Part of their crappy outlook is thanks to a stronger yen, which makes exports more expensive, and its equity investments, but obviously the hard blow is coming from worse-than-expected sales of LCDs, digital cameras and video cams. Samsung and LG might fare better, but we're looking forward to Microsoft's earnings report today, since it might better indicate the health of the industry than Apple's. [Forbes, Image: Shaggy6Six6/Flickr]

Here's some context for the numbers: That's more iPhones than every previous quarter combined (6.1 million), the most Macs ever in a quarter (21 percent growth), and the most iPods ever in a non-holiday quarter. Apparently the iPhone would've been 39 percent of Apple's revenue in this quarter if they hadn't spread how it's accounted out over a stretched period of time. That's fairly incredible. And they've already passed the 10 million sold mark for 2008. Won't talk about how many new iPhone users with iPhone 3G vs. people trading in old one. Boooooooo.

Apparently they think the Mac sales would have even been better if the economy didn't suck and you assholes hadn't waited for the new notebooks, though they're not sure how the big impact of those things were. iPod marketshare is still over 70 percent in the US as of September, though most growth is abroad.

Steve Talking
Steve is talking about subscription accounting rules for iPhones over their two-year life and changing them because it's such a huge part of their business. "Apple beat RIM!" RIM sold 6.1. Apple sold 6.9 million. They're "a good company that makes good products" and it's amazing after 15 months in the market, Apple has beat them. "We're just happy to beat them numbers to numbers." 200 millionth app will be downloaded tomorrow.

Steve seems upbeat about shitty economy: "I wouldn't trade our customers for any other company's customers in the entire world." They'll delay in crappy times, they won't switch. Also feels good about their marketshare, and product lineup.

Steve on netbooks: "Not a lot of them getting sold. Our entrance into that category" is the iPhone. But "we'll wait and see" how the category evolves and "we've got some pretty interesting ideas if it does evolve." Also, "this particular downturn is not creating a market of cheaper computers, that market has existed for sometime. There are parts of that market we choose not to play in... We choose to be in certain segments of the market." "Our DNA" won't let them ship a $500 computer that's "a piece of junk."

They're trying to add more value to customers in segments they already play in, like making MacBook more Pro. He doesn't think the downturn will force Apple customers to use cheaper products.

Poor Apple TV, it will "continue to be a hobby" into 2009.

Steve on multiple kinds of iPhones: "From everything I've heard, Babe Ruth only had one home run, he just kept hitting it over and over again." It's all about software now. "We're extremely comfortable" doing what they're doing, and "approaching it as a software platform." And that's it.

It's clear Steve came on to ease investor fears about Apple's—and his own—health in the crappy economy. Based on after hours trading so far, it seems to be working.

Apple Reports Fourth Quarter Results
6.9 Million iPhones Sold
Mac Sales Reach All-Time High

CUPERTINO, California—October 21, 2008—Apple® today announced financial results for its fiscal 2008 fourth quarter ended September 27, 2008. The Company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share. These results compare to revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter’s revenue.

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV® over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $11.68 billion of “Adjusted Sales” and $2.44 billion of “Adjusted Net Income.”

Apple shipped 2,611,000 Macintosh® computers during the quarter, representing 21 percent unit growth and 17 percent revenue growth over the year-ago quarter. The Company sold 11,052,000 iPods during the quarter, representing eight percent unit growth and three percent revenue growth over the year-ago quarter. Quarterly iPhone units sold were 6,892,000 compared to 1,119,000 in the year-ago-quarter.

“Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone—we sold more phones than RIM,” said Steve Jobs, Apple’s CEO. “We don’t yet know how this economic downturn will affect Apple. But we’re armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt.”

“We’re very pleased to have grown revenue 35 percent and to have generated $9.1 billion in cash in fiscal 2008,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter. We are providing a wide range for our guidance, targeting revenue of $9.0 to $10.0 billion and earnings per diluted share between $1.06 and $1.35.”

Apple will provide live streaming of its Q4 2008 financial results conference call utilizing QuickTime®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Tuesday, October 21, 2008 at www.apple.com/quicktime/qtv/earningsq408/ and will also be available for replay for approximately two weeks thereafter.

[Apple]

Even though iPod sales are essentially flat, revenue is up, due to iPod touch (more expensive, and they don't break down sales by iPod type, plus shuffle got cheaper). They're definitely the music industry juggernaut to topple: Apple owns 73 percent of portable music player market and iTunes has 85 percent of market for legally purchased music. No numbers on movie rentals.

Macs' growth was three and a half times the PC growth rate in March. Desktop sales up 37 percent from last year but notebooks are where the money is: portable sales up 61 percent from last year. 50 percent of retail buyers new to Mac.

