(Parenthetical Thoughts

Well, it’s that time of year again; time to purchase my annual copy of Fortune Magazine, the one with the 2009 Fortune 500 list (Volume 161, Number 6, dated 3 May 2010, to be precise, Captain…)

I guess I’m just a sucker for numbers, statistics and analysis…

Anyway, no huge surprise at the top end of The List; Wal-Mart is once again #1, with a tad over $408 Billion in revenue. Exxon-Mobil is a bit of a distant second, with only $284 Billion… and believe me, I see the irony of using the term “only” to describe almost “three hundred billion dollars…”

There are 16 companies in the “$100 Billion Plus” club this year, with American International Group making some very impressive gains; moving from 245th spot on last year’s list to #16 this year; that’s an amazing 829% increase of gross revenue…

But, to be honest, I’m much more interested in seeing how my favourite company has done. And they did well; Apple placed in the 56th spot. That’s the best Apple has ever done, since their debut on the 1982 list, at 411th. It was also quite a jump from last year, when they placed 71st, and even a significant improvement from their previous record of 67th way back in 1993.

The record placing on the list was obviously due to their record breaking revenue in 2009; $36,537 Million… Thirty Six and a half Billion dollars…

Hrm… wait a minute… according to my records (yes, I know; me having “records” of Apple’s financial results is more than a little geeky), Apple’s revenue last year was $41,508 Million… but the Fortune 500 list clearly says $36,537 Million. That’s a difference of $4,971 Million. Not exactly chump change. Where did it come from? I highly doubt Steve Jobs found it in the couch cushions one day…

Oh, of course; as I mentioned in a previous blog post (on 26 Jan), Apple has been revising how they account for iPhone revenue. That made for an “extra” $900 Million in Q2, $1,693 Million in Q1, and a whopping $2,309 Million in Q4… and we still don’t have the revised numbers for Q3; those won’t be released until early July.

So, if we take in to account their revised revenue (at least for the three quarters we know about), where would they have been on the Fortune 500 list? Well, it looks like they’d be a very comfortable 51st place (just behind #50 Pepsico, who had $43,232 Million of revenue).

And, if Apple’s revised Q3 numbers are high enough, they might even edge out that acclaimed purveyor of sugared water to claim 50th spot… at least “theoretically,” since the official Fortune 500 List uses their previously announced “official” revenue claims, rather than the ones that result from their revised accounting. And to be honest, that only makes sense. But… it’s nice to think about. I had theorized that Apple could break into the Top 50 of this year’s List; even though they did not, officially, it’s cool that they might, even if only theoretically.

Of course, when the Q3 numbers are released, I’ll be sure to let everyone know how it turned out… that’s just the numbers and statistics obsessed geek kind of guy I am.

Cheers!

Apparently, the iPad will support 11 simultaneous finger touches. Kewl. As expected, there is a YouTube video showing it, but it only shows 10 fingers… it doesn’t show how they determined that 11 was the max…

Too cool. More detail here:

Yesterday, Apple released its fiscal results from the first quarter of fiscal year 2010. And it was a great quarter; over $15 Billion in revenue… their best quarter ever, as a matter of fact. As you may remember from a previous blog entry, the first fiscal quarter corresponds to the holiday season of the previous calendar year, and Apple traditionally does well during that Holiday shopping spree we all know and love, so big numbers should not be a huge surprise to anyone. Even less of a surprise is that I am now blogging about those results. That’s just the kind of guy I am.

Now, in that blog post on Apple fiscal results, I showed data compiled over the last several years. This data comes from the Data Sums that Apple posts with their results; I have been downloading these files and putting the numbers into a big honking spreadsheet to make some pretty cool (if I say so myself) graphs for analysis. So the first cool thing about this quarter’s release was the note attached to the data sum:

In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods above. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to the Annual Report on Form 10-K for the year ended September 26, 2009.

Now… that is interesting, and I’ll tell you why. The Data Sum that Apple releases each quarter contains not only the data for the quarter being reported, but also for the immediately previous quarter and for the year ago quarter, so you can compare how Apple is doing now to how they were doing in the past. And, as the note quoted above mentions, the changes in accounting principles were applied to the older results that are included in the Q1 2010 Data Sum. And the differences are pretty amazing.

Although the note does not specify, it is obvious, when you look at the numbers, that the impact from the new accounting principles is in the revenue Apple reported related to iPhone. Check it out:

iPhone revenue, based on these new numbers, was more than twice what was originally reported under the old accounting principles. Gross revenue for the year was $4 Billion higher than originally reported, based only on the differences from those two quarters. When Apple releases the new numbers for Q2 and Q3 09, the overall increase in total annual revenue will probably be pretty amazing.

Beyond the total revenue aspect, there are a couple of other cool factoids from the Q1 10 results:

First, for both this quarter and the (new) previous quarter, iPhone revenue was greater than CPU revenue. Which kind of takes the wind out of my sails; in the blog post linked to above, I argued that Apple was still, primarily, a computer company and it was computers, not iPods, that drove Apple’s revenue machine. That no longer seems to be the case. You could argue, I guess, that the iPhone is, in many ways, a handheld computer, but the fact that Apple themselves report iPhone revenue as separate from CPU revenue kind of makes the point. And the new device to be announced by Apple tomorrow may just add even more fuel to that fire.

The second cool factoid is that the total revenue for Q4 09 is now higher than for Q1 09. Remember how I said that Q1 revenue is always high, due to Christmas sales? That trend has been very evident in Apple’s results for the past five or six years, with a plausible explanation being iPods making such great Christmas gifts, and it showed in the “sawtooth” graphs I showed in my Charting Apple post. Well, at first glance, it appears that iPhone sales (which I postulated earlier might be stealing iPod sales) are causing Apple’s quarterly revenue to be more even, less influenced by Christmas sales. I am sure iPhones also make great Christmas presents, but the revenue from iPhone is less affected by the Christmas rush. Don’t forget, Apple gets a cut of the revenue from carriers. I don’t think we can make a firm conclusion at this point, based on just a couple of quarters; we’ll have to see what the “new” results for Q2 and Q3 09 are, and (naturally) the results from the rest of fiscal 2010. But rest assured, I will be blogging about them when they come out.

The other bit of neat info, not really from these fiscal results, is that Apple’s “cash on hand” and “short term investments” are around $40 Billion… which is more than enough cash to buy every single share of Dell. Not that this is actually “new” information; it’s been that way for a while; I’ve posted about it before. But it’s one of those things that is worth repeating. But who’d want to buy a washed up computer company like Dell anyway?

Well, as I said yesterday, I’ve been working on this blog post for a while now… almost two years. Well, not exactly “working” on it, more like “waiting for the data to come in.” You’ll know what I mean in a bit. And, yes, I know; it sounds a bit pathetic… but what can you do?

The genesis of it was a discussion I had with my good friend, Mr. Squid. I believe he responded to an Apple-related post on my old blog site, wondering if Apple could still be considered a computer company, or if they were making more money from iPods than from computers.

Because I had been tracking Apple’s Financial results for a while, I was able to give him information that confirmed, while there were times when Apple made more money from iPods than from computers, in general, computers were still the key to their business. Sure, they are more of a “consumer electronics” company, but CPUs are still what drives them.

In the meantime, I’ve done some additional research and pulled out some more numbers, especially some of their older financial results. But before I was able to make this blog entry, I wanted to wait until I had all the data for all of 2009.

Well, as of this past Monday, Apple has released their results for the fourth quarter of 2009. And impressive results they were, indeed. Other companies seem to be suffering from the recession; losing money or having “disappointing” results. But Apple did well. Not just well, but very well. I echo Mr. Gruber’s reaction: Yowza.

So, armed with all this data, what do we do? Well, as we all know, “these points of data make a beautiful line.”  So let’s make some graphs! After the cut, I have posted a bunch of the graphs in question. With them all, you may click to embiggen… although I tried to make them big enough to read as is. Enjoy!

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