive and only 1.5% of the revenue goes to advertising (with a clear tendency of decreasing).

 

[Anuba]

Only poor people with limited budgets buy Dell PCs or Dell monitors. People who buy Apple have enough funds to buy superior Apple displays. The extra premium is well worth the build quality and customer service.

I'm not sure if you're serious or ironic, but I'm leaning toward the latter.

The Dell 3007WFP and the Cinema 30" both used displays by LG, but Dell used a later generation with a wider viewing angle and higher contrast. I have a 3007WFP sitting on my desk, it was built in Europe and the build quality is nothing short of flawless. I have the funds, but why would I buy an inferior product at a higher price? "I'm rich, but I'm not retarded."

In your comment you say correctly that Apple has to combat MS and all the PC makers with their adverts. Still you leave out MS in your list, which happens to spend more on advertising than Apple (2% vs 1.5% according to that very informative link that was posted before).

I'm sure Microsoft pays truckloads on advertising but what does that amount to when I buy a PC from HP with an OEM license of Windows attached? Pocket change.

 

[Speedy2]

We've been hearing this for years.

Yeah, because it's the truth. Sony hasn't had a hit for ages. They are struggling, posted losses, laid off people. They will be hit hard by the failing economy since they don't have the products for which people would pay a premium.
They could be a real Apple contender, keeping them on the toes. But they're not, unfortunately.

 

[Speedy2]

I'm sure Microsoft pays truckloads on advertising but what does that amount to when I buy a PC from HP with an OEM license of Windows attached? Pocket change.

If you had chosen Dell instead of HP you would find out that you pay roughly the same amount for marketing money for a Dell PC with Windows and a Mac, give or take a few percent. Not enough for any kind of rushed conclusion like yours.

HP is not a very good comparison, since they are not only a PC maker but also have a massive business services arm (like IBM). I'm pretty sure most advertising money is spent for consumer products, which is why HP spends less in comparison to Apple.

 

[gnasher729]

There was a problem with the batteries at some point?

Enlighten me, Ive only been in on the Apple loop for less than a year (check the join date lol).

Two or three years ago, _everybody_ had huge problems with batteries. Sony was hit badly, because they were selling these batteries to others and had to pay for it all. The reason for the problem (details may be wrong): It is a known problem with these batteries that with use, some metal particles dissolve and will eventually cause shorts and fires. And the problem has obviously been solved by adding something to the battery that catches these loose particles. So everything is fine until some bastards decide that they can save one dollar per battery by leaving that bit out. And the way batteries are built, it is impossible to detect this in testing until the battery explodes. So some unscrupulous manufacturer caused hundreds of millions of dollars in damages (if you type "china milk melamine" into Google you will find how these things happen).

Something similar happened two years earlier with capacitors; the whole industry was damaged (including Apple) by exploding capacitors; in that case it seems plans for building capacitors were stolen with a few details missing; the missing details were needed to make the capacitors work for longer than a year.

 

[NT1440]

Two or three years ago, _everybody_ had huge problems with batteries. Sony was hit badly, because they were selling these batteries to others and had to pay for it all. The reason for the problem (details may be wrong): It is a known problem with these batteries that with use, some metal particles dissolve and will eventually cause shorts and fires. And the problem has obviously been solved by adding something to the battery that catches these loose particles. So everything is fine until some bastards decide that they can save one dollar per battery by leaving that bit out. And the way batteries are built, it is impossible to detect this in testing until the battery explodes. So some unscrupulous manufacturer caused hundreds of millions of dollars in damages (if you type "china milk melamine" into Google you will find how these things happen).

Something similar happened two years earlier with capacitors; the whole industry was damaged (including Apple) by exploding capacitors; in that case it seems plans for building capacitors were stolen with a few details missing; the missing details were needed to make the capacitors work for longer than a year.

Thanks for the industry history lesson. Who were the people responsible for these two incidents? I'd assume a massive legal action was taken against them?

