State of the Apple Nation

Every now and again, I like to look at the state of Apple. With billions in the bank, Apple seems to be in a stronger position than ever. Steve Jobs has been declared CEO of the Decade, Apple computers have been selling well in Europe and the iPhone has made Apple more profit than Nokia.

Not too bad, you might say, in a worldwide recession.

Steve Jobs was made "CEO of the Decade" by Fortune Magazine, which has published an extensive treasure-trove of data on America's "most enigmatic" business leader (in 9to5Mac's words).

Fortune says "In the past 10 years alone he [Jobs] has radically and lucratively reordered three markets - music, movies, and mobile telephones - and his impact on his original industry, computing, has only grown."

And since Apple has knocked the cellphone giant Nokia of its profit perch, it would be easy to assume Apple was all about the iPhone and no longer about computers.

But that's simply not true.

Nokia can still claim the largest global market share, but Apple (NASDAQ:AAPL) has overtaken it as the world's most profitable handset vendor in the third quarter of 2009, according to Strategy Analytics. Not bad for a one-handset offering.

Meanwhile, however, the iPhone has become vulnerable to the first widely recognised iPhone malware, written by an Australian student as a prank. Only 'jailbroken' iPhones are susceptible, but it means the iPhone security door has been forced open a little bit. Symantec has been talking about that.

This malware has a name that should evoke fear in anyone with any taste and a memory of the 1980s: think 'ghastly, disturbing, tasteless and insidious' - yes, it's called the 'Rick Astley worm'.

Strategy Analytics estimates that Apple's iPhone operating profit came in at US$1.6 billion in the third quarter of 2009, while Nokia recorded US$1.1 billion in operating profit. But Nokia is still very powerful - it has has 37.9% market share after all, Telephony Online says.

Nokia's profit margin for its handset division has been shrinking during the entire 2009 global economic downturn, while the handset-maker has also been facing pressure from Google Android devices and other new high-end smartphone offerings.

But Apple has just released new iMacs and a new MacBook, too. Based on Seeking Alpha's Discounted Cash Flow analysis of the notebook PC businesses of Apple, HP and Dell, the site has estimated Apple's notebook business is more valuable than that of HP and Dell combined. The analysis puts Apple's notebook value at US$22 billion, but HP's at US$12 billion and Dell's at US$6.

Meanwhile Wired magazine has said  Apple's 13-Inch Pro is "now every bit as impressive as its big bros" in an article lauding its features, which make it "pound for pound one of the most impressive laptops on the market today".

The Mac business is also making waves in Europe. Windows and other PC sales in the UK were down 2.4 per cent, and were also down in Western Europe. But Apple's market share has grown, despite Macs being 'higher-priced in a down economy'.

The new European sales figures for the third financial quarter of 2009 were released by research firm Gartner last week. The data showed Apple's market share of computer sales in the UK increased from 3.8 per cent in 3Q 2008 to 5 per cent in 3Q 2009.

In the three-month frame, Apple shipped 165,000 Macs in Europe, representing 26.6 percent growth from the year before, behind Acer's 35.3 per cent growth (but everyone else's sales declined).

Meanwhile, software giant Adobe, which started out as a Mac software maker with revolutionary desktop publishing software, but which switched to cover Windows as well many years ago, has announced it's laying off another few hundred workers  - the 680 pink-slipped represent a cut of 9 per cent. The job cuts will be worldwide. Adobe already cut hundreds of jobs last December.

Microsoft should be buoyant on strong sales of Windows 7, which Microsoft's partner group manager, Simon Aldous, has admitted owes a lot to Apple's OS X (in an interview with PCR Online). No surprise there.

That may be so, but Apple's OS is still a lot more secure, either intrinsically or because its market share is still considered small. SophosLabs reported in its security blog that a test Windows 7 system on a clean PC was affected by 80 per cent of viruses it threw at it, reported the Independent newspaper in Britain.

US analysts are now asking if Apple is a worrying blip on Microsoft's radar, in a report on Reuters. The article looks at the differences and profit margins of both companies. The same article notes that Google may be another worrying radar blip.

All in all, it has been a fantastic year for Apple against all expectations.

- Mark Webster mac.nz

Pictured above: The Astley worm on an iPhone - "Never gonna give you up..."