Awesome Q3 results from Apple!
 

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Anyone else catch Apple’s Q3 announcement conference?
I am absolutely awed by those results!

MacRumors has a nice summary, including the Q&A exchange.

Any thoughts on what the results and trends mean for Apple? And for us users?

Here's the part I like:

"Apple shipped 1,764,000 Macintosh(R) computers, representing 33 percent growth over the year-ago quarter and exceeding the previous company record for quarterly Mac(R) shipments by over 150,000."

This doesn't suck. :D

My bosses had a meeting with myself and the guy in charge of the macs (who I work with) and they are discussing putting more macs in the schools I work for. Really, they are mostly interested in laptops. Which one of my bosses brought up the point that Apple is really the only one kicking ass in laptop sales right now, in fact for all of 2007.


I was told that once some of the higher ups (people in charge of spending lots of money) actually got to sit in front of a mac and see what it could do out of the box they thought it would be perfect for educational usage. I have to concur because the Mac offers a lot of software out of the box that can be used to gain professional skills that can carry over into the professional world of digital photography, digital video, dvd authoring, recording digital audio, etc. Granted all the iApps + Garage band are very basic compared to the professional level counter parts but there is a good side to kids having access to this kind of stuff. They are already learning the basic functions and applications of the said technology so if they were to later on pursue a higher education or a career in one of those fields they would already have practical basic knowledge and more important they would know how to apply it.

I still wish they made a basic desktop Mac that you could pick and choose your own parts. But hey, maybe one day.:D

You mean like Dell?
Don't hold your breath.

ya ya ya most people on this forum disagree with me on that point, but hey I can agree to disagree that's no biggie.

The problem with dell is they suck, bottom line. Gateways suck too. In fact the only two PCs that are made by a company that I like are Powerspec and HP business class. I gotta hand it to HP their business class desktops are really decent and decently priced for what you get. I support about 6 to 7 thousand HP desktops and laptops at work, and I get stuck doing a lot of the warranty repair on them. As far as PCs go, I don't mind them and I have to fix them when they break.

Powerspecs are a smaller company but build their systems barebones like. Giving you what you need with minimal bloated software, and its built generically. So if a part goes bad out of warranty 99% of off the shelf computer parts fit right in the case and work out of the box with out a hitch. That is a very nice luxury to have IMHO.

For the record I hate repairing gateways, and Dells.

Also does that reflect total sales Hayne or laptop sales?

The graph I posted was a comparison of stock prices (from Google Finance: http://finance.google.com/finance?q=aapl). The point is that Apple is not in the business of making cheap (as in as cheap-as-possible, low-end) computers. One of Apple's enabling advantages is that they control everything in the machine.
And the graph shows that their stock-holders (the ultimate bosses) like it that way.

So it's not a question of people here agreeing or disagreeing, it's that Apple's business model doesn't involve you being able to interchange parts to build your own OS X machine.

Oh well I never stated I want to buy parts off the shelf, I just want a compromise from an iMac to a Mac Pro. I don't want/need dual xeon processors, its over kill and I don't like the idea of all in one machines. I do want upgrade ability so mini is out of the question. I want a Desktop with a C2D chip an Apple motherboard and the ability to toss whatever HD, amount of RAM and video card I want in it. Which you can pretty much do anyways, so I don't see the big deal in that with the exception you wouldn't have to pay for the mark ups. Sure I guess there is a downside but I don't see quality control going down. i remember mac clones, heck I have personally worked on some and repaired them. The main reason why apple stopped letting third party companies make hardware for them was because they didn't like the competition. I am not asking for an asus mac motherboard, I want an apple computer with apple components. But lets face it, a video card is a video card and they use the same in both platforms and the same goes for RAM and hard drives, and even optical drives. There really is no physical difference anymore these days, besides some minor firmware changes.

Also those do not reflect computer sales Apple is no longer a computer company they are something in their own category. I am sure that the itunes music store, and the iphone, and the ipod had a lot to do with that. Dell just sells computers and servers. They don't run the portable music business like apple nor the cell phone business like apple just did.

However, I still stand by that Apple makes some of the best damned laptops. I just like a bit more variety in my desktop and its my opinion.

You have valid points too, and I agree apple does have a bit of a higher quality control.

