I started posting an iPhone-related recap of Apple's quarterly fiscal earning conference calls back in early 2009. Back then, the calls were about all sorts of topics, and I thought it useful to tease out the iPhone-related angles from the call. But over time, the calls have become more and more iPhone-centric as the iPhone, and now the iOS, have become so much more important for Apple. We reached a turning point yesterday because it appears that around half of Apple's quarterly revenue came from iOS products. Wow!
If you want to hear the full call yourself, you can download it from iTunes or you can read the transcript provided by Seeking Alpha. You can also read Apple's press release here. Here are the iPhone-related highlights for the quarter that struck me as interesting:
- Apple's total revenue for the quarter was $15.7 billion. The company recognized $5.33 billion in revenue from iPhone sales (and related sales like iPhone accessories and carrier payments). The company recognized iPad and iPad-related revenue of $1.27 billion. Together that is $6.6 billion, which was 42% of Apple's revenue. Apple also had $1.5 billion in iPod revenues, which was 9.6% of Apples revenue. Apple didn't reveal what part of that 9.6% was iPod touch units (running the iOS) versus other iPod models except to note that there continues to be a shift towards iPod touch sales and away from other models. If those iPod touch sales were 8%, then Apple is now getting 50% of its revenue from iOS devices. It may be that the iPod touch sales are not quite that high, but the point remains the same — around half of Apple's revenue now comes from the iPhone and its siblings.
- And it's not like the percentage increases are just the result of declining Mac sales. Apple said that it sold 3.46 million Macs last quarter, another quarterly record for Apple (topping the previous high by about 100,000 units).
- Apple sold 8.4 million iPhones last quarter, 20% of which (1.7 million) were the iPhone 4, even though it only became available on June 24, 2010 and the quarter ended on June 26, 2010. It will come as no surprise that Apple called the iPhone 4 launch the most successful product launch in the company's history.
- One analyst asked whether Apple causes iPhone (and other product) shortages during the initial days in which the product is on sale just to create buzz. Tim Cook, Apple's COO, strongly disagreed. "In terms of the new product, we do not purposely create a shortage for buzz. I’m not sure where that comes from, but that is certainly not our objective. We would like to fill every customer's order as quickly as we can. The demand for iPhone 4 is absolutely stunning. And we’re working very hard to catch up with demand and I can’t predict when that will occur that I can tell you that everyone is working very hard to do it. ... [L]et me be very clear on this. We are selling every unit we can make currently."
- Combining the sales to date of the iPhone, iPad, and iPod touch, Apple says there are now 100 million devices running iOS. By my calculations from past earning call announcements, almost 60 million of those are iPhones. We know that 3.27 million iOS devices were iPads (because that is how many Apple said that they sold this past quarter and the iPad started selling on April 3, which was during this last fiscal quarter). That leaves around 36 million of the iOS devices sold as of June 24, 2010 that must have been iPod touch devices. Going forward, it will be interesting to see how this mix changes.
- Apple said that there are over 225,000 apps in the App Store, and over 5 billion apps have been downloaded, resulting in Apple paying over $1 billion to app developers.
- Apple estimates that it will cost $175 million to provide cases to iPhone 4 owners. Apple CFO Peter Oppenheimer said that "our most important objective there is to take care of every customer and delight them."
- The iPhone is doing well in corporate America. More than 80% of the Fortune 100 are deploying or piloting the iPhone, and that percentage is over 60% in the Fortune 500. And 50% of the Fortune 500 are deploying or testing the iPad.
- When asked about the acceptance and rejection of new iPhone apps in the App Store, Tim Cook noted that "the vast majority of Apps are retrieved within seven days of their submission" and "many of the apps that aren’t approved have bugs in them, and are eventually resubmitted and approved."
- One analyst asked Apple when FaceTime (the iPhone 4 video chat software) would be available on the Mac or Windows PCs. Tim Cook punted, saying merely: "I want to make sure that we get to all of the financial related questions today. So I’m going to hold that one for another day."
- One analyst asked about the future of Apple's exclusive relationship with AT&T in the U.S. Tim Cook gave a non-answer: "I would say that we’re very happy to be a partner with AT&T, and you know, they have been a first-class partner and have really pioneered the smart phone growth from a network point of view in the US, and that’s all I have to say about that."