Archive for April, 2008
Apple reported record fiscal 2Q 2008 financial results ending March 29, 2008. While profits rose across all company divisions, margins were less than previously expected. Apple reported a gross profit of of $7.51 billion and a net profit of $1.05 billion. Last year for the second fiscal quarter, Apple made a gross profit of $5.26 billion and a net profit of $770 million, however gross margin was 32.9 percent this year down from 35.1 percent last year.
Apple sold 10,644,000 iPods, 1,703,000 iPhones, and 2,289,000 Macs during the second quarter. Revenue growth for the Mac division was exceptional with 54 percent compared to the same quarter last year. Apple reported an overall revenue growth of 43 percent with over $17 billion in revenue and $4 billion in cash flow for the first fiscal half of the year. Apple’s CEO Steve Jobs added in a press release: “we have strong momentum to launch some terrific new products in the coming quarters”. Apple stock closed at $162.89, up $2.69 for the day.
TIM ( Telecom Italia Mobile ) has secured the right to sell the next generation iPhone without a contract and carrier lock, Stefano Carli reports for the prestigious Italian newspaper La Repubblica. There will be no revenue sharing nor carrier exclusivity, both of which Carli credits to the six month negotiations headed by TIM’s chief Franco Bernabè. Carli goes on to say that Jobs was ultimately convinced by Bernabè to abandon the successful US iPhone carrier model to one which would work best in the Italian market.
“The agreement is revolutionary because it signals a major change in the Apple strategy” writes Carli. He cites 3 major points in the agreement:
– the current generation iPhones will not be marketed in Italy, instead the new 3G handsets will be directly introduced,
– the agreement is not based on ‘revenue sharing’, instead each iPhone is marketed at a “higher price”,
– TIM is not given an exclusive carrier deal, but the right to sell the 3G handsets at least through summer ’08, after which Vodafone and 3 are the candidates most likely to bring the iPhone to Italy for next Christmas.
Carli then asks: “It’s a strange agreement at first site. TIM takes the iPhone home first and pays much less than the others before it. Why would Jobs accept all this?”. Carli reasons given that pre-paid voice plans are very popular in Italy, making huge profits from them would not be possible. Jobs’ primary objectives now seem to be promoting the Safari mobile browser to encourage the higher consumption of data and promoting content purchase from mobile iTunes rather than to sell fewer handset at the highest possible cost that come bundled with carrier exclusivity and fixed plans.
Jason Schwarz, an Options Strategist for Lone Peak Asset Management, writes for SeekingAlpha:
“Recent data is suggesting that Apple is on the verge of breaking out in a major way…The Apple market share story begins with the reemergence of the Mac, in a recent interview Apple COO Tim Cook indicated that during fiscal 2007, Apple sold 7 million Mac computers; still just a fraction of the 260 million units market estimated by IDC…The recent release of the ultra-thin MacBook Air seems to be getting Apple into the hard-to-reach business user segment…Any one of the +100 million ipod owners are potential iphone owners as the halo effect expands from ipod now to iphone. Bank of America analyst Scott Craig also feels that current estimates of iphone sales are too conservative…By selling 45 million phones Apple would generate in excess of 5 billion in profit…The market share story insulates Apple from typical consumer slowdown worries and gives investors conviction to buy and hold…Pre-3G iphone is a great time to enter a long position…It might just take you to $300.”
IndiaTimes is reporting that VodaPhone will carry the iPhone for the Indian market come September and the UK based company is also “likely to become the carrier for the Australian market once iPhone is launched there”. The iPhone may in fact launch in India and other less affluent markets like Mexico and some south east Asian countries in the months to come, just don’t be surprised if a less featured model is introduced instead of the upscale 3G model everyone is expecting. Could the NanoPhone be introduced in India first?
Tom Spring describes in his PC World Blog some features of the upcoming 3G Apple iPhone:
– 8, 16, and 32GB
– thinner case and better camera
I’ve been talking to a few people in the know regarding the introduction of lower end iPhone models and it sounds like Apple is working on multiple iPhone projects, however technical issues have mainly hindered an early release of new lower-end handsets. The NanoPhone, for instance, was repeatedly described by my sources as an unbelievably small and thin model which has suffered from adequate battery life. Feature-wise, I’m told the NanoPhone will lose the camera and forego some of the advanced features in the upcoming iPhone second generation model like 3G capability and GPS in exchange for a user interface which was described as more innovative than the current generation. I was told that the ideal scenario for Apple would have been to separate the launch of the 2 models by several months, first introducing the 3G iPhone in June and then the NanoPhone just before the holiday season ’08. While that may still play out, the more likely scenario will be the introduction of the NanoPhone at the start of ’09 at the Macworld gathering. I’ll have more on the NanoPhone development later.
Looks like Samsung, LG, and HTC won’t be the only big name handset makers to introduce an iPhone clone: James Sherwood of The Register reports “Nokia has confirmed that it’s developing a touch-screen equipped handset to take on the Apple iPhone”. The device will be another shameless rip-off of iPhone’s good looks and hopes to marginally imitate some iPhone functionalities, although it won’t have a multi-touch sensitive screen. No date or price have been released.