iPhone Accounted for 39% of Apple Revenue in Q4 2008

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Oct 22, 2008.

  1. MacRumors macrumors bot


    Apr 12, 2001

    During yesterday's conference call, Apple revealed that iPhone was responsible for 39% of the company's revenues in Q4 2008. Due to Apple's decision to report iPhone earnings as subscription revenue over 24 months, however, these numbers are not reflected in the $1.14 billion net profit and $7.9 billion in revenue reported yesterday. If they had been included, this would represent an additional $3.8 billion in revenue and an additional $1.3 billion in net income.

    As noted by many, the size of this number is remarkable for a product that has been on the market for only 15 months. Steve Jobs highlighted the significance of the numbers by putting Apple's iPhone sales into perspective:

    - Apple sold more iPhones than RIM sold Blackberries in Q4 2008
    - In terms of revenue, Apple is now #3 amongst mobile phone vendors behind Nokia and Samsung and beating out Sony Ericsson which falls at #4.

    When questioned about Apple's plans for the future in face of increasing iPhone competition, Jobs suggested that they would continue to aggressively price the iPhone and make ongoing improvements:

    Article Link: iPhone Accounted for 39% of Apple Revenue in Q4 2008
  2. TheSlush macrumors 6502a


    Mar 28, 2007
    New York, NY
    More than I thought. The Mac people aren't going to like this! :)
  3. (L) macrumors 6502

    Nov 12, 2005
    Wow. I had no idea they were that popular -- I'm curious how many people got the 3G one even after buying the first one.
  4. shanmugam macrumors 68020


    Sep 24, 2008
    Blazer town!
    $25 billion on cash and save $20 on the firewire :eek:

    run and hide ...

    --disgruntled apple fanboy
  5. mainstreetmark macrumors 68020


    May 7, 2003
    Saint Augustine, FL
    I once had a single type of product account for 40% of my sales income, but then I only sold 2 of them.
  6. kavika411 macrumors 6502a


    Jan 8, 2006
    One Basket, meet Too Many Eggs. Too Many Eggs, meet One Basket.
  7. pismodude2 macrumors 6502a


    Jan 22, 2008
  8. SFgadgetman macrumors member

    Mar 19, 2008
    Bay Area, CA
    "price umbrella" ella ella

    Can anyone explain what a price umbrella is?
  9. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA
    I think you can look at this at least two different ways...

    From the main MR article on the quarterly earnings report:

    One way to look at this is to say that, as three "legs of the stool," the iPhone had explosive growth and the iPod had slightly better than saturation-market growth, while the Macs did somewhere in between -- the Mac revenue growth number would put Apple at pretty much best-in-class among computer OEMs for growth even without the iPhone sales. From this perspective, the Macs are doing fine, but there is the danger that, should iPhone sales ultimately tank, Apple will at some point have big year-over-year drops in gross and net revenue even if they continue to grow their Mac sales. But as long as that doesn't happen, it isn't such a big deal, and temporary fluctuations in overall revenues are thankfully smoothed significantly by amortizing the iPhone revenue over a period of time.

    Another way to look at it is that, if Apple can sustain this pace of iPhone sales, that once a full year cycle of selling iPhones this fast and hard finishes, the iPhone will represent a huge portion of their revenues both in the sense of actual collections and on their quarterly earnings sheet. From that perspective, there is always the danger of market pressure for Apple to dump its resources into the high growth areas and starve off Mac development, although recently they've been showing at least some principled aversion to this.

    In the long run, I'm really curious to see how this will play out. While there have been phones this popular before, I don't know that there have been many times like this when a single phone held one of the top three company market shares in the phone industry. That's the astonishing part. Just the one iPhone, that only comes in a couple of capacity and color variants, is going toe-to-toe with the entire lineups of Samsung and S-E. I bet that's going to generate even more pressure for Apple to expand the iPhone into a range of mobile devices... or else defend why they believe they can sustain such a large fraction of the market on just one form factor. I wonder what will happen with that.
  10. Rybold macrumors 6502a


    Jun 23, 2008
    California, USA
    WHOA !!!! This means the profit increase of 26% does not include the iPhone! It's from Mac and iPod sales. The iPhone Billions are even more on top of that! WHOA !!!

    Attached Files:

  11. shanmugam macrumors 68020


    Sep 24, 2008
    Blazer town!
    if mobile devices (iPod, iPhone) really making apple rich why not create a netbook?

    stripped down netbook for $500 will make profit and make halo effect more

    - it is my opinion.

    [We know if apple makes netbook, it will beat everyothers netbooks hands down]
  12. gnasher729 macrumors P6


    Nov 25, 2005
    If you sell a product at a price that is too high, it allows and encourages competitors to come up with competing products that may not be quite as good, but almost as good, and cheaper, and take away your sales. That is called a "price umbrella": Your competitors are protected by your own high price. But if the price is low enough, competitors won't even try to undercut you with a cheaper product.
  13. mac.life macrumors newbie

    Mar 16, 2007
    Can you say iPhone Nano ?!?

