During Apple’s Second Quarter 2011 Financial Results Conference Call, Apple CFO Peter Oppenheimer and Apple COO Tim Cook made several comments concerning its media-related products, including the iPod, iPhone, and iPad. In his opening statements, Oppenheimer said that it was the highest March quarter in revenue and earnings ever for the company, with the highest year-over-year revenue growth ever generated. The numbers were boosted by an single-quarter record for iPhone sales, plus “robust” iPad sales—he said the company was “thrilled” with the iPad’s momentum—and 28% year-over-year growth in Mac sales, which totaled 3.76 million.
Oppenheimer also said that the iTunes Store had its best quarter ever, and the iBookstore saw 17,000 eBooks added during the quarter; the iBookstore now offers eBooks from 2,500 publishers, and has seen over 100 million downloads. While overall iPod sales were down, they were ahead of internal expectations, and were comprised of 60 percent iPod touch units, enabling Apple to maintain a 70 percent share of the MP3 player market. Overall, just under 189 million iOS devices had been sold, cumulatively, by the end of the quarter.
Reporting its second quarter financial results today, Apple said it sold 9.02 million iPods during the quarter — a 17 percent decrease compared to the same quarter last year. Apple also sold 18.65 million iPhones in the quarter, a 113 percent increase year-over-year, and up from the 16.24 million units sold in the holiday quarter. Apple also sold 4.69 million iPads during the quarter, down from 7.33 million units in the prior quarter. The units sales of iPhones, iPods, and iPads bring the cumulative unit sales for the three device categories to 108.55 million, 307.02 million, and 19.48 million, respectively. The company posted revenue of $24.67 billion and net quarterly profit of $5.99 billion, or $6.40 per diluted share, compared with revenue of $13.5 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share in Q2 2010.
Sales of Other Music Related Products + Services were up 23% over the year-ago quarter, and up 14% from Q1 2011, to $1.63 billion total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories. International sales accounted for 59 percent of the quarter’s revenue.
“With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders,” said Steve Jobs, Apple’s CEO. “We will continue to