Apple's record-shattering first quarter left analysts expecting all good things for Apple's future, despite Jobs' indefinite leave of absence.
18 announcement of its fiscal first quarter 2011 results
was summed up
nicely by Technology Business Research analyst Ezra Gottheil. In a research
note released after Apple's earnings call, Gottheil wrote: "We're running out
record revenue and profit, $26.74 billion and $6 billion, respectively; ended
the quarter with nearly $60 billion in cash; and sold record numbers of Macs,
iPhones and iPads during the quarter. Despite the company's Jan. 17
announcement that CEO Steve Jobs is taking an indefinite medical leave of
absence-which while announced on a day that the markets were closed, nonetheless
caused Apple's stock to fall but later right itself-analysts were positive
about the likelihood of Apple having many more strong quarters ahead.
Apple's trajectory over the next three years will be similar whether or not
Steve Jobs is at the helm," wrote Gottheil.
factors contribute to this position, and chief among them is the world's
continued interest in the iPhone. While Apple has sold as many iPhones as it
has been able to make (during the call, COO Tim Cook said Apple was "working
around the clock to make more"), demand is expected to increase further with
the release of Verizon's CDMA (Code Division Multiple Access) version and
infringe on the iPhone's main competitors, smartphones based on Google's
Android mobile-operating system.
for Android's traction is Apple's exclusive deal with AT&T, keeping iPhone
out of more than half of the largest smartphone market in the world, the U.S.,"
wrote Gottheil. "In signing a deal with Verizon, Apple has more than doubled
its potential U.S. market, and much more than doubled the part of the U.S.
market it has not already penetrated."
analysts, in a Jan. 19 note, added, "This was the first quarter that we have
seen Apple's vision for itself as a mobile-device company come to fruition. ...
We see [Apple] targeting a massive market growth opportunity while being
pointing to Apple's continued success is interest from China. "Several years
ago, we identified China as a top priority," Cook said during the earnings
call. "We put enormous energy into China, and the results of that have been
from "greater China," which Cook defined as Mainland China, Taiwan and Hong
Kong, was $3 billion for all of fiscal 2010, during the first quarter of
fiscal 2011 alone, the area chalked up $2.6 billion in revenue.
also been an outstanding market for us ... and there are several other Asian
companies doing extremely well," Cook added.
another factor is growing interest from enterprises. While the iPhone was once
cause for much debate, and IT-manager anxiety, within corporations, it's now
being added to CIO-approved device lists and adopted as a valued enterprise
tool. Apple's iPad is also finding the same treatment.
revenue call, Apple CFO Peter Oppenheimer reported that 88 of the Fortune 100
companies are now testing or deploying the iPhone. Additionally, "over 80
percent of the Fortune 100 are already deploying or piloting iPad, up from 65
percent in the September quarter," he said. Among the latter companies are JP
Morgan, Wells Fargo, Sears and DuPont.
to this trend is the increased availability of 4G technology, with T-Mobile and
Verizon Wireless rolling out networks in 2010, and AT&T expected to begin
deploying one this year.
Apple's 2011 second quarter, analysts at financial services firm Jefferies
& Co. wrote in a Jan. 18 research note: "Longer term, we believe Apple's
product leadership, vertical integration, and vast scale mean that it will
receive the lion's share of the economic benefit from the two biggest multiyear
trends in technology: 4G and tablets."
Securities analyst Brian White concurred, writing in a Jan. 19 note, "We expect
the stock to continue its upward trajectory."