 

[Anuba]

If you had chosen Dell instead of HP you would find out that you pay roughly the same amount for marketing money for a Dell PC with Windows and a Mac, give or take a few percent. Not enough for any kind of rushed conclusion like yours.

HP is not a very good comparison, since they are not only a PC maker but also have a massive business services arm (like IBM). I'm pretty sure most advertising money is spent for consumer products, which is why HP spends less in comparison to Apple.

Whatever - the actual purpose of attempting a teardown of the costs was to address a claim that Apple's margins are "obscene" and that they could easily cut their prices by 20% across the board. But, fine, it's not the advertising, or salaries, or R&D, or anything really, so back we go to square one: It's just plain money gorging, and they might as well cut prices by 20%. Happy?

Two or three years ago, _everybody_ had huge problems with batteries. Sony was hit badly, because they were selling these batteries to others and had to pay for it all. The reason for the problem (details may be wrong): It is a known problem with these batteries that with use, some metal particles dissolve and will eventually cause shorts and fires. And the problem has obviously been solved by adding something to the battery that catches these loose particles. So everything is fine until some bastards decide that they can save one dollar per battery by leaving that bit out. And the way batteries are built, it is impossible to detect this in testing until the battery explodes. So some unscrupulous manufacturer caused hundreds of millions of dollars in damages (if you type "china milk melamine" into Google you will find how these things happen).

Something similar happened two years earlier with capacitors; the whole industry was damaged (including Apple) by exploding capacitors; in that case it seems plans for building capacitors were stolen with a few details missing; the missing details were needed to make the capacitors work for longer than a year.

Microsoft had an issue with the power cord for the original XBox, it got smoking hot and was found to have the potential to cause fires. I'm not sure there ever were any fires but either way, they had to send new power cables to millions of customers.

Car manufacturers have similar issues all the time. Just yesterday Volvo announced that they'd be recalling 23,000 cars due to some faulty wiring that had caused half a dozen cars to spontaneously burst into flames.

 

[rtdunham]

cash

didn't applehave more than $29B cash reserves in the past? since they haven't bought any big ticket items that we know about, does this give a chance to evaluate how apple's done at investing that cash?

 

[gnasher729]

Probably busy in R&D at the time. I mean, there must have been a good reason for Sony to fall behind in this respect

Sony fell behind because the company has two parts: The music business, and the electronics business. And the music business was so keen on selling music with DRM and forced that on their own electronics business so they would fall behind.

MiniDisc was great when it came out, much much better than tape recorders, which was the alternative at that time. And their music business destroyed it. Their music business stopped the electronics business from producing anything that Apple produced. If you compare how much money Apple makes selling iPods, and how much Sony makes selling music, the right decision for Sony would have been to make MP3 players without any copy protection, and give buyers access to the whole Sony music catalogue for free.

 

[Goona]

Two or three years ago, _everybody_ had huge problems with batteries. Sony was hit badly, because they were selling these batteries to others and had to pay for it all. The reason for the problem (details may be wrong): It is a known problem with these batteries that with use, some metal particles dissolve and will eventually cause shorts and fires. And the problem has obviously been solved by adding something to the battery that catches these loose particles. So everything is fine until some bastards decide that they can save one dollar per battery by leaving that bit out. And the way batteries are built, it is impossible to detect this in testing until the battery explodes. So some unscrupulous manufacturer caused hundreds of millions of dollars in damages (if you type "china milk melamine" into Google you will find how these things happen).

Something similar happened two years earlier with capacitors; the whole industry was damaged (including Apple) by exploding capacitors; in that case it seems plans for building capacitors were stolen with a few details missing; the missing details were needed to make the capacitors work for longer than a year.

I remember those batteries, I had one in this Dell laptop I had.

 

[Goona]

didn't applehave more than $29B cash reserves in the past? since they haven't bought any big ticket items that we know about, does this give a chance to evaluate how apple's done at investing that cash?

They had 28 billion last quarter.