Apple Thoughts - News & Reviews on all things Apple

"As usual, Steve Jobs began his Apple music event keynote today by giving a breakdown of iOS devices sold to date - 120,000,000. It took them from June 2007 to June 2010 to reach 100,000,000 and only 3 months to add another 20,000,000 on top of that. Jobs also said they're activating new devices at a rate of 230,000 a day."

A not too subtle jab at Google when Steve said "if we counted upgrades in our numbers they'd be way higher than 230,000." Google of course had a response to this which was "The Android activation numbers do not include upgrades and are, in fact, only a portion of the Android devices in the market since we only include devices that have Google services." I guess Google and Jobs are interpreting data differently?

"Apple® today announced that it has sold over 1.7 million of its iPhone® 4 through Saturday, June 26, just three days after its launch on June 24."

Pretty impressive number, in just 3 days. "The most successful launch of an Apple product ever" according to Apple. No wonder I was in line 8 hours for mine. Pre-order is definitely the way to go. Although it was fun hanging out with all those people at the Bridgeport Apple store, I think I'll go the easy route next time.

"Hey, remember that iPad thing? Apparently it's still selling well despite all the iPhone 4 hubbub."

Selling well indeed, with over three million sold over the last 80 days according to Apple. This is only about 22 days since they reported selling two million of the devices. Oh, and they have over 11,000 apps available to use specifically on this hot selling device, not to mention the other 225,000 apps that it will also run on it that are normally used on the iPhone or iPod Touch.

"Apple's iTunes has widened its lead over traditional music sellers, capturing 26.6 percent of digital music sales in 2009, up from 21.4 percent in 2008 - the year Apple became the No. 1 destination for music sales."

Walmart dropped to 12.5%, while Amazon actually bumped up to 7.07%. As an interesting twist to digital music sales, Google has announced an music download service via the Android Market. They are going to make music available for sale and download in the new section of the Android Market called Music, but no details on when this will be available or what it is going to cost. As many Android phones as they are selling, with all the two for one deals cell companies like Verizon are using, I wonder how this will impact the market. What are your thoughts?

"The iPad may be partially or even primarily responsible for the slow demise of netbook sales, according to Morgan Stanley market (via Fortune) analyst Katy Huberty. In a report released Thursday for Morgan Stanley clients, the impact of the iPad is causally linked to the rapid decline of the netbook sales growth curve."

They point to a couple of issues to defend their premise. The first is that graph above, that shows the drop off in sales starting in December of last year and continuing through January when the iPad was introduced. The other is a March survey that said 44% of potential netbook purchasers were instead holding off to buy an iPad. Something is causing the drop off, and these sound logical, what are your thoughts?

"Apple has eclipsed Motorola as the biggest mobile phone maker in the US, while fresh research tells us iPhone-driven global smartphone sales grew 50 per cent in the first quarter. Meanwhile, over half a million iPhones sold in just five months in South Korea."

Motorola still made a profit, but Apple has surpassed them in numbers by selling 8.8 million iPhones compared to Motorola which sold 8.5 million. This is down 6.2 million phones since the same time last year, which is quite a drop, but its an even further drop from the Razr days of four years ago when they sold 46.1 million phones. Apples share in the smartphone market is roughly 16.4 percent for Q1 2010, up from 10.6 percent for the same time last year.

"Apple's same-store sales rose 8 percent in the March quarter of 2010, propelled by a 22.3 percent year-over-year increase in Mac sales, even though a MacBook Pro refresh did not arrive during the three-month period."

Much better news than last year when they had a decline of 21.9% according to the article. Non Mac revenues grew 1.2% fueled by iPads, which was the first growth in six quarters. If you like Apple products, the retail stores are the place to go to get the hands on experience for all of their products. And for those thinking about purchasing one of their products, in my opinion, it is an integral part of building the brand and expanding the reach of the product line.

"Apple posted yet another record quarter Tuesday for the March quarter, the company's second fiscal quarter. The company posted revenue of US$13.5 billion and a quarterly profit of $3.07 billion, or $3.33 earnings per share (EPS). The company reported higher Mac sales, and iPhone sales grew 131% year-over-year."

Apple sold 2.94 million Macs, up 33% from the same quarter a year ago, and also sold 8.75 million iPhones and 10.89 million iPods. This of course did not include the iPad, which will end up in the next quarter report, but it was the best non-holiday quarter ever since revenues were up 49% and profits were up 90%.

And in after hours trading, Apple posted an increase of 6.71% to close at $261.01 USD per share based on the strong earnings report.

"Apple announced today that it sold 300,000 iPads on the first day."

That is about 1/2 of what the total would be according to Gene Munster from Piper Jaffray. The press release details the sales on opening day this past Saturday, and it included news that customers had downloaded over 250,000 books via iBooks as well as about 1 million iPad Apps. 

"New retail sales data shows Apple has continued to have strong Mac and iPod sales at the start of 2010, with February's numbers showing significant year-over-year growth."

iPod sales were also up 5% in January and 10% in February from the same time last year. They are calling 2010 the "Year of the Mac" over at Piper Jaffray, estimating sales for the March quarter in the 2.8 to 2.9 million range, and list a target price of $284.00 USD for Apple Stock during the next 12 months.

"Bernstein Research's Toni Sacconaghi issued a 13-page report last week in which he estimated that the iPhone's gross profit margins were an astounding 57.8%. Those margins tower above Apple's competitors with RIM estimated to have 43% profit margins, Nokia 33%, Motorola 32%, and HTC 31.7%."