You are making my point. Apple's mandate is to make as much money (for their shareholders) as possible. They have optimized their business model to do this. Allowing others to take part of their sales is detrimental to this business model. Selling cheaper computers to people who would have been willing to buy a higher-end machine (even if they don't need the computing power) is detrimental to this business model.
Total profit = number of units sold * average profit on each unit
Apple business model tends towards keeping the second number higher rather than the competition - by avoiding the low-end market that has a lower profit margin.

Sure, but Apple still gets about 60 % of its revenue from Macs (http://www.macrumors.com/2007/07/25/...-quarter-2007/)

For interest, here is the graph comparing Apple & HP stock prices over 5 years:

Dell vs. Apple
 

I generally prefer Apple to Dell as well, but neither is perfect and while Apple has some excellent product offerings, Dell really works with their customer to get them exactly the system they want. And because of their much greater scope they can readily provide systems that fit every niche. Apple's "5 sizes fit all" matrix of Macs is somewhat pathetic when you consider, since the move to Intel, how easy it should be ship a much greater variety of hardware.

Bear in mind that when Jobs took over at Apple and simplified the product line, Mac shipments were dwindling to 3 million a year... now shipments are approaching twice that low point, and there are potential sales in the 10s to 100s of thousands being lost at the margins because of the limited variety of Macintosh systems shipping from Apple. Ultraportable, tablet, low end expandable desktop are all prime examples where the matrix could be extended without significant cannibalization of existing sales.

It's also interesting, if you work with Apple vs. Dell sales and support when you have any kind of scale yourself, to see how much further out of their way Dell will go to keep your business vs. Apple. Dell has to fear you switching to HP, Lenova, or any of the smaller boutique PC vendors, whereas Apple knows you have one choice if you want a Mac; and if (for some insane reason) you just want to run Windows on your Macs then you might as well go with Dell.

Disclaimer - I am familiar with an organization that does significant volume of shipments and Dell has done a fabulous job of assisting with shipment inventory and asset management; Apple, on the other hand, can't seem to understand why this organization would want to know not just that they shipped x computers on y day, but also the serial numbers.

Did you know that in New York City, Dell actually resells Apples to municipal organizations because Apple can't seem to get this piece of their business right? It is a little disconcerting, for example, when you call Apple and the sales don't seem to know what assembly and shipping is doing. It's almost as preposterous as when Microsoft claimed during the antitrust trial that they didn't know how much money they made from selling Windows OS and Office applications!
g=

And I'm sure you will see these if and when Apple determines that their introduction will in fact increase Apple profits.
(Surely you don't presume to know Apple's business better than Apple itself?!)

But note that merely avoiding cannibalization of existing sales is not sufficient. Introduction of new products needs also to be balanced against possible risk to the brand. E.g. selling an extra few million low-end Macs might add to profits initially but the inevitably less-than-stellar user-experience with those low-end machines might damage Apple's image and hence lessen profits in the long term.

We can all agree on one thing here though, and that is that Apple could market and sell a ketchup Popsicle to a woman wearing white gloves and ice to Inuits because of how they market to pop culture. Look at how well the ipod and iphone have done and in my professional opinion they aren't always the best products, however their marketing is far superior. They create items that become buzz words almost immediately and catch the eye of the media, I mean they don't have to even pay for the kind of exposure they get. Every freaking magazine and ever news channel has put out tons of stories on Apple, because they are hip. They set trends.

So its not like it is impossible for them to make a mid range tower computer with options of adding a low end or a high end video card and what size of hard drive and what amount of RAM they want.

In fact it would boost their sales, and especially if they marketed like its the next best thing over a PC. It would work and everyone knows it. They can easily make a sub 1000 dollar desktop that gives the user options to choose their own HD, RAM and video card and still make profits off of it. Still raise their stock price and still generate tons of sales. I mean this is apple, and its how the company works now.

Step back to about circa 2001 when Apple was struggling and their stock was worth a measly 12 USD per a share. I remember discussing how I should buy as much stock as possible with my co worker at the time because there was no way it was going to go any lower and with OS X in it's infacy I suspected it would only go up from there. Of course I had no idea what an iPod was at that moment, but hey I was thinking what everyone else was. This is probably going to be a good investment. Too bad I was 20 or 21 at the time and pretty much broke, otherwise I would have tossed some money into Apple.

Sure Apple's stock has shot through the roof lately on how much it has gone up, but at the same time some years ago they were one of the lowest.

