(I am not a number! I am a free man!)
So, a couple of days ago, Apple released its results for the latest fiscal quarter, Q3 of 2010. And, once again, the numbers were good.
They had profits of $3.25 Billion, on revenue of $15.7 Billion; this was their best quarter ever. Take a look at that again; their best *quarter* ever, not their “best non-holiday quarter ever.”
That is to say, Q310 had higher revenue than Q110, the quarter that includes the annual spend-a-thon known as Christmas. For the past few years, Apple’s revenue has shown distinct “spikes” for the holiday quarter of each fiscal year, driven primarily by iPod sales, which (as I have noted before) make great Christmas presents. But this year, things were different. It’s also interesting to note that the last time Q1 was not Apple’s best quarter was back in fiscal 2005. Back then, their revenue for the *entire year* was $13.9 Billion, and their quarterly revenue was on the order of $3 Billion… which is what they made as *profit* this past quarter. So it may be a trite statement, but things have changed for Apple over the past 5 years, and changed in a very good way. I think, as time goes on, we will still see the spikes of the holiday quarter, but the new revenue streams of iPhone and iPad will smooth out that line, just a tad.
Breaking the numbers down a bit, we note that iPod unit sales were down slightly, reinforcing a trend that has been going on for some time. iPhone sales were also down very slightly, while CPU sales were up. This was the first quarter that Apple was selling iPads, and they did well, selling 3.2 Million of them; we’ll have to see how those numbers change over the next couple of years.
Percentage wise, iPhone represented 33.97% of their revenue, while CPUs accounted for 28.02%. Surprisingly, iPad was worth 13.8%, quite a bit higher than iPod, coming in fourth with 9.84%. This was the fourth quarter in a row that iPhone revenue was greater than CPU revenue.
A while ago, a friend of mine theorized that Apple had become more of a music company than a computer company. The numbers didn’t bear that theory out, but they do seem to support the idea that Apple has become more of a phone company than a computer company. But, if you consider the iPhone as more of a handheld, personal computer that can do phone calls, maybe not. And the iPad is more of a computer than anything else. Indeed, it may be what computers will look like more and more as time goes on. So I still think we can consider Apple a computer company, first and foremost.
This most recent financial announcement also included the final “revision” of their fiscal 2009 numbers. Using their updated accounting procedures, Q3 of 09 had $1.397 Billion more revenue than what they originally reported, putting their annual revenue at $42.905 Billion, rather than $36.537 Billion. As I noted before, this would have placed Apple in 51st placed in the Fortune 500, rather than the 56th place they actually made. Still, it’s the best Apple has ever placed on that venerated list of US Companies.
A couple of other interesting points were made during their announcement. First, Apple is forecasting revenue for the fourth quarter to be around $18 Billion. Industry analysts said this is “conservative,” as is typical for Apple (they don’t like to brag). But if they do make that number, it would push their annual revenue for 2010 to around $62 Billion. That would be a increase of 46% from 2009, and would push them to the low 30’s on the Fortune 500 list.
The other interesting point was made by Tim Cook, who said that not everything is all rosy and nice. They are having a problem at Apple… mainly in that they cannot seem to meet the demand for iPhone 4 and iPad. They can’t build them fast enough, but they are working through that as best they can. You have to admit, it’s a “good” problem for a company to have.
Finally, I have to note that Apple’s market capitalization was $231 Billion this morning, making them the second most valuable company in the US. Over the past 5 years, Apple’s stock price has increased almost 500%. Which only makes the fact that I did not buy any stock that much harder to take.
