Highest Revenue Ever! Apple’s $20 Billion Q4 2010 Financial Results

Apple logo on glass

It’s almost hard to remember a time when Apple wasn’t making money hand over fist, especially with multiple quarters in a row boasted as their biggest yet. Cupertino didn’t disappoint Wall Street once again, racking up fiscal fourth quarter revenue of .34 billion and a net quarterly profit of .31 billion.

Apple just released the results of their fiscal fourth quarter for 2010 (actually the calendar third quarter which ended on September 30) and there are few surprises. The company had another record-breaking quarter, with revenue of .34 billion and net quarterly profit of .31 billion or .64 per diluted share, compared with .21 billion, net quarterly profit of .52 billion and .77 per diluted share for the same quarter a year ago. That’s 70 percent year-over-year growth, beating previous quarterly earning records by 0 million.

“We are blown away to report over billion in revenue and over billion in after-tax earnings — both all-time records for Apple,” said CEO Steve Jobs in a company statement. “iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter.”

iOS Devices

Apple’s sales were up in almost every category, with the iPod line showing the only decline with 9.05 million sold during the quarter, an 11 percent decline over the same quarter a year ago — and likely because more customers are picking up iPhones and iPads. But don’t cry for Apple, because the iPod still holds 70 percent of the MP3 player market, according to the latest NPD sales data.

As Jobs noted, the iPhone shot past Blackberry maker Research in Motion with 14.1 million units sold, up a whopping 91 percent from the same quarter last year — compared to 64 percent growth for the overall smartphone market.

The iPhone is now on 166 carriers in 89 countries, and has had very strong year over year growth in Asia and Japan. Apple also noted that the iPhone once again ranked highest in smartphone customer satisfaction from J.D. Power & Associates, with enterprise adoption accelerating from 60 to nearly 80 percent of Fortune 500 companies.

Apple’s iPad sales for the quarter were 4.19 million — those sales figures were about the only thing to disappoint Wall Street, who had anticipated much larger numbers from the tablet device. Apple’s COO Tim Cook tempered that sentiment during the conference call by reminding everyone that enterprise adoption for the iPad is off the chart, with two-thirds of the Fortune 100 either deploying or piloting the device, concluding “This isn’t a hobby or something we’re doing lightly.”

Speaking of hobby devices, Jobs also divulged during the Q&A conference call that the new iOS-enabled Apple TV has sold 250,000 units, which the company is extremely pleased with.


It wasn’t all about Apple’s mobile lineup, either — the company shipped 3.89 million Macs during the fiscal fourth quarter, which was also an increase of 27 percent over the same period last year — and more than double the projected growth for the overall PC market.

The iMac in particular had very strong sales following its July refresh, and Mac growth was strong in every market, with Asia/Pacific and Japan showing the most growth.

On Competition

CEO Steve Jobs crashed the conference call to get in a few well-placed digs at competitors such as Research in Motion, reiterating that the iPhone has now flown past RIM’s Blackberry sales. “We’ve now passed RIM,” Jobs trumpeted, “and I don’t see them catching up with us in the future.” Considering that RIM is selling a variety of different Blackberry devices at any given time versus Apple’s two iPhone models (the iPhone 4 and 3GS), Apple’s sales figures are even more impressive.

And Jobs didn’t stop there — he leapt right into an even more intensive attack on Google, once again questioning the search giant’s recent claims that they are activating 200,000 Android devices every day. Jobs claims that Apple has activated 275,000 iOS devices per day for the last 30 days on average, although that no doubt includes the iPhone, iPod touch and iPad.

“There’s no solid data on how many Android phones are shipped each quarter,” Jobs lamented. “We hope that manufacturers will start reporting on the number of Android phones shipped.”

Jobs also took Mountain View to task over Google’s claims that Android is an open OS while Apple’s iOS is closed, claiming that developers have a huge challenge in supporting the 244 different Android handsets shipped over the last 12 months, while the App Store’s developers have only two — the current and previous version of iOS. The situation is likely to get even worse, with competing app markets coming from the likes of Vodafone and Verizon, which Jobs called “a mess for both users and developers.”

