Wouldn’t you just love to start your trading announcement with the words “We’re thrilled to deliver our best quarter ever, with revenues up 82% and profits up 125%”. That’s exactly what Steve Jobs of Apple has just done. Oh yes, and cash increased from $65.8b to $76.2b and gross margin was up from 39.1% to 41.7%. Yet again Apple has blown away all the analyst expectations. Even I, as a self-confessed long term Apple fan and long term shareholder (I bought at $10…) am rather lost for superlatives. Trading in Apple shares ‘after hours’ was halted when they rose 5% to $396.
Apple sold 20.3m iPhones in the quarter – up 142% and 9.25m iPads – up 183% (COO Tim Cook said on the analyst call “we are selling every iPad we can make”) . Even Mac sales were up 14%. As Apple pointed out, that’s 4x the growth rate for PCs in the same period so clearly Apple is gaining market share there too. iPod sales (50% of which were iPod Touch) were down 20%. Bluntly doesn’t everyone in the world now own one (or six as in our household)?
As usual Apple has issued very conservative guidance for the next quarter. Most analysts (like us) expect a new iPhone this Sept which might affect sales until the new product comes on line. But all this just shows that the never-ending string of Apple mega gizmo releases are not about to end anytime soon. And any fears that they might be running out of market in the depressed Western world, were countered with news that sales of Apple products in China were up “over six times” at $3.8b. Brazil, Mexico and the Middle East were also mentioned as boom markets for Apple.
If my previous articles on Apple – particularly those since 2002 - are anything to go by, I will get the usual crop of “It will all end soon”-type emails. At some point, those doubters will be right – for no other reason than the ‘Law of Large Numbers”. Clearly you can’t grow by 82% on annualised revenues of >$100b for ever! But the scope for future growth is still there. Remember that Apple is still predominately a ‘consumer electronics’ company. But just look at the rapid acceptance of both the iPhone and the iPad into corporates? Much of the Mac sales increase is coming both from the ‘halo effect’ and from corporates. That gives Apple a huge and currently under exploited market.
Bluntly I really can’t see much on the immediate horizon that will stop the Apple express train.