Apple’s iPhone is now the most profitable business in the world. The company is going to generate $45-$50 billion of profit this year. That’s way more than the next-most-profitable company in the world, ExxonMobil which generated about $30 billion of profit last year. Apple’s iPhone business alone is likely more profitable than any other company in the world.
Apple’s overall profit margin is 30%. The iPhone, most analysts agree, is more profitable than some of Apple’s other products. So perhaps the iPhone business has a profit margin of, say, 35%. The iPhone business, meanwhile, is currently generated about $100 billion of revenue per year. So it seems likely that the iPhone business is generating ~$35 billion of profit per year. That’s more than ExxonMobil.
Five years ago, the iPhone didn’t exist. Apple invented it out of thin air and then launched it in the summer of 2007.
In other words, the Apple division built around a product that didn’t exist five years ago is now the most profitable company in the world. WOW!!!
Yesterday Apple crossed a big big milestone in after-market trading, when its market cap exceeded $500 billion for the first time. Henry Blodget of Business Insider said, “Apple is one of the only one of four companies in history to break this mark, and unlike others that have briefly traded in this neighborhood–Microsoft (MSFT) and Cisco (CSCO) –Apple has the potential to not only sustain this value but blow past it.”
First because Apple’s stock still is not expensive on traditional valuation measures… Second, Apple’s penetration of its key product categories is still relatively low… Lastly, for those focused on near-term catalysts, Apple should have plenty of good news to announce over the next six months. The iPad 3 is expected next week, the iPhone 5 should appear this summer, and Apple’s TV is expected in the fall… So it is not, actually, far-fetched to think that Apple’s value could eventually hit $1 trillion or more.
And more over, Cook is off to a great start so far. And Apple’s three businesses are humming, with another potentially big one thought to be on the way. And Apple’s stock just isn’t expensive relative to historical earnings, let alone expected future earnings.
Apple’s ability to defy marketplace gravity and to sustain its position in the highly rarified air of the world’s most-valuable and most-admired companies with one of the best-known brands in the world has aroused enormous interest in one very simple question. How did Apple do it? Bob Evans of Forbes says, “While most companies today would love to be able to claim growth rates in the high single digits, Apple’s revenue last quarter grew 73%,”
Evans asks, “How does it manage to create products that outperform competitors’? How does it create a booming retail business while other retailers are retrenching? How does it pounce on publicly available new technologies like Siri and turn that into a worldwide phenomenon? How does it rack up, quarter after quarter, financial results that are so impressive that they seem almost unencumbered by the same laws of physics and marketplace reality to which the rest of us mere mortals are subject?”
“Apple Tim Cook offered some revealing glimpses into Apple’s strategic thinking and core philosophies at a recent Goldman Sachs investors conference…”
10: Embrace your inner cannibal
9: Invest heavily in the right things while pinching pennies everywhere else
8: Pursue innovative distribution models - a.k.a. ‘think different’
7: Realize the iPad has triggered the onset of a post-PC world
6: Exploit the ‘halo effect’
5: The China factor makes it first among equals in emerging markets
4: Dazzle and delight your developer community
3: Don’t make customers pull their hair out
2: Repeat after me: ‘Great products trump everything else—including price’
1: Keep Steve Jobs’ vision burning inside terrific people
Apple retained its top rank in profitability and regained the top spot in mobile phone revenues, as per Asymco. Apple reached 75% of profit share, nearly 40% of revenue share and 9% of units share. In terms of revenues, Apple had 39% to Samsung’s 25%. Third was Nokia with 12.6% and fourth RIM at 8%. HTC only managed 5.5%, Motorola 4%, LG 3.3% and Sony Ericsson 2.7%.
The fact that Apple is pulling in so much money out of the entire industry really illustrates just how successful the iPhone has become. There’s another great graph here that shows just how much the iPhone’s market share has increased on multiple fronts since launch in 2007.
A few days back Indian media went on saying that Apple was looking at launching an Apple Store in India. Yesterday during Apple’s quarter earnings call, Tim Cook, simply rubbished the rumors and called out India as a small market, which is growing but has a small installed base to get a retail presence.
He went on to say that currently Apple is focusing on Greater China region and Cook thinks Brazil will be the next key market, without promising an Apple Store launch there either. So no Apple Store in India guys. Be happy with Imagine stores instead. haha…
Quick Update: Yesterday Apple posted its Q1 2012 financial results – 15.43 million iPads, 37.04 million iPhones and 5.2 million Macs sold. Apple posted quarterly net profit of $13.06 billion. iPhone represented a 128% unit growth over the year-ago quarter, while iPad reported a 111 percent unit increase over the year-ago quarter.
We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”
“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.
This is Apple’s best quarter ever. Congrats Apple.
