Barkings! | The Small Dog Apple Blog

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — …

This Declaration of Independence stands as one of the most radical statements of human freedom and dignity. It is these principles of equality, liberty and the pursuit of happiness that we celebrate on Saturday. It is also a celebration of the responsibility of each of us as citizens to hold our government to these ideals as the “consent of the governed.”

We will be having a pretty traditional 4th of July celebration with the Warren parade and then my annual strawberry and croquet party at my house. Please have a great and safe holiday weekend!

Tags: 4th of july, celebration, declaration, independence day, usa

Great news this week—Steve Jobs is back on the job at Apple. Reports coming from the campus in Cupertino say he is looking good and energetic.

While Apple seemed to roll on while Steve was on his medical leave, there is no question that he is the heart and soul of Apple. It is his vision and business sense that has led one of the most remarkable business stories in history. Welcome back Steve!

In other Apple news, the latest Guide to Greener Electronics from Greenpeace continues a trend in reversing their pointed criticism of Apple by giving them higher marks. While Dell, HP and others are delaying plans to remove PVC and brominated flame retardants (BFR), Macs are nearly free of PVC and have no BFRs whatsoever. We encourage Apple to continue to lead in this important area!

Tags: apple, green, greenpeace, macs, pvc, steve jobs

Start Soapbox

The new MLB iPhone application will now stream live game video in addition to the audio feeds. The first game to be boardcast is the Cubs versus White Sox. We are in the midst of inter-league play and once again, that unfortunate mistake that will always make the American League the junior league becomes more apparent—the designated hitter rule.

Adopted in 1973, the rule has artificially inflated the hitting percentage of the American League and has allowed older players who can no longer play a defensive position to extend their careers unnaturally. This isn’t football where you have an offense and defense and different players for each—this is baseball where nine players play both offense and defense!

Baseball is the game of inches; the game of details. The strategy for managers of when to lift a pitcher, who to pinch hit, where that player might play are all integral parts of the game of baseball. The double switch is something American League teams just don’t know, yet it is an important part of baseball.

The national league has produced some great hitting pitchers. One of the best plays for my Chicago Cubs. Carlos Zambrano is one of the best hitters on the team and is their pitching ace, too. (He is frequently used as a pinch hitter!)

Hitting pitchers are rare, though and during inter-league play the American league home team automatically receives a significant unnatural advantage by shielding their pitchers and having that one-dimensional hitter on their roster.

I haven’t liked the American League since before the DH was instituted, but that rule is truly a travesty and should be repealed!

End Soapbox

I ran out of verbs to describe this unprecedented run of extraordinary quarterly results for Apple, so I used the Thesaurus widget and have a few more for the next couple of quarters. On Tuesday, the analysts were predicting under $8 billion in sales and profits in the neighborhood of $1.09 a share. The actual results were $8.16 billion in sales and a remarkable $1.33 per share in profit which translates to $1.21 billion of profit for the three month period of Jan – Mar. This almost magical American business success story continues with Apple posting the best non-holiday quarter in terms of revenue and earnings in the company history in the middle of the most severe economic downturn in decades!

The news is even better if you consider that iPhone (and AppleTV) sales are not even booked in their entirety at the time of sale but rather the sales income is spread over 24 months. If you include those sales in this quarter the news is even better. Using this non-GAAP accounting, Apple posted sales of $9.06 billion and profit of $1.66 billion. Anyway you slice it, this is phenomenal performance for Apple.

Here’s more details from the quarterly report and the conference call with analysts:

Macs

Apple sold 2.22 million Macs in the three months! That is made up of 818,000 desktops and 1.4 million MacBooks and MacBook Pro.

The rest of the industry saw a 7% decline in unit sales, although that is a bit misleading because the cheap netbooks are included in this number – the actual number of personal computers decline is likely to be much higher if you remove the netbooks that can hardly be called a personal computer. Apple saw a 3% decline. If you look at the sell-through numbers, however, Apple Mac sales were flat. Consider that a success in this economy!

iPods

Apple sold an astounding 11.013 million iPods in this quarter that accounted for $1.67 billion in revenue. While a huge number, this is down significantly (over 50%) from the holiday quarter, however, compared to 2nd quarter of 2008 unit sales are up and revenue is down only 8%.

Apple reported that their market share of the MP3 market is steady at 70%. They also reported that sales of the iPod Touch are off the charts and called it a runaway hit. This is driven by the app store which is rapidly reaching its 1 billionth download.

iPhones

I’d like to say “who cares” since Apple maintains their silly policy of not allowing their independent Apple Specialists to sell the iPhone (but allowing Walmart and Best Buy! !#@$%) but the iPhone is a very large and growing sector of Apple’s business and frankly, I love my iPhone!

Apple sold 3.8 million iPhones in the quarter resulting in $1.52 billion in revenue. This is up 22% in revenue and up 123 percent in units and 302 percent in revenue year over year. Understandably, it was down 12 percent in units from the holiday quarter.

Apple hopes to break into the China market this year and remains committed to AT&T and the GSM network.

The two biggest questions were understandably not answered directly in the call. With regard to Steve’s return to the helm at Apple, Peter Oppenheimer simply said “We look forward to Steve Jobs returning at the end of June”. While Steve’s officially on medical leave, my guess is that he is not far from the action at Apple.

The other question was all about netbooks which is the latest buzz. These internet devices are all the rage right now because of the cheap price point. Apple pointed out that’s not all that is cheap – Tim Cook said:

“When I’m looking at what’s sold in the Netbook market, I see cramped keyboards, junky hardware, very small screen, bad software. Not a consumer experience that we would put the Mac brand on.”

He went on to say that if a customer is looking for a small portable device that does browsing and email, we have it- it is called the iPhone or the iPod Touch. Being careful to neither announce unannounced products nor to close any doors, Tim said that if Apple finds a way to deliver an truly innovative product that really makes a contribution, that they would do that.

The Apple story continues and it is a story of innovation combined with careful expert business and supply chain management to build strength that is the envy of many and leaders to all including companies outside of the computer industry. Our hats are off and paws up in appreciation to the Apple management team for a job well done! Keep it up! And by the way, let us sell the iPhone, okay?

Tags: accounting, apple, earnings, wallstreet