iPad 2, iPhone, Mac Sales Boost Apple's Quarterly Earnings
Apple reported strong sales for the fiscal 2011 second quarter ended March 26, with revenues of $24.67 billion and net profit of $5.99 billion. That represents a significant rise from the year-ago quarter, when the company logged revenues of $13.50 billion and quarterly profit of $3.07 billion.
Apple reported sales of 3.76 million Macs, a year-over-year increase of 28 percent, and 18.65 million iPhones, good for year-over-year unit growth of 113 percent. Apple's iPod unit continued its several-quarter decline, with sales of 9.02 million units representing a 17 percent year-over-year dip. Apple executives have long attributed the iPod's gradual slide to cannibalization by other devices in the company's mobile family, most notably the iPhone.
Apple CEO Steve Jobs returned from medical leave-on paper, at least-to deliver an upbeat statement. "We're firing on all cylinders," he wrote. "We will continue to innovate on all fronts throughout the remainder of the year."
Apple also sold 4.7 million iPads during the quarter, which saw the release of the next-generation iPad 2. "We sold every iPad 2 that we could make during the quarter," Apple Chief Financial Officer Peter Oppenheimer told analysts and media listening to the April 20 earnings call, while hinting that the 9.7-inch tablet appeals to both consumers and businesses: "Seventy-five percent of the Fortune 500 are testing or deploying the iPad."
Though Apple commands the lion's share of the tablet market and continues to maintain a healthy presence in smartphones, the company finds itself increasingly challenged by a variety of manufacturers pushing devices loaded with Google Android. On top of a patent-infringement case filed against HTC with the International Trade Commission, Apple has filed a lawsuit against Samsung, claiming that the look and user interface of the latter's smartphones and tablets mimic that of the iPhone and iPad.
"Rather than innovate and develop its own technology and a unique Samsung style for its smartphone products and computer tablets, Samsung chose to copy Apple's technology, user interface and innovative style in these infringing products," Apple wrote in its suit. Soon after, Samsung issued a statement that it was planning to take "legal action" against Apple.
Apple is expected to issue a new iPhone and iOS later in the year, along with Mac OS X 10.7 "Lion," the next version of its operating system for Macs.
"Demand on iPad 2 has been staggering," Apple COO Tim Cook told media and analysts during the call. Despite that demand, though, he expressed confidence that "we can produce a very large number of iPads for the [coming] quarter."
Growth in the Chinese market apparently helped buoy iPhone sales, as did the smartphone's appearance on Verizon and a strong quarterly performance by AT&T. "We're extremely happy with the iPhone 4 and iPhone 3GS," Cook said.
He also suggested that the recent Japanese earthquake and tsunami, while an enormous tragedy, had no "supply or cost impact" on Apple's quarter: "Our business in Japan, we had some revenue impact in Q2 but it was not material to Apple's consolidated results."
Jefferies & Co. analyst Peter Misek issued a co-authored research note April 20 summarizing Apple's results as "strong," and suggested that Apple will "handily beat" its own guidance for next quarter.