Soaring iOS device sales reap record Apple revenues, profits

Sales up 82%, profits up 125% compared to one year ago

Apple continues to be planet’s mobile powerhouse, announcing record quarterly revenues and profits that were fueled by still-rising sales pace for its mobile devices. The company sold just over 20 million iPhones and just over 9 million iPads in the quarter ending June 25.What’s more, accessories for those iOS devices is, all by itself, a multi-billion business for Apple: $6 billion in the just-ended quarter, compared to $2.2 billion a year ago.Third quarter revenue was a record $28.57 billion, up 82% compared to the same period a year ago. Net profit was another record, at $7.31 billion, or $7.79 per diluted share, up 125% from last year’s $3.25 billion or $3.51 per diluted share. Gross margins were higher than management expected, rising to 41.7 percent compared to 39.1 percent in the same quarter last year. Nearly two-thirds of the company’s revenue now comes from outside the U.S. For the quarter, international sales were 62% of revenue. “The real sequential improvement, frankly, was due to emerging and developing markets,” said Apple Chief Operating Officer Tim Cook, during today’s earnings call. He mentioned specifically China, Latin America, and the Middle East.Apple says the final fiscal quarter, July through September, won’t achieve those heights: executives forecast  about $25 billion in revenues for this period.So far in the current fiscal year, executives said, Apple has reaped an astonishing $9.5 billion in year over year earnings growth, a 99% increase over the comparable three quarters last year.The Q3 sales brought the total of all iOS devices sold to 222 million, according to Apple. Sales of iPhones in Q3 soared 142 percent compared to the last year’s quarter, more than twice the growth rate for the overall smartphone market, according to Apple executives. The iPhone accounted for 46% of the period’s revenues.iPad sales were up 183 percent, and accounted for 21% of the the quarterly revenue. Apple’s Cook said that the “supply of iPad[s] improved dramatically over the quarter: we added almost 100% supply over the quarter.” In addition, Apple improved iPad supply still more in the first weeks of July, according to Cook.In response to questions, Cook described briefly Apple’s strategy for iOS device sales to the enterprise. The company trains and works extensively with the business sales arms of its carrier partners, because “many of these enterprises want one of our devices connected to a carrier” via an integrated cellular radio. Secondly, Apple does some direct enterprise sales on its own or acts as “an overlay sales force to a channel [partner] that serves enterprise.”Sales of Mac computers were also up, though not so dramatically. Apple sold 3.95 million Mac computers in the quarter, up 14 percent from a year ago. In the earnings call, Apple said it will release the Mac Lion OS X version on Wednesday. Cook said there was some cannibalization by customers who bought an iPad instead of a Mac. But he also said that more customers bought iPads than bought Windows PCs during that same period. Some customers delayed a Mac purchase, waiting for the release of Mac OS X Lion, he said. iPods continued their expected decline, dropping 20 percent compared to the same quarter last year. The Wi-Fi-based iPod touch, which is very similar to the iPhone, accounts for about half of all iPod sales, according to Apple.Apple’s iTunes store The iTunes Store reaped nearly $1.4 billion in revenue for the quarter. Apple said that by the end of the third quarter, it had paid a total of $2.5 billion to application developers. Cook was asked about the spate of patent battles Apple is embroiled in, many of them launched by Apple itself. “We have a very simple view here,” Cook said. “We love competition and think it's great for us and for everyone. But we want people to invent their own stuff. We're going to make sure we defend our own [patent] portfolio appropriately.”


Copyright © 2011 IDG Communications, Inc.

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