Apple on Jan. 24 announced a record-breaking fiscal first quarter for the 14 weeks ended Dec. 31. The company earned a $13.06 billion profit on revenue of $46.33 billion. What’s more, Apple sold 37 million iPhones and 15 million iPads. The quarter showed once again how important Apple is to the industry, and that there’s little chance of any other company in the space coming close to matching it in the near future.
But there were many more takeaways from Apple’s financial performance during the fourth quarter. As with any company, Apple must continue to innovate and deliver the products consumers want. Past quarters are usually a good indication of how the company’s strategy to achieve that goal is working out. Past quarters also provide solid insight into those things that matter most to the firm.
Read on to find out what Apple’s huge fourth quarter says not only about the iPhone maker, but the entire technology industry in 2012. Spoiler: good things for Apple, and bad things for competitors.
1. There’s no slowing the iPhone down
If the 37 million iPhones Apple sold during the fourth quarter tell us anything, it’s that there’s simply no slowing down Apple’s smartphone. The handset is wildly popular around the world, and that will only continue.Its competitors can only hope for a distantsecond place.
2. There’s no slowing the iPad down, either
The chances of the iPad’s sales slowing to a crawl in the coming quarters are also slim. The device, even after several months on store shelves, was still popular last quarter. With the continuing speculation that a new iPad will be launching this quarter, iPad sales should remain strong.
3. The iPod is dying
All this talk of strong sales leaves out one key feature of Apple’s financial statements that was easy to overlook-declining iPod sales. According to Apple, iPod sales dropped 21 percent year-over-year last quarter, totaling 15.4 million unit sales. That figure is nothing to sneeze at, but as more consumers buy iPhones, the need for an iPod will diminish. In a few quarters, the iPod might be just about dead.
4. Apple has tons of cash to do whatever it wants
According to CFO Peter Oppenheimer, Apple has $97.6 billion of cash on hand. That’s more than cash reserves of the vast majority of countries around the world, and it gives Apple the leverage it needs to do whatever it wants. Will it acquire other companies? Will it pay out dividends? The choice is Apple’s.
Things Will Only Get Better for Apple
5. Things will only get better this year
Apple’s strong showing last quarter indicates that the good times are still coming for the company.The iPad will jump-start fiscal second-quarter sales, and if Apple launches the iPhone 5 later this year, that’ll help next year’s fiscal first-quarter financials. There’s simply no downside for Apple investors right now.
6. Everyone is playing for second
There isn’t a single company in the mobile market that can even come close to matching Apple’s iPhone and iPad sales. In fact, it appears that Samsung, Motorola, HTC and others are all vying for second place in the smartphone market. Amazon is hoping it can cling to that spot in the tablet market. With such strong sales, there’s no stopping Apple’s dominance in the mobile space.
7. Expect Macs to steal serious OS market share
Although iPhone sales broke records last quarter, Mac sales were similarly impressive. Apple sold 5.2 million Macs during the fourth quarter, jumping 26 percent over the same period last year. With another strong quarter for Mac sales in its pocket,Apple can make the argument that it can take serious OS market share from Windows in the coming quarters. It’s a fascinating development, considering how far Apple has come.
8. Apple might take down PC companies
It’s worth noting that Apple sold more iPads last quarter than HP sold PCs. Is there a chance that Apple’s Macs and iPads could start taking down PC companies? Believe it or not, such a scenario might be possible. Companies like Dell, Acer and Lenovo are trying to find their special place in the computing market now that tablets have changed everything. But so far, they’ve had trouble. If Apple’s PC growth continues-and most analysts believe it will-those PC makers could be in for deep trouble.
9. Tim Cook can coast
AlthoughCEO Tim Cook is being celebrated today for leading Apple to record-breaking sales, perhaps he shouldn’t quite get all the credit. The products that helped achieve such strong sales were put in place when Steve Jobs was running the show. So far, it appears Cook is simply coasting. It might take quite some time before his own strategies impact Apple’s income statement.
10. The iPhone is benefiting everything
As Cook pointed out during his company’s earnings call on Jan. 24, the strong iPhone sales are starting to benefit all the other products his company sells. People who buy iPhones are buying iPads and Macs, and are using iCloud. They’re also spending boatloads of cash on iTunes. The iPhone is central to Apple’s success-and will be for the foreseeable future.