Apple Delivers Positive Earnings and Notes that the iPad grabbed a Staggering 94% Market Share in Education
With all of the critics were expecting a poor iPhone quarter, Apple once again foiled their negative forecasts and enjoyed a great iPhone quarter. Apple sold a record 33.8 for the September quarter, compared to 26.9 million in the year-ago quarter. Apple's Tim Cook delivered a knock out statistic in iPad sales in education and more during Apple's financial conference call held this afternoon.
Apple noted in their press release that they sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter which was a little flat. Other stats included selling 4.6 million Macs, compared to 4.9 million in the year-ago quarter.
Tim Cook, Apple's CEO stated that "We're pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones. We're excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS."
Conference Call Tid Bits
On Education: A few tid bits that surfaced during the conference call included Tim Cook stating that Apple's iPad holds 94% market share in education. Cook was being asked if Google was making headway in education when cook hit them with the staggering statistic that threw the analyst of course. Cook also confidently noted that it was Apple's largest quarter for education ever coming in at one billion in revenue. Apple's iPad sales alone grew 22% in education and even the Mac grew 8% in a market that's dwindling.
Debate over new product "Categories" Time frame to Market: There was a bit of disagreement in one of the questions where an analyst was basically stating that Cook had promised new products in new "categories" for the end of 2013. Tim Cook stated that this wasn't what he said at all and there was some doubt in the air as to what was actually stated back on January 23, 2013. So we dug back to that conference and this is what actually transpired for the record:
Gene E. Munster – Piper Jaffray, Inc: Hey, good afternoon. Tim, I just wanted to confirm, did you mention in your prepared remarks that something about new product categories or did I not hear you correctly?
Apple CEO Tim Cook: I did, Gene. I said that one of our areas for growth are potential new categories, and we're very excited about those.
Gene E. Munster: And that would presumably be kind of in the next year?
Tim Cook: Well, I didn't announce the specific timeframe, but… [and the transcript abruptly ends on that point].
Tim's sharp memory wins the day.
On Order Backlogs: Cook confirmed that the iPhone 5S backlog is significant but that supplies are building each week and that the iPhone would be in over 100 countries by year end. The same was true for iPad's with Retina displays though no real update was provided on that front. Cook noted that DRAM will remain high this quarter while NAND costs will be flat while other commody costs will fall this quarter. You could read a little about the tight supply getting better by year end here.
Maybe I sneezed and missed the question, but I didn't hear anything on the conference call about the timing of the iPhone debuting with China Mobile. Maybe I missed the memo, because that should have been a high priority question and it wasn't. Perhaps the rumors sufficed. Cook did say however, that Apple was trying to expand the reach and distribution of the iPhone in China outside the major cities like Beijing and Shanghai.
New Unknown Acquisitons Made: During today's conference, Tim Cook let it be known that Apple completed 15 acquisitions in fiscal 2013 which amounts to one acquisition every 3-4 weeks during the year. The Apple blogospher have caught eight of those acquistions which means that there are still 7 unaccounted for. The ones we know of today include: WiFiSlam, Cue, Passif Semi, Embark, Locationary, HopStop, Matcha and AlgoTrim. What else did Apple invest in? Only time will tell.
Apple Providing Strong Guidance for its Fiscal 2014 First Quarter:
revenue between $55 billion and $58 billion
gross margin between 36.5 percent and 37.5 percent
operating expenses between $4.4 billion and $4.5 billion
other income/(expense) of $200 million
tax rate of 26.25 percent
To review Apple's statement of operations, balance sheet and cash flows see Apple's press release issued this afternoon.
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