Apple Quarterly Earnings

by dovetailedlife

Like the typical publicly traded companies, Apple hosts an earnings call every quarter to announce revenue and the like. Typically, these are interesting but not phenomenally breathtaking because they rarely announce anything that is unexpected or whatever. You can listen to this entirely here.

What’s most interesting, the man himself showed up on the call today. Steve had some interesting things to say as well. He came out, claimed the superiority of Apple and then shot down anything and everything Android. He also provided some insight into the future of the tablet market.

Some of my favorites (as paraphrased by MacRumors):

I couldn’t help dropping by for our first $20+ billion quarter.

What about Google? Apple activates 275,000 iOS devices per day, sometimes over 300,000. Unfortunately, no solid data on how many Android handsets shipped per quarter. Gartner says 10 million in June quarter, and we wait to see whether iPhone or Android won in the most recent quarter.

Discussing Google claiming Android is “open”. We find this disingenuous. Android is fragmented.

“TwitterDeck” (probably TweetDeck) revealed that it had to contend with over 100 different versions of Android in developing its app. Compare to Apple with two different versions.

Amazon, Vodafone, and Verizon have announced creating their own Android app stores. A mess for users and developers. Contrast with Apple’s integrated App Store.

Commenting on avalanche of tablets heading to market. Just a handful of credible entrants. Almost all use 7″ screen, compared to iPad at nearly 10″ screen. 7″ screen is only 45% as large as iPad’s screen. Hold an iPad in portrait view and draw a horizontal line halfway down. What’s left is a 7″ screen…too small. There are clear limits to how close elements can be on the screen before users can’t touch accurately. We believe 10-inch screen is minimum necessary.

All of these tablets are using Android, but Google is telling them it isn’t ready for tablets and to wait until next year.

Q: How do you think about the iPad opportunity a year or two down the road in terms of size of business?
A: Jobs: iPad is clearly going to affect notebook computers. It’s a question of when, not if. Already seeing tremendous interest from education, and surprisingly, business. We haven’t been pushing it with businesses, but they’re tearing it out of our hands. We’ve got a tiger by the tail.

Q: Could iPad be second-biggest business behind iPhone?
A: Jobs: I try to report, not predict. But it’s already outselling Macs.

Q: You are the tablet market right now. Like RIMM with the smartphone, can you hold onto market share?
A: Jobs: We have a hard time seeing the strategies of our competitors. They’re not matching us in pricing, and lack of Flash doesn’t seem to be causing us difficulties. We’re out to win this one.

Q: Steve, you believe Apple should be able to outship Android when looking at all devices. What are the key risks you are managing?
A: Our goal is to be the best. We’re not the biggest…that’s Nokia. We admire them, but don’t aspire to be them. We want to make the best devices. Android is our biggest competitor. They outshipped us in the June quarter when we were caught in a transition, and we’ll see about the September quarter. We’ll be competing with them for quite some time, but we have very different approaches and we believe in ours. We think that’s the winning approach in the end.

Q: Aspirations for iPhone and iPad? Looking for a Mac-like model of lower market with higher prices and quality or iPod-like market dominance and low pricing?
A: Jobs: Nokia makes $50 handsets. We don’t know how to make great handsets at that price. So our goal is to make great breakthrough products but also drive costs down. As you know, we have low share in phones, and high share in tablets. But we don’t think about it that way. We’re not not making a 7-inch tablet because we don’t want to hit a lower price point. We’re just believe it’s too small to hit the user experience people want. When we make decisions, it’s not about cost, it’s about value when you factor in the software. We’re all about the best products at aggressive prices.

Q: Where is your primary advantage in tablets?
A: Jobs: We’ve designed everything from batteries to enclosures, and we’ve learned a lot from our prior experience. We know how to design and build in an efficient way. Others will have to source components from middlemen, while we design our own and build them directly.

The only issue with these paraphrases is that they don’t quite exhibit the passion in his voice when he talked about these things. Wow. Give it a listen.

Whatever you say, it all seems to be working so far.

-B

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