Apple marketing is great and all, but I think it's overstated. By that analogy, history shows that Microsoft could sell 20 times more ketchup popsicles and ice than Apple.

Hefty increase in profit margins
 

Indeed they are. Here’s another impressive tidbit from their Q3 summary:

In other words, even as sales are going through the roof, significantly increasing Apple’s market share, the team in Cupertino is also making a huge increase in profitability. Read: raking in money. That gives them considerable freedom and maneuverability on the international arena, in addition to product development.

My wager is that "international sales" will account for 55–60% within the next three years. We will see a growing Apple presence in many countries, with the establishment of far more Apple Stores.

Recurring iPhone profits
 

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There is another fact that will impact markedly on Apple’s future financial reports:

Apple is the first mobile phone producer that has ensured a recurring income from their product. That they’ve forced carriers to agree to revenue sharing is absolutely amazing!

That’s guaranteed pure profit stretching into the future for the full life of every iPhone!!

Let’s say the reported "kickback" from AT&T is correct: $9 per month. And let us assume they get in place similar contracts in other countries. Let’s also say Apple achieves their goal and sells 10 million iPhones by year’s end 2008.

In recurring annual profits, this translates into: 10M x $9 x 12
= $ 1.08 billion

That’s the bounty in 2009, 2010, 2011... without even selling one more iPhone.

That's because Dell can't differentiate themselves any other way, and Apple's OS gives them most of the differentiation they need.

If you can't make a better product, all you can improve is distribution and price. Multiple configurations sounds great on paper, and Apple certainly could/should offer something between the iMac and the Mac Pro, but in Dell's case, one of their computers is hardly different from one of HPs, let alone another slightly different version of Dell's model.

If Apple were to double the number of models they sell it wouldn't increase sales enough to offset the lower margins that would result from higher expenses. It might even hurt sales as consumers tend to have difficulty making decisions when they have too many options. This doesn't hurt Dell because they sell mostly to IT departments that understand and care about the miniscule differences between a Dell PrecisionTM 490 and a Dell PrecisionTM 390.

I predict that Apple will continue to lead on with laptop sales over other companies for the remainder of the year. Especially with Leopard coming out in a few months. How many people are holding off till Leopard?

the iphone is the new hotness and will continue to sell all over the board and when they release it in europe and asia they will sell lots as well, or well it will at least be pirated and imitated in asia.

Have you ever watched MS's advertising? It has always been the worst ever, let me give you some examples:

http://www.youtube.com/watch?v=kv96_rZTMkM

http://www.youtube.com/watch?v=1BN-XQk6yIk

and my favorite:

http://www.youtube.com/watch?v=kvbWLfr-Z4s

Here go some Apple ones

This one is pretty awesome
http://www.youtube.com/watch?v=OYecfV3ubP8

well this one was bad
http://www.youtube.com/watch?v=ZZ6u9lvnQ-s

http://www.youtube.com/watch?v=XyWHN5Dru4Y

http://www.youtube.com/watch?v=KtqHXcEfVbg

http://www.youtube.com/watch?v=nHJkA...elated&search=

I mean clearly Apple is better at advertising than just about any other company. What they did back in the early 90s everyone else is still doing, and they have moved on. However, I do like those HP commercials where they have the picture in picture with the frame, it is for their digital photo equipment.

http://www.youtube.com/watch?v=8s4O3...elated&search=

I think they are shot very well.

But advertising is only a small part of marketing.

MS benefited from the perception of DOS as a 'business' operating system that IBM gave it early on, and they marketed Windows as a business OS as well. They targeted IT departments who helped market the OS to business despite its numerous egregious flaws. Apple was left with what where initially small niche markets: graphic artist/desktop publishers and the home user.

It's easy to look at Apple's marketing today and think that it's superior now that they're reaping the benefits of catering to the end users needs for thirty years. For more than twenty years it looked to most business people like that was a poor strategy. Even today, many 'business' types, unable to comprehend the loyalty their customers display, attribute Apple's success to a 'cult' following.

It seems to me that Apple's marketing is better for both the company and its customers, but not because of the advertising. I do like the I'm a Mac ads though!

Look at it from this perspective. At my work we have our respective apple rep, MS rep, HP rep, Gateway rep, third party resellers and vendors, rep from Panasonic (they actually flew in from japan to give us a demo on a new digital projector that isn't even being sold in the US yet) so on and so forth. We spend millions and millions of dollars each year on technology for the school system I work for. I mean heck one of the high schools has a full blown render farm with render boxes on a fiber VLAN. Each one of those boxes is worth about 25K each, and we have three of them for their farm. This is a freaking highschool we are talking about here.

