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.
"..and are also hard at work on some other amazing new products in our pipeline"
It's becoming a very long pipeline![]()
"...amazing products in our pipeline"
The day Apple doesn't say this line at one of these meetings, I will do... something...
They further lowered future expectations by saying:
Peter Oppenheimer, Apples 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
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.
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
Now they are talkin about iPhone + Apple TV Strategy
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. 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?
If what you say is true, i can't wait to see what the other Qs show![]()
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).