On the subject of the iPad, Jobs is confident that Apple will triumph over Google’s “fragmented approach” and remains committed to Cupertino’s “integrated approach” which Google paints as being closed. Noting that there are an “avalanche of tablets arriving in the coming months,” but noting that they are mostly seven-inch form factors versus the iPad’s roomier 10-inch screen — and that Google is going out of its way to tell tablet manufacturers not to use their latest Android 2.2 “Froyo,” and to wait for a tablet-specific version coming next year. “What does it mean when your software supplier tells you not to use their software in the tablets?” Jobs quipped.

Jobs was also quick to throw cold water on the idea of a seven-inch iPad, which has been widely rumored as being in Apple’s radar. “We’re not making a seven-inch tablet because we don’t want to hit a lower price point,” Jobs noted. “We just believe it’s too small to hit the user experience that people want.”

Finally, Jobs noted that there are 35,000 apps in the App Store today, while new tablets have “zero” and that iPad competitors are having a rough time competing with the device on price alone, even at the seven-inch screen size. “We think the current crop of seven-inch tablets will be DOA (dead on arrival),” Jobs concluded.

Questions & Answers

Following CEO Steve Jobs’ rapid-fire assault on the competition, the focus shifted to a question and answer session with analysts and investors, largely focused at the iPad and the iPhone. Regarding supply constraints on the iPad, Apple claims the situation is improving as their international rollout continues over the holiday season.

Piper Jaffray analyst Gene Munster queried Apple on its business for the next year or two, where Steve Jobs sees the iPad “clearly” affecting the notebook computer market. “I think the iPad proves that it’s not a question of ‘if’ but ‘when,’” Jobs noted. When asked about the iPad being Apple’s second main business behind the iPhone, Jobs added that the company is already shipping more iPads than Macs, which speaks for itself. “We’re out to win this one,” Jobs said regarding the iPad. There was also the obligatory question about Adobe Flash compatibility, to which Jobs quipped, “Flash memory? We love Flash memory.”

On the subject of the smartphone being a “zero-sum” game, Jobs noted that in the next year or two, many non-smartphone users will convert to smartphones “and the pie is going to continue to grow. It’s a battle for mindshare right now, and iPhone and Android are winning that bat

Jobs was in a particularly feisty mood when asked about the risks being managed in taking on the likes of Google’s Android. “Our goal is to be the best,” Jobs confidently stated. “We’re not the biggest — that’s Nokia. We admire them, but we don’t aspire to be them. Android is our biggest competitor — they outshipped us in the June quarter when we were caught in a transition, and we’ll see about the September quarter.”

The CEO also didn’t mince words on low-price dominance, claiming that Apple “doesn’t know how to make great handsets” like the models offered by competitor Nokia. “Our goal is to make great, breakthrough products but also drive costs down. We’re all about the best products at aggressive prices.”

Apple wrapped up the earnings conference call by fielding a question on what the company plans to do with its billion pile of cash, noting that “We firmly believe that one or more unique, strategic opportunities will present itself to us, and we’ll be in a position to take advantage of it” rather than simply return some of that cash pile to shareholders.

Finally, Jobs noted in the company’s press release that “We still have a few surprises left for the remainder of this calendar year” — and we’re guessing that at least some of those will have the curtain drawn on them at Wednesday’s media event at Apple’s Cupertino campus.

Apple is anticipating revenue of billion in its fiscal first quarter of 2011, or .80 per diluted share, which means the company is again looking up, up up. Apple’s fiscal year 2010 fourth quarter results conference call is available as a QuickTime stream for the next week, and recommended listening just for the Steve Jobs quotes alone.

Check out Steve’s comments below.

Follow this article’s author, J.R. Bookwalter on Twitter


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