    Can you say iPhone Nano!

    Of course it's in development!!

    Hope all those other electronics companies that have been pushing bad phones on us for years go under and get theirs....
  14. Rybold macrumors 6502a


    Jun 23, 2008
    California, USA
    Netbook aside (which I totally agree with), Hewlett Packard has commercials on TV right now that they have a new touch-screen PC. Looks like Apple is no going to be able to be a first-to-market for touch-screen PCs. Good Job, Steve! You should have introduced the touch-screen PC months ago!!!
    - it is my opinion.
  15. daveL macrumors 68020


    Jun 18, 2003

    Arn, the revenue was $7.9 B, not $6.22 B, which was for the year ago period.
  16. Super Geek macrumors newbie

    Mar 26, 2008
    Apple is not about being first at doing something it's about being the first to do it right.

    Have you ever used an HP touchscreen PC, I have, they're horrendous, vista is not a touch based UI, neither is OS X, hence no touch screen.

    When full OS X gets Cocoa touch and Apple develops a gesture and touch based UI (i'm thinking 10.7, but maybe it will be such a jump they'll call it OS XI) then you'll see touchscreen macs.
  17. imgonephishin macrumors regular

    Jan 3, 2003
    Patience, young grasshopper.

    Apple’s never worried about being the first to rush a product to market. That philosophy is akin to the morons who scream “FIRST!!!11!!” at the top of most forum boards. Instead, they try to be the first to implement that functionality well. They certainly weren’t first to the MP3 game and we all see how poorly that turned out. And man, smartphones, email and mobile browsing had been around for years before the iPhone so that product flopped. My point is, Apple takes a product category and does it better than anyone else, even if that means they’re not first.
  18. Xian Zhu Xuande macrumors 6502a

    Xian Zhu Xuande

    Jul 30, 2008
    Touch screen PC? They've been on the market for quite a while now... I was experimenting with one from HP at Best Buy more than a year ago. Being first to market isn't important. Being first to market and doing it right is. The touch-screen PCs I've worked with were not a pleasure to use.
  19. velocityg4 macrumors 68040


    Dec 19, 2004
    Given that you can buy standalone PCI firewire cards for $6 I would say Apple is probably saving $3-4 by not including firewire in the Macbook.

    That is surprising though that the iPhone is 39%. I guess they have no reason to add 3G to the laptops.
  20. Pants Dragon macrumors regular

    Nov 8, 2006
    I don't think you understand the distinction between putting all your eggs in one basket and making a ****ton of money from one product. It's not like they've invested the future of the company in the iPhone.(Though that would probably work anyway) Are you suggesting that making a wildly successful product is a BAD thing?
  21. CrackedButter macrumors 68040


    Jan 15, 2003
    51st State of America
    Interesting that Apple are willing to compete on price and be prepared to drop their prices in order to gain marketshare but aren't willing to do the same with the mac side of the business. Their growth could be bigger if they lowered prices instead of raising them.
  22. lowbatteries macrumors regular

    Mar 21, 2008
    I wonder what the halo effect of this is going to be. I bought my first Mac because I loved my iPod Video so much, how many of these iPhone users will buy a Mac when it comes time to replace their current machines?

    I would also like to see the numbers on how many iPod touch users are out there. The iPods have a nice, but limited UI. It's impressive, but having a iPhone or Touch with all of their awesome GUI goodness surely will make everyone want to try the full-fledged OS X.

    I think this is mainly because AT&T (and other mobile companies) are picking up the slack. Apple wouldn't sell them that cheap directly to consumers. I think he should have said "we will continue to force the wireless providers to price them competitively".
  23. zacman macrumors 6502a

    Jul 11, 2008
    I disagree. Together with OneNote 2007 it's just fantastic. I just love the handwriting recognizer and the ability to actually search audio files thanks to the built-in voice recognition system in Vista.
  24. editguy macrumors 6502

    Oct 14, 2008
    It is if they get so focused on the iPhone that they ignore everything else. At some point the iPhone will reach it's saturation market. Not everyone that wants a phone will want an iPhone. And phone buyers seem to like to change phone, and phone designs, often before they get totally bored with it. So having diversification in the products they offer will lead to long term profitability.
  25. filmguy15 macrumors member

    Dec 24, 2007
    To me, all that stuff seems like a novelty. Cool to use for the first time, but brings no real value to the computing world, and certainly won't change the way we use computers.

    I have never understood this outcry for a Mac Tablet. Sure it would be "cool" to have a giant touchscreen, but when it comes to day to day use, I feel like it would get old fast. Maybe I'm wrong, who knows...

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