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Mac Planet: Apple's go figures

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Wall Street was reportedly 'disappointed' with Apple's latest earnings announcement. Photo / File
Wall Street was reportedly 'disappointed' with Apple's latest earnings announcement. Photo / File

Wall Street was reportedly 'disappointed' with Apple's latest earnings announcement, but this has to be taken with a grain of salt. I mean, a couple of financiers can't buy their fourth luxury cars now? Boohoo. My advice to them is: go figure. Properly, this time.

Because Apple's figures were impressive. They just didn't meet the inflated expectations of those who deal in inflating expectations for pecuniary gain. Apple's quarterly revenue was US$35.0 billion. In NZ dollars, that was about NZ$43.2 billion on the day I wrote this (29th July). A shade under a quarter of New Zealand's entire Gross Domestic Product for 2010, if we accept the World Bank's figure.

Apple's latest quarterly net profit was US$8.8 billion, and compares to a revenue of US$28.6 billion with a net profit of US$7.3 billion in the year-ago quarter.

That's decent year-on-year growth. Again, as I do seem to keep saying, Apple's sales keep growing despite the recession.

Apple declared 26 million iPhones sold in the last quarter (which means sales were up 28%).

Sales growth in China continues to be very significant for Apple. CEO Tim Cook stated "The growth in Asia-Pacific was 25 per cent, and that majority of the difference in our sequential growth rate was a result of Greater China, which represents about two-thirds of our revenue for the region." India is coming more into Apple's sights while it solidifies its presence in the Chinese markets.

Most markets were up for iPhone except Europe, which stayed flat after averaging across territories. Macworld has a lot more detail, if you like that sort of thing.

The US carrier AT&T has been forging ahead with iPhone sales. AT&T announced its financial results for the second quarter of 2012 on July 24th. Of the 5.1 million smartphones the carrier sold in the last quarter, a whopping 72.5 per cent were iPhones.

The iPhone continues to be very popular in the States. The Apple smartphone accounts for fully half of US smartphone sales, whereas globally it is outsold two to one by Android. Analyst Benedict Evans reckons this all comes down to plan pricing and phone subsidies.

In the US, consumers save US$100-$200 on the cost of the phone, but plan pricing is the same, so US customers only save 10 per cent by going with an Android device. Not that compelling a saving. Evans states that the US mobile market is structured around significantly higher usage, higher monthly bills and much less competition on handset subsidies. But overseas, Androids can be much cheaper thanks to more flexible plan pricing. That means iPhones sold outside the US can be as much as 160 per cent more expensive than Android counterparts, which certainly seems about right for New Zealand.

iPod carries on its gradual decline, though, falling 10 per cent down to 6.8 million, as people use their iPhones and iPads as de facto iPods (as I sure do). Despite price discrepancies, iPhone remains strong here, but which platform is in the lead seems contentious. Apple hasn't specific NZ figures that I have found, but international ad services company InMobi drew figures from 1.2 million mobile ads served in the New Zealand market, finding that iOS made 33.4 per cent of impressions, Android 29.5 per cent and Nokia 6.1 per cent.

Last year's figures had Android ahead, on 28.7 per cent and iOS at 23 per cent. InMobi credits this to Telecom and 2degrees having joined Vodafone as official Apple vendors, along with NZ's growth in iPad sales.

But market research company IDC reckons Android holds double the iPhone's share in NZ and also found Android sales were growing faster. So maybe it just means more New Zealanders are buying Androids, but then are much less active online with them than local iPhone users.

Globally, Good Technology, a provider of secure enterprise mobility solutions, released its second quarter device activation report on July 25th. The full report provides a breakdown of smartphones and tablets activated by Good's enterprise customers to pinpoint changes and trends in device and mobile operating system usage within corporations. This quarter's results demonstrated that while Android smartphone usage within the enterprise nearly doubled, iOS continues to dominate the smartphone platform - primarily, the iPhone 4S.

Good's Q1 findings showed the iPhone 4S hit a record high, with 37 per cent of all activations for the first quarter of 2012 (four times that of any other single device). iPad 2 claimed second overall (17.7 per cent of activations).

With less than one month on the market, the new iPad, released March 2012, was at number four, with 4.3 per cent of all activations for the quarter, and 12.1 per cent of activations in March alone.

Amongst Android devices, the Motorola Droid was top with 1.6 per cent of activations.

Other sources say iPhone is making impressive inroads into enterprise, long held as the one major market Apple would never appeal to. This is partly because developers for mobile platforms are moving to the enterprise market. When asked to choose which mobile operating system is best for the enterprise market in this year's survey, 53 per cent of developers surveyed chose iOS over Android (38 per cent). Last year, the platforms tied at 44 per cent.

iPad retains very effective sales despite dozens of tablet alternatives now being available. In total, Apple has shipped 84 million iPads across its three successive models. The last quarter, iPad sales hit 17 million units, including the discounted iPad 2 which has been popular in education markets. That's a rise in iPad sales of 84 per cent, despite iPad launching late in the Chinese market thanks to a trademark dispute that has now been resolved.

Mac sales growth at 'just' two per cent (that's 4 million sales for the quarter) still seems impressive to me, considering how cheap PCs often seem by comparison, and in the light of prevailing general financial conditions. The PC market has been weak everywhere, except for Apple. But Cook believes the primary factor of the last quarter's lower growth rate in Mac sales is the timing of the Retina MacBook Pro - the new laptop was announced with less than three weeks remaining in quarter. Its strong sales will show more impact in the next quarter. For the seventh quarter in a row, research company Gartner shows PC sales were flat, especially in the US, with a 5.7 per cent decline from the same quarter last year. But Gartner showed Apple at number 3 (as did IDC). Gartner reckons Apple's share of the US PC market is 12 per cent while IDC puts it at 11.4. These figures exclude tablets.

Generally, no 'iPad 4' is expected any time soon, with the 3 still fresh, but an 'iPhone 5' with a new design and new features seems much more possible for this year, going by the spread of rumours. That and a potential rollout of 'Retina' 13-inch MacBook Pros and iMacs could boost iPhone and Mac sales considerably. On top of that, Apple's latest OS just shipped, causing a six-fold increase in Apple's server traffic. But European financial problems are obviously having an impact.

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