Is Apple unassailable?

While many like to say Apple does everything wrong, by comparison, Apple seems to be doing everything right. Despite not lowering prices or taking other drastic anti-reccessionary action, Apple just posted another record quarter.

In the words of Reuters (not an Apple fan site, btw) "Apple Inc's quarterly profit blew past Wall Street forecasts thanks to strong sales of Macs and iPhones and higher-than-expected gross margins, sending its shares up more than 3 per cent on Tuesday."

Well, that sounds pretty good to me. As you can read in Apple's official press release: "We're extremely pleased to report record non-holiday quarter revenue and earnings and quarterly cash flow from operations of $2.3 billion." That from Apple's Chief Financial Operator Peter Oppenheimer.

Well, yeah. Apple's profits rose 15 per cent overall. That's nearly three-and-a-half billion NZ dollars.

So despite Dell decrying the expense of Macs and showing how well its machines compete bang for buck, and despite Microsoft's threat to build stores that directly challenge the Apple Stores, as I wrote in a previous blog, consumers are still buying Apple-badged products.

There has been a lot of coverage of Apple's just-released last-quarter results, so I won't go into too much detail here. You can get the money angle on CNN Money.


But analysis of those results is interesting. iPhone's sold well, which is understandable with the recent release of the new 3GS and consequent lowering of the price of the 3G (5.2 million were sold in the quarter), but two of the other results were perhaps surprising.

Apple says 20 per cent of Fortune 500 companies have bought at least 10,000 iPhones - this represents so many orders that Apple is having to ramp up production. So perhaps the enterprise barrier against Apple is - finally - collapsing? At least in the mobile device category.

Macs also sold better than expected, but iPod sales declined.

Mac sales

Macintosh computer sales were up four per cent, representing 2.6 million units crossing the counters. Of those, over half (1.754 units) were laptops.

AppleInsider also says 1.147 million of overall Mac sales were in the Apple Americas' sphere, leaving 1.45 million Macs to be sold in the same quarter in the rest of the world.

The Mac sales figures have been further broken down by AppleInsider: the site reckons Apple Europe accounted for 626,000 Mac sales, Apple Japan 108,000, while Apple Asia Pacific (which includes FileMaker Inc) represented 230,000 Mac sales.

These stronger than expected sales are despite a weak education buy currently, and despite shortages of the 13-inch MacBook Pro, which I have talked about in another blog (suffice to say, I can see why Apple can't supply demand; the 13-inch MBP is a top machine).

Since Apple Australia (which includes New Zealand) reports direct to Cupertino, California, I'm not sure into which sector the Australian and NZ Mac sales figures fall, although the strength of the Asia-Pacific figures makes it look as if A/NZ figures are part of Asia-Pacific rather than Americas" figures.

But Apple would not qualify this.

For myself, I'm still expecting a completely new iMac some time (September?). This would revitalise desktop sales. But while I have never given Apple tablet rumours much credence, since Apple recently migrated its little 13-inch laptop into the Pro category, while leaving the consumer white Polycarbonate 13-inch on sale at a lower price, I think now more than ever a tablet is a possibility.

Apple has steadily migrated all its Macs into aluminium cases. That leaves the last white Poly MacBook as the orphan. The white Poly can't last long. Effectively, Apple has created a niche for a new little, consumer Mac laptop-ish thing. But this is just speculation on my part - and that student/consumer niche could just as easily be filled by a new aluminium, but lower-specced, student MacBook of some description.

I can just picture Apple's designers and engineers struggling to get that just right, in features and price point, while Steve Jobs prowls the corridors, scowling.

iPod sales

AppleInsider says about 10.215 million iPods were sold this quarter, delivering in US$1.492 billion (NZ$2.28 million) in revenue. This represents a seven per cent drop in units sold, and a ten per cent drop in revenue. As with the iMac, I don't expect things to change on the iPod front until Apple ships a really new bedrock iPod model.

Or unless the economy improves. Also, of course, the iPhone has impacted on sales on traditional iPods.

The Stores

On the store front, it's no secret that Apple's bricks-and-mortar shops have increased Apple's presence and sales. Can Microsoft emulate this? I'd be surprised (but hey, I often am). Smart Planet's Dana Blankenhorn reckons what commentators are missing is the fact that, apart from Apple, tech retail has collapsed. As he puts it, "I'm old enough to remember actual PC stores, chains like ComputerLand and even mom-and-pop shops, where young people hung around and traded tech tips in the early 1980s."

Now, even in New Zealand, you tend to buy your PC from a shop that also sells DVDs, TVs, vacuum cleaners, heaters and kitchen blenders. But this may be more a result of the commoditisation of personal computing, another concept Apple has been driving since the company was founded in the 1970s.

Blankenhorn also says "Yet technology continues to evolve. New product categories keep emerging. Many were pioneered by Apple, and knowledge of these new products was driven into the market by its Apple Stores."

Exactly.

At the very least, you can't say Apple isn't keeping things interesting. And you can't say Apple doesn't still have loads of potential.

- Mark Webster mac.nz