Apple's first quarter fires on all cylinders
Published: 23 Jan 2008 13:27 GMT
Apple's first quarter fired on all cylinders, as the company continued its financial run on the strength of its Mac business.
On Tuesday the company posted revenue of $9.6bn for its first fiscal quarter, which ended on 29 December. This was better than the $9.5bn expected by financial analysts, and Apple also gave them good news with an earnings-per-share of $1.76, which was better than expectations of $1.62 per share. That translates to a net income of $1.6bn, up 58 percent from last year.
Sales of Macs were up 44 percent compared with last year, as Apple continued its resurgence in personal computers. But sales of 22.1 million iPods were well below Wall Street expectations of 24.7 million. That is just five percent unit growth compared with last year, but iPod revenue was up 17 percent, suggesting that Apple sold more high-end iPod Touches than iPod Nanos or Shuffles during the quarter.
Apple gained iPod share internationally, but iPod units sales in the US were flat, said Tim Cook, Apple's chief operating officer.
While not specifically addressing the missed Wall Street target for iPod unit sales, Cook did say that iPod unit sales met the company's own expectations. And the iPod Touch is off to a good start, he said, which accounted for overall iPod revenue growth that matched last year's first-quarter revenue growth.
"This was the most expensive iPod we've introduced in some time," said Peter Oppenheimer, Apple's chief financial officer. According to Apple, the iPod Touch belongs in a different category from the broader music-player market. Oppenheimer claimed the iPod Touch has a chance to "become the first mainstream mobile Wi-Fi platform".
On the Mac front, Apple enjoyed another spectacular quarter, with Mac unit growth of 44 percent and revenue growth of 47 percent compared with last year. "The Mac business is on fire," Cook said, noting that the increases were led primarily by the new iMac desktops Apple introduced last August.
Apple estimates that 19 percent of the Mac-installed base is running Leopard, Mac OS X 10.5, and Leopard generated $170m in revenue for Apple during the first quarter it went on sale, compared with the $100m that Tiger, Mac OS X 10.4, generated for Apple in 2005.
Chief executive Steve Jobs already tipped the company's hand on iPhone shipments at Macworld, noting in his keynote speech that Apple had sold four million iPhones since its launch last year. Apple sold 2.3 million iPhones during its first quarter, and Cook reiterated Apple's goal of shipping 10 million units during 2008.
Apple sold 504,000 Macs through its own retail stores, up 64 percent from last year's first quarter and, like last quarter, 50 percent of those buyers were new to the Mac, Cook said.
Credit: Apple posts nice Q1, but pessimistic on Q2 from CNET News.com
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