Yesterday, Apple released the results for its 2013 fiscal fourth
quarter (which ran from June 30, 2013 to September 28, 2013) and held a
call with analysts to discuss the results. This is typically a
transitional quarter for Apple considering that so many sales take place
in the October to December quarter that contains holiday sales. That was especially true this year because there were no new iPads for sale last quarter and the new iPhones did not go on sale until September 20, 2013 — enough to capture some of the early sales, but most new iPhone sales will occur in the 2014 fiscal fourth quarter that began on September 29, 2013. Nevertheless, it was yet another profitable quarter for Apple, with
Apple announcing quarterly revenue of $37.5 billion. $1.5 billion more than the same quarter last year, and
quarterly net
profit of $7.5 billion, down slightly from the $8.2 billion in profit this time
last year. If you want to get all of the nitty gritty
details, you can download the audio from the announcement conference
call from iTunes, or you can read a rough transcript of the call prepared by Seeking Alpha. Apple's official press release is here. Here are the things said on the call yesterday that I think would be of interest to iPhone and iPad users:
- Apple sold 33.8 million iPhones, which is pretty impressive considering that, as noted above, the new iPhones didn't come out until the very end of the fiscal quarter. That's the largest number of iPhones that Apple has ever sold in a fiscal fourth quarter. Apple CFO Peter Oppenheimer said: "Phone sales were ahead of our expectations and grew stronger year-over-year in each of our geographic segments." Put the numbers together, and Apple CEO Tim Cook said that Apple sold 150 million iPhones in fiscal 2013. By my count, as of September 28, 2013, Apple had sold over 421 million iPhones.
- Oppenheimer noted that a lot of folks are using iPhones to get work done. He said: "iPhone continues to be a key productivity tool for organizations around the world, aided by apps from the App Store as well as those custom built for internal use. In fact, nearly 35,000 companies representing millions of employees worldwide are building custom apps that address specific workflow improvements for their iPhones and iPad users."
- Cook said that only a little over 50% of the global handset market is currently using a smartphone. He said that currently the smartphone market is about 1 billion units worldwide, and by 2017 Apple sees that number at 1.7 billion. Thus, there is room to sell more iPhones in the future to new users, not to mention the upgrades to current users.
- Cook noted that the new technology in the iPhone 5s — including the 64 bit processor and the fingerprint sensor — is just the "front end of a long road map." So Apple has big things in store for this technology in the future. Good to know.
- Apple sold 14.1 million iPads in the fiscal quarter. That's roughly the same as the 14 million sold this time last year, but I'm sure that many folks (like me) were waiting for the new iPads to go on sale this Friday. Cook said that Apple sold 71 million iPads in fiscal year 2013. By my count, that means that as of September 28, 2013, Apple had sold over 169 million iPads.
- Cook said that the worldwide tablet market is about 225 billion units this year and will increase to over 400 million in 2017. So once again, there is a lot of room for growth in sales to new users, not to mention the upgrades to current owners. As Cook said: "We continue to view the tablet market as huge. We see it as a large opportunity for us. ... I think it's going to be an iPad Christmas. But we'll see, we'll report the numbers back to you in January, how we did, but we are pretty confident."
- Oppenheimer said that over 60 billion apps have been downloaded from the App Store, and Apple has paid over $13 billion to app developers — half of that in just the last year.
- Oppenheimer noted that Apple currently has $146.8 billion in cash and securities. Good to know that the company a little set aside for a rainy day. Or for that matter, a rainy decade.
- When will Apple come out with something new, such as a rumored iWatch or other wearable accessory? Six months ago, Cook announced that Apple was working on some "exciting new product categories." When asked about this yesterday, Cook was vague (no surprise), but did confirm that something new is coming: "In terms of new product categories, specifically, if you look at the skills that Apple has from hardware, software and services, and [an] incredible app ecosystem, these set of things are very, very unique. I think no one has a set of skills like this. And we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. So we're pretty confident about that." Similarly, in the prepared remarks that Cook read at the start of the call, he said: "We continue to be very confident in Apple’s future and we see significant opportunities ahead of us and both current product categories and new ones."
- What do the iPhone and iPad mean to Apple as a whole? They are incredibly important. As noted by Macworld, iPhones accounted for 52% of Apple's revenue this quarter and iPads accounted for another 17%, so that's 69% of Apple's total revenue. And that's before you even start counting App Store sales and other iOS-related revenue. Apple still makes money selling Macs and to a much lesser extent iPods, but Apple is far more of an iPhone/iPad company than a Mac company.