And while it may decline in the future per The Street, Saconaghi thinks it will increase since prices have increased since Q3 2009 to Q1 2010, from $588.00 USD to $638.00 USD, and demand doesn't seem to be subsiding. He also sets a target stock price of $250.00 USD. Well, let's see what June brings.

"Though Apple carries just 5 percent of the total worldwide home PC market, the Mac commanded 10.5 percent of the market's dollar share during the holiday buying season."

So having a strict pricing structure appears to make sense. If you split the markets, in the US the market share is around 10 percent while the dollar share is about 20 percent, compared to Europe where Apple has 6.4 percent marke share but a 14.2 percent dollar share. Along with this news is that the educational market is also coming back after a decline. Last quarter Apple had 20 percent market share and a 40 percent dollar share of that market.

"According to research firm Gartner, Apple shipped 182,000 machines in the fourth quarter of 2009, earning the company a 5.5 percent total market share in France. Apple's emergence in fifth place came as a result of 43.5 percent year-over-year growth in the market."

Not only are they succeeding in France, but all over Western Europe with increased shipments during the fourth quarter of 2009. Worldwide, profits for Apple increased 50% on sales of 3.36 million Macs, which was the best quarter ever for Apple.

"Warner Music revealed on Tuesday something we've all long suspected: music sales have witnessed a growth slump on iTunes since the record labels pushed Apple to implement a variable or tiered pricing model."

Price goes up, demand goes down, not sure why they thought it would be any different with music than other goods in the mostly free market economy they operate under. Warner saw a 50% decline in revenue for their quarter ending in December 2009 so perhaps they will rethink their pricing. I have my doubts based on how they have done things in the past. I'm interested to see how this will work in the e-book field over the next year though.

"Apple took advantage of a rebounding PC market this past holiday shopping season, with the Mac maker's U.S. sales rising 31 percent year-over-year to 1.5 million units. That was good enough to keep its share of the domestic pie above 7 percent, despite an influx of budget netbook PCs that flooded the market."

Check out the Toshiba growth rate, a whopping 71.5%! HP isn't bad with 45.1% and Apple in at 3rd on the growth rate with 31.0%. Even with the growth their market share puts them in 5th place overall. The article is a good read for background on how the industry as a whole performed.

"Holiday spending has seen sales of Apple's Magic Mouse soar. According to a report by NPD and covered today by AppleInsider, last month saw a twofold increase in Apple's share of domestic mice sales. By the end of November, Apple had captured 10 percent of the market."

Image Credit: SlashGear

However, that doesn't mean the author is a fan of the Magic Mouse. How do I know? This partial quote, describing his user experience, pretty much sums up his feelings: "transforming my hand into a deformed claw of knotted knuckles and cramp." Makes you want to go out and buy one doesn't it? I still have the Mighty Mouse, Bluetooth version, and haven't decided if I want to get this one. I still may, based on a few minutes in an Apple Store when I played around with it and it does everything I needed it to do. One thing is for certain, it certainly seems to be popular and you can't dispute that it does have a great form factor.

"Apple has achieved almost 10 percent of the entire French mobile phone market in 2009, according to leading French newspaper, Le Figaro."

The article from Le Figaro states that Apple has sold between 1.8 million and 2 million iPhones in 2009. This nice number gives the iPhone about 8.5% market share in the French mobile phone market. This translates to about 20% of the value of the same market. Making it available on so many carriers certainly has it's advantages, right Apple?

"U.S.-based AT&T isn't the only wireless carrier to see its network come under heavy strain due to the popularity of the iPhone. Meanwhile, Apple's official provider for the handset in China this week reportedly reached the 300,000 unit sales mark."

O2 finally eased the burden, which started this past summer, after investing $48 million USD in their network and adding 200 mobile stations in and around London, which is where the network crashed. But in China it is all good for the iPhone as they have sold over 300,000 units since it was introduced a couple months ago. No word on how the network is handling the increase in iPhones, but since they have most of the internet censored I doubt they have much of a burden on their network.

"It's big in Korea, it's probably big in China's grey market, and the iPhone continues to be big in Japan. According to a report [JP] released by Tokyo-based research company Impress R&D, the iPhone has captured a whopping 46.1% of the domestic smartphone market."

Launched in Japan in the summer of 2008, the 3G has just under 25% of the market, while the 3GS hit 21.5%. They now have a user base of 3 million which is 10% of the global userbase according to the article. SoftBank Mobile has been pretty aggressive with their advertising, something that isn't happening for the Blackberry or Android. Pretty impressive though, almost hitting 1/2 of a market that you didn't exist in a little over a year ago, especially in a place like Japan that is known for being ahead of the curve when it comes to wireless technology.

"iPhone sales in South Korea appear to be off the charts, with local carrier KT claiming "some 90,000 new iPhone subscribers," so far. These figures include the 53,000 iPhones pre-ordered prior to launch, and is prompting the carrier to ensure it ties a deal for the next-gen iPhone. The device went on sale in the country on November 28."

Apple has secured about 5% of the market since debut, and the company expects to sell about 700,000 iPhones by the end of 2010. In comparison, Samsung has 50% of the market and LG has just over 22%. In a related story, the company wants to expand the line and has asked Apple for even more iPhones.