Or, the contentions that they were merely a high-end niche product builder that could never achieve mainstream prominence?
First, they “ignored” the worst recession and global financial crisis since the depression to avoid suffocation from a consumer spending swoon, and in the process, take market share, grow their already mighty operating margins and fortify their swollen cash reserves.
That, my friend, should have been the moment when the naysayers finally grokked once and for all that Apple had built themselves an “unfair advantage” predicated on halo effects, deeply integrated solutions across product, ecosystem and channel, and a simple mantra, “It’s the Platform, Stupid!”
Alas. Enter March Quarter, 2010, and Apple has done it once again.
How so? They grew top line revenues 49% year-over-year to $13.5B (12.5% better than projections) and net income 90% year-over-year to $3.07B (36% better than projections), in the process, throwing another $1.9B of cash into their coffers (they now have $41.7B in cash/cash equivalents).
But, it’s the “how “ side of the equation that is most impressive, beginning with the iPhone and ending with the Apple Stores.
Simply put, iPhone blew the doors off the barn, realizing a best-ever quarter of 8.75M units sold – a year-over-year increase of 131%, which is over three times the growth rate of the overall smart phone segment – while maintaining an ASP (average selling price) of ~$600 per iPhone.
What made iPhone so strong? Well, consider that Asia Pacific grew 474% year-over-year; Japan grew 183%, Europe another 133%, and so on.
In other words, the iPhone continues its run unabated as a global phenomenon, not so easily dismissible by skeptics as a bauble for wealthy Americans defaulting through savvy marketing to a popular consumer brand.
Candidly, the iPhone numbers are what impressed me the most about the earnings, given rumors of a new iPhone coming this Summer (which could have led to consumer purchase delays), and the very valid question of whether Apple has captured the low-hanging fruit of well-to-do consumers, and thus, would face slowing growth ahead. It wouldn’t have shocked me if it had played out differently, but it didn’t.
Meanwhile, Apple still apparently sells these things called Macs, and in the March quarter, Apple achieved its best March quarter ever, selling 2.94M Macs (vs. a 2.7M units consensus), representing 33% year-over-year growth (relative to 24% for the rest of the market).
Similarly, the iPod business, which is rapidly coming to mean iPod touch, did 10.9M units in the quarter versus 11M in the same quarter last year, which translated to 12% revenue growth – Apple’s best performance in two years – owing to iPod touch unit sales growth of 63% year-over-year, and the device’s higher ASP than classic iPod models.
The other key “yowza” from the earnings call was Apple retail, where Apple Stores continue to rock. Here, the company did $1.68B through the Apple Stores, versus 1.38B in the prior year’s quarter, but most importantly, they grew same-store sales to $5.9M per store from $5.5M in the prior year. The same-store numbers represent the company’s best performance in six quarters.
As an old retail guy, I can tell you that same-store sales are a key indicator that a company is growing the right way (versus cannibalizing its pre-existing retail footprint by simply opening more stores).
All in all, it’s time for someone to say, “uncle,” but you just know they won’t.
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