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This despite the expected summer sales surge, the iPhone release, which if nothing else will result in front-loaded sales as early adopters clamor for initial limited supplies.

Q3 is the April-June quarter, so it's not really the big summer quarter. iPhone isn't coming out until the absolute end of the quarter, and they're not getting a Leopard launch in the quarter.

Not really a surprise that they're guiding down at this point.
 
"..and are also hard at work on some other amazing new products in our pipeline"

It's becoming a very long pipeline :(

stop your doom and gloom. apple is releasing products faster and more consistently than any time in their history. so leopard is going to be a couple of months late, and ?tv shipped a few weeks after they said, big deal. they've pretty much released at least one new/significantly updated product every month since july of last year.
 
They just announced a new NYC store that will be in the Meat Packing District. WOW 3 apple stores in NYC is pretty amazing.
...
Now they are talkin about iPhone + Apple TV Strategy
...
New Software features for AppleTV.
...
New software and new features included in the iPhone. No additional charge as they become available. Will use subscription accounting. Big BIG BIG deal.
 
They further lowered future expectations by saying:

Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”

This despite the expected summer sales surge, the iPhone release, which if nothing else will result in front-loaded sales as early adopters clamor for initial limited supplies.

This is classic UPOD, but might be more extreme than usual in this case.

I endorse a stock split.

Rocketman

Apple should at least cough up a dividend.

I don't think they've made a dividend payment to shareholders in recent history. Now with profits like these and billions in cash reserves, it's about time.
 
Unique subscription based (accounting) recognition of iPhone sales on a straight-line basis over 24 months. Allows Apple to provide FREE software upgrades over time to existing iPhone owners.

Earnings on service fees to be recognized on an "as earned" basis.

The odd thing about this will be a "rolling recognition" of iPhone related revenues thus smoothing earnings recognition.

Rocketman

Added note they will ALSO account for AppleTV sales on a straight line basis and will be adding substantial FREE updates to that device as well.
 
Unique subscription based regognition of iPhone sales on a straight-line basis over 24 months. Allows Apple to provide FREE software upgrades over time to existing iPhone owners.

Earnings on service fees to be recognized on an "as earned" basis.

The odd thing about this will be a "rolling recognition" of iPhone related revenues thus smoothing earnings recognition.

Rocketman

People need to realize this is a big deal. Apple got burned with the wireless N upgrade because of the accounting issues related to issuing new functionality on products whose revenue had already been fully realized. With this subscription model, it allows Apple to add new functionality without needing to charge for them. These will be "material" updates to iPhone. New Applications and new features over the life of the phone. THIS IS SO AMAZING.
 
People need to realize this is a big deal. Apple got burned with the wireless N upgrade because of the accounting issues related to issuing new functionality on products whose revenue had already been fully realized. With this subscription model, it allows Apple to add new functionality without needing to charge for them. These will be "material" updates to iPhone. New Applications and new features over the life of the phone. THIS IS SO AMAZING.


Correct. Apple Tablet Nano. iPhone is merely ONE app on an otherwise revolutionary device. Warning to competitors. The 2008 wimax release will REPLACE most urban cellphones.

There's a forward looking statement :)

Rocketman
 
Can someone better explain this subscription thing I keep hearing about? I jumped into the conference call late and I keep hearing it but would like to know more. Is this a free subscription included with the phone when you buy it? etc
 
Can someone better explain this subscription thing I keep hearing about? I jumped into the conference call late and I keep hearing it but would like to know more. Is this a free subscription included with the phone when you buy it? etc

No. It has nothing to due with your subscription with AT&T. It has to do with Apple's Internal finnacial accounting practices. It allows apple to issue MAJOR updates to their products without getting major fines from the SEC.
 
Now they are talkin about iPhone + Apple TV Strategy

iPhone as a remote? Or better, Remote Desktop into my Mac from my iPhone?? Oh, man...

I'm glad to hear about those additional features at no extra charge. Like the Wii. I wonder, having an OS, it would be conceivable that they would charge for an iPhone OS update when 10.6 rolls out. But the iPod updates are free and hopefully whatever enhancements surface will be categorized as those "additional features."
 
I thought Vista was supposed to be "chipping away" at OS X marketshare. At least that's what somebody on the "Leopard delayed" thread was trying to tell me. What happened to that? ;)

--Eric
 
No. It has nothing to due with your subscription with AT&T. It has to do with Apple's Internal finnacial accounting practices. It allows apple to issue MAJOR updates to their products without getting major fines from the SEC.

I'm sorry, I wasn't clear; by subscription, I did not mean AT&T. I was just worried that Apple was going to charge us for a subscription to something in addition to the hardware. So, if I understand you correctly, this is merely bookkeeping jargon/semantics to allow Apple to roll out updates without having to charge the customer, right?
 
The other really cool part about all of this has to do with my solid belief that Apple has decided to keep the iPhone extremely tight. If you buy an iPhone at launch that phone will continue to be updated and will last more than 2 years since they are accounting for it over a 24 month period. This means you will not be screwed by buying an iPhone in the begining. The iPhone hardware is advanced enough to handle the new software apple will want to ship, and when 3G and more memory is added in new models the form factor will remain the same, and as new features are added the entire line will see the benefits. Unlike the iPod where 3g iPods cannot play the games or some of the other new iPod OS features.

I'm sorry, I wasn't clear; by subscription, I did not mean AT&T. So, if I understand you correctly, this is merely bookkeeping jargon/semantics to allow Apple to roll out updates without having to charge the customer, right?

Yep. Exactly
 
If what you say is true, i can't wait to see what the other Qs show :D

I've been looking at Apple Hardware sales all day as part of my dissertation (due Friday :eek: ) and Q2 is traditionally the weakest, from Q3 2000 to Q1 2007 the cumulative sales per quarter are as follows:

6,883,000 Q1
5,206,000 Q2
6,807,000 Q3
7,175,000 Q4

Meaning the average hardware unit sales per Q (until today) were:

983286 Q1
867667 Q2
972429 Q3
1025000 Q4

So that means Apple exceeded thier average for the last 7 years!
 
The 35% margins are also due to the fact that the iPod and Mac lines have not been updated with new components in a long time allowing for Apple to squeeze more profits out of the hardware as the cost to Apple falls. They guided that margins will return to the average high 20's soon. This indicates that updates to their product line is coming which will incorporate new components which will cost more and lower margins.
 
The 35% margins are also due to the fact that the iPod and Mac lines have not been updated with new components in a long time allowing for Apple to squeeze more profits out of the hardware as the cost to Apple falls. They guided that margins will return to the average high 20's soon. This indicates that updates to their product line is coming which will incorporate new components which will cost more and lower margins.

Ah, good catch and good analysis. (And 35% is not excessive; 20% is bare bones survival, so 30% with a temporary spike looks to be healthy).
 
The 35% margins are also due to the fact that the iPod and Mac lines have not been updated with new components in a long time allowing for Apple to squeeze more profits out of the hardware as the cost to Apple falls. They guided that margins will return to the average high 20's soon. This indicates that updates to their product line is coming which will incorporate new components which will cost more and lower margins.

And/or a lower price but not likely. :(
 
Ah, good catch and good analysis. (And 35% is not excessive; 20% is bare bones survival, so 30% with a temporary spike looks to be healthy).

Let's just hope Apple doesn't sit on the sidelines with updates trying to squeeze more out of their customers with the rationale, "if they are buying them at these prices, we do not need to update the line" I think they are ready with new models with the Santa rosa chipset and will drop them as soon as they see a slight dip in sales.
 
Apple shipped 1,517,000 Macs

Really? Wow!!! That is a lot of computers. Impressive!!!:D

My money is still burning a hole in my pocket. :eek:

Come-on Santa Rosa by June... I'm ready to hit the button.
 
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