That being said, I have sat down with countless meetings, from countless reps and they are all the same. They are sales people, and they usually bring along one engineer type person, who is granted very smart with technical stuff but again very biased. They always want you to switch to their platform regardless of what you are asking or regardless of what you are trying to accomplish.

The IT departments don't care about what does what, or who makes what look cool on the TV. They care about functionality and how it is applied. Cost effectiveness comes in to play as well.

Apple has sales that are going up and up, but are they selling more total units over PC companies? Then take into account there are tons of MS PC resellers and manufacturers, but there is only one apple.

I mean really if you want to compare it, total the sales from all PC makers and then compare it to Apple and that will give you a fair market share. If Apple ever does catch up and get a hold of lets say for example a 30% market share they could probably afford to lower their prices to expand their sales and still maintain profits because of the much more expanded customer base.

That's not what they're about, and maintaining profits is not the same as maintaining profit margins, which is what's important. If you go the high volume, low profit route, you end up like Dell, trying to create a perception that you offer something unique by creating many marginally different models of the same thing. That's fine if you're just selling parts, but when you're trying to develop new systems to do new things, quality matters.

The only reason I'd like to see Apple dominate the market would be to crush Microsoft. Other than that, I think that both Apple and their customers are better off focusing on quality than on quantity.

Of course Apple tried this approach once before, too, as anyone who recalls the magic word 'Performa' can attest. Fortunately they survived that, and eventually put in management that learned from those mistakes. ;)

more apple in the media, and this is coming from a PC magazine

http://www.pcmag.com/article2/0%2C18...62397%2C00.asp

I love this part:
That's like saying that the only difference between a four lane super highway and a dirt road is the smooth ride. :rolleyes:

I agree with that statement, both made from the same hardware and both perform the same tasks, the mac is just a different path and streamlined in some fashions. I wouldn't say it's as drastic as a paved highway versus a gravel road.

A lot of it is personal preference.

If you're in IT. :D

The fact is that most PC users don't choose PCs. They buy them because they don't know there are alternatives. Even when they're vaguely aware that there is a choice, they often are conditioned to believe that it isn't significant, which is what Dvorak is promulgating. That's why so many recent switchers are surprised that they like their Mac so much. Yes, they heard it was easier to use, but they couldn't really believe it until they spent some time with it.

well that article was mostly fluff anyways, but its like the third or fourth article I have seen PC mag write about apple.

Apple is definitely a status symbol and definitely pop culture, which has some bad stigma to it but that how it goes I guess.

I would love to see Apple come out with a micro tower, something like a cross between a B&W and a Mini, a tower made with laptop components. If the CPU is soldered onto the motherboard, Apple would be able to protect future sales and profits, while still allowing maximum configurability, increased component upgradeability (good for enterprise and geeks) and a small, stylish form factor (good for consumer appeal and Apple's perpetual trendy image).

Well they just make a barebones mini tower with an apple motherboard, and an intel processor with all the nice integrated periphs that macs have, FW, usb, etc, a few PCI-E slots, a few SATA ports, and then you can pick out whatever RAM, HD, and video card you want. I mean especially if gaming is going to come to the Mac platform so many gamers would switch because lets face it, vista sucks.

I'm going to agree with tlarkin on this one. I hate Dells and Gateways. I run a bit of a neighborhood repair shop, where my friends come to me for their computer woes in the area. I've had more Dell and Gateway failures than anything else.

I've never seen a single Compaq or HP computer fly through here. If I had to buy a PC, it'd be HP or Compaq. Simply because HP/Compaq's are so robust.

But hey, why worry? All intel Macs make the best Windows machines, after all ^_^

If I had to buy a PC it would be this one. The price is good, and it doesn't need anti virus software.

Don’t jump to conclusions! It depends on what diseased fingers might be dancing on those keys while you’re having your coffee break. :D

By the way, my translator friend who is now probably switching to Mac (because he can’t stomach the thought of Vista), has never had a virus on his PC.

As far as he knows. Most zombie PCs sending out spam right this minute have been infected without their owners knowing it, and it wouldn't be profitable to do if the infection was easily discovered.