The International Trade Commission has finally ruled in favor of Apple in the Apple vs. HTC patent lawsuit case. HTC is found guilty of violating Apple patent 5946647. 9to5Mac covered this news a while back:
A system and method causes a computer to detect and perform actions on structures identified in computer data. The system provides an analyzer server, an application program interface, a user interface and an action processor. The analyzer server receives from an application running concurrently data having recognizable structures, uses a pattern analysis unit, such as a parser or fast string search function, to detect structures in the data, and links relevant actions to the detected structures. The application program interface communicates with the application running concurrently, and transmits relevant information to the user interface. Thus, the user interface can present and enable selection of the detected structures, and upon selection of a detected structure, present the linked candidate actions. Upon selection of an action, the action processor performs the action on the detected structure.
HTC’s violating products – this ruling mainly involved the phone’s software – are subject to an import ban on April 19, 2012. The ITC says HTC will be able to continue shipping replacement devices for currently shipping products. Obviously, a ban on certain HTC products is a major blow to the company, and because this is software based, other Android device manufactures shouldn’t be to pleased.
The Verge also covered this ruling – HTC just revised its statement on the case, saying that Apple’s patent covers only a “small UI experience” and saying it will be completely removed from HTC phones “soon.” We’ll see how quickly that happens; any changes would have to first be deemed compatible with Android by Google and then approved and pushed to customers by HTC’s carrier partners.
We are gratified that the Commission affirmed the judge’s initial determination on the ‘721 and ‘983 patents, and reversed its decision on the ‘263 patent and partially on the ‘647 patent. We are very pleased with the determination and we respect it. However, the ‘647 patent is a small UI experience and HTC will completely remove it from all of our phones soon.
For its part, Apple is just repeating its previous statements on the case:
We think competition is healthy but competitors should create their own original technology, not steal ours.
Samsung is continuing with its anti-Apple campaign. This time a new advertising showing Apple fans still waiting on absurdly long lines for a new iPhone. This Galaxy S II commercial seems to exploit the line waiters theme all over again. Check it out:
Samsung user asks those in the line for the iPhone “You guys are still here?” then proceeds to laugh at them insisting that his Galaxy S II keeps all his content. “I have all my playlists right here, my music streams from the cloud and I have tons of places to buy my music,” he says to his iPhone toting friends who stare at his device looking bewildered.
Apple has finally confirmed that its biggest retail store, a 23,000 sq-foot space in New York Citys Grand Central Terminal will open on Friday, December 9th at 10:00 a.m. But this Grand Central store will not be open 24 hours a day. It will close at 9:00 p.m. on Monday through Friday, 7:00 p.m. on Saturdays and 6:00 p.m. on Sundays. Apple has agreed to a 10-year contract with the MTA:
Its clear by now that Apple Store review team at Apple cleared iTether app knowingly. This $14.99 app lets you have unlimited tethering from your iPhone’s 3G connection to your Mac or Windows computer. Cool!!! Found this tweet – @besweeet We were very clear with Apple what our app did. They asked us a bunch of questions and then approved us. Checkout this twitter screenshot:
9to5Mac first spotted this app yesterday – Apple has allowed an unlimited tethering application called “iTether” into the App Store. Install the app on your iPhone, install its complementing application for the Mac or PC, plug in your USB cord and you’re good to go.
Yesterday, Apple announced that is relaunch Tech Talk World Tour starting next month and will focus on iOS 5 and will roll through 9 major world cities. Will start off with Berlin on November 2 and end with Austin on January 23. The seats are getting exhausted, check it out here.
Only limited seats are available and therefore, Apple is giving preferential access to the events to developers who currently have one or more apps in the App Store.
I got this reply as I tried to register:
Your request was received.
Dear ***,
Thanks for your request to attend the iOS 5 Tech Talk World Tour in Beijing on December 5.
There are a limited number of seats at each venue and we’ll be giving priority to developers with an app on the App Store. Please hold off on travel plans until we’ve approved your request.
If your request is approved, you’ll receive an email confirming your admission.
To cancel your request, contact us.
Best regards,
Apple Developer Program Support
Here is the list of cities where this event will take place:
Berlin, Germany: November 2, Maritim ProArte Hotel Berlin
London, United Kingdom: November 7, Kings Place
Rome, Italy: November 9, Rome Marriott Park Hotel
Beijing, China: December 5, Renaissance Beijing Capital Hotel
Seoul, South Korea: December 8, Kintex
São Paolo, Brazil: January 9, Sheraton São Paulo WTC
New York City, New York: January 13, Millennium Broadway Hotel Times Square
Seattle, Washington: January 18, Hilton Seattle Airport and Conference Center
Austin, Texas: January 23, Austin Convention Center
As usual, Lines have started forming out of various Apple stores around the world to pick up Apple 4S. Macrumors goes on to share these pics as they say, in the U.S., Apple Stores will be opening at 8 a.m. local time to launch the iPhone 4S. Additionally, Verizon, AT&T, and Sprint stores will also be stocking the new device, but those retailers tend to get fewer units per store than Apple’s stores:
