KEY POINTS:
With Apple's financial results released, it's interesting to see where the revenue comes from.
Apple's strongest sales are, quite naturally, in the US but while investors are happy that Apple made record revenue even as the recession bites, almost half of Apple's overall revenue this time around came from international sales.
Overall, while Apple sold a record number of iPods, it also moved the second highest number of Macs in the 25 years since the Macintosh brand was launched. And 46 per cent of Apple's total revenue for the last quarter came from sales outside the US.
In the last quarter's financial report, it states "The Company derives a large and growing portion of its revenue and earnings from its international operations." This is showing, increasingly, that Apple is growing as a brand outside the US even while sales in the homeland slow.
A lot of this success comes from the continued spread of wholly-owned Apple Stores, like the three opened in Australia last year. Apple ended the quarter with 251 stores in 10 countries. Apple will keep building 'em, too, announcing plans to open another 25 stores this year despite the fears blighting the financial landscape. About half of those will be outside the US.
Remember, impressive foot traffic through Apple Stores was given as part of the reason Apple dumped its attendance at the Macworld conference after this year's: Apple said it no longer needed exposure in the trade show.
US iPod sales were slightly down overall, but Apple Chief Operating Officer Tim Cook noted in the company's quarterly financial report conference call that while US iPod sales contracted three per cent at the unit level year over year, "all the growth you see in our numbers, 22.7%, was all international."
iPod sales still managed to pull the company into record revenue levels.
It's possible the iPod has reached saturation in the States but hey, it's still a big world outside of there.
Macworld magazine reported Apple's Chief Financial Officer Peter Oppenheimer saying Apple enjoyed a market share topping 70 per cent for MP3 players in December 2008, quoting figures from the NPD Group. Oppenheimer pointed out that iPod market share exceeds 70 per cent in the United Kingdom and Australia, 60 per cent in Japan, and 50 per cent in Canada. The iPod saw year-over-year gains in France, Germany, Italy and Spain, too.
The iPhone can also be factored in. Apple hoped to sell 10 million during 2008, yet sold 13.7 million. For the quarter, Apple claims 4.4 million iPhone sales, with the device now available in over 70 countries.
Unfortunately it's not possible to get clear information about Australasian Apple sales. Apple does not release Australian figures, and it appears that New Zealand-destined Apple products are a subset of Australia's allocation, making it impossible for me to tell how well NZ sales fare compared to Australia's.
But Apple Australia reports directly to Cupertino and is not represented in any of the international subsets shown in the figures (Europe, Japan, retail, other segments). Looking more closely, though, at the Q1 2009 Unaudited Summary Data authored by Farnaz Fattahi (released 21st January), 'Other Segments' is explained as 'Asia Pacific and FileMaker' in the notes.
According to that document, then, Apple sold 178,000 CPUs in Asia Pacific in the first quarter of 2008 and 203,000 units in the first quarter of 2009. That's a 9% increase in CPUs sold year over year. Apple sold 205,000 CPUs in this area in the last quarter of 2008.
The figures, if correct for this region, would include Australia and New Zealand, plus any Pacific territories and possibly Indonesia, Malaysia and other Asian countries, but not Japan. And for China I have no idea; that's potentially a vast market.
Sales of Macs were actually down slightly overall from Apple's record, of comprised 2.6 million units sold in the last quarter of 2008, but still good, especially abroad. While sales of Macs were up 8.6 per cent year over year for Q1, Tim Cook stated "... international on Mac was much stronger than the US." Growth in Macintosh sales year over year was 16 per cent, but only 2 per cent of that growth was represented by the US. "We saw several countries over 20 percent," added Cook. That was, apparently, Canada and some Latin American countries.
A lot of that strength in Mac sales has been fueled by Apple's notebooks, which are taking an ever bigger proportion of the Mac CPU tally. This trend will continue unless Apple refreshes its iMac, mini and the Mac Pro. Apple's laptop sales showed a 34 per cent increase year over year and when Apple released its unibody MacBooks, sales went up. They will do so again with new Mac desktops, even if sales spikes are more pronounced outside the US.
But the recession may still strike the golden fruit of Californian tech companies. So far Apple has not signalled any impending staff cuts, unlike many other companies, and is still growing and looking strong.
Since Apple is still so cash-rich, it's possible it could actually expand its workforce rather than contract. If you think about it, with Microsoft, Google, Intel and others all shedding workers, it's rich pickings for Apple's Human Resources department.
Perhaps, as others have said, Apple will hold its place and emerge as a stronger company by far once economic conditions improve.
And perhaps President Obama's use of Macs and reported trepidation at being confronted with 'old' PCs running Windows in the Whitehouse will impact favourably on the US market over the next few months. Imagine if the US government switched to Macs?
- Mark Webster
Pictured above: Phil Schiller, senior vice-president of worldwide product marketing for Apple. AP Photo / Ben Margot