Still expecting to sell 10 million iPhones by end of the year. Analyst tries loopy-loop endrun question about lower iPhone supply and declining sales to get them to admit new 3G iPhone, Apple replies (repeatedly to not-so-sneaky iPhone questions trying to get 3G hints) they're still confident they can hit 10 million. Interestingly, they're not counting any iPhone revenue from units sold after SDK announcement until 2.0 firmware launches in June—maybe indicates they don't think people will buy iPhone until 3G launches?

Okay famed Gene Munster gets them to have to launch into their own long loopy answer about why they're delaying revenue reporting on iPhone when the 2.0 update is free. Seems obvious it has little to do with software. Follow up, another analyst asks about keeping 2.5G iPhone after 3G iPhone out, gets totally shot down.

CUPERTINO, California—April 23, 2008—Apple® today announced financial results for its fiscal 2008 second quarter ended March 29, 2008. The Company posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter's revenue.

Apple shipped 2,289,000 Macintosh® computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The Company sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 1,703,000.

"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."

"We're thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00."

Apple will provide live streaming of its Q2 2008 financial results conference call utilizing QuickTime®, Apple's standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Wednesday, April 23, 2008 at www.apple.com/quicktime/qtv/earningsq208/ and will also be available for replay.

"TiVo-owned" subscribers climbed to 1.7 million from 1.6 in the same period last year, though their overall numbers (cumulative total of 4.1 million) were hurt by DirecTV dumping TiVo boxes. Also stinging is their churn rate, which is up to 1.3 percent from 1 percent a year ago.

If you look at next quarter's guidance, it's actually not expected to be any prettier: "Revenues in the range of $58 million to $60 million, a net loss in the range of ($9.0) million to ($12.0) million." They could be pulling the classic Apple trick of undershooting and overdelivering, especially considering the zillion tributaries of revenue they've been setting up with all of the wheelin' and dealin' they did this quarter. These deals are why TiVo can (sorta) call this quarter a good one, even if it's just spin while they're bleeding money. Of course, it'll be a few months before see if it pans out that way.

Yes, Apple is making more than twice the retail price of the iPhone for every one sold. With cost analysis's putting the price of iPhone components at around $250, that means that Apple is pulling in around $580 in profit on each iPhone. Yeah, I know, they need to pay their designers and their advertisers and their rent and all the business overhead that comes with running a gigantic electronics company, but the fact of the matter is that Apple is pulling in over the full price of their iPhone in profit with each one sold. Now we know why they went with that five-year exclusive deal with AT&T, eh? It's basically a five-year contract with a money-printing machine. [NY Times via New Launches]

Macs made up 62 percent of Apple's total revenue, with notebooks making up 62 percent of Macs sold. 36 percent came from iPod/iTunes, with 85 percent of songs purchased and downloaded in the US from iTunes. RE: Cannibalization of iPod sales by iPhones, "We saw no obvious cannibalization prior to the new iPod announcement."

We didn't get a straight-up breakdown of how much they're pulling in from their plum deal with AT&T, but combined revenues from iPhones, iPhone accessories and subscription payments from AT&T total $118 million. Piper Jaffray's Gene Munster tries to get them to divulge more detail about the revenue sharing agreement during the call, but they resolutely won't spill. Apple also refuses to budge on daily sales numbers when asked how the price drop affected them, other than to say that they accelerated. But we did find out they estimate 250,000 iPhones have been hacked, which is a hefty chunk of the 1.4 million out there.

Interesting Apple Store bits: They're opening an Apple Store in Beijing this summer, the first in China, and they pulled in 100 million visitors to retail locations this year, generating $4.1 billion in revenue.

Speaking of Asia, "Japan continues to be our most challenging major market." It's the only market they're not growing wildly in calling it a "tough" market.

Technical problems with the call—three people not getting through to Apple. Ooooo.

Finally, for the entire fiscal year 2007, Apple pulled in $24 billion, with a net income of $3.5 billion, selling 7 million Macs, 52 million iPods and over a million iPhones. Not too shabby. [Apple]

While making 62 bucks a pop isn't exactly subsidizing them, the 20% margin before marketing costs grossly underperforms the Apple standard of 50% gross margins on products "outside its computer lineup," like iPods.

However, they jump to over 30 percent on the new 160GB model, given the marginal difference in storage costs. It's also entirely probable that Apple's worked out stellar deals on the parts—they have a cozy relationship with Intel and Steve-o's been bargain hunting components since he was a teenager.

In any case, with the iPhone around the corner (which will most likely bank 50 percent) their biggest concern will probably be finding people to count the mad loot rolling in. – Matt Buchanan

What Apple TV Costs to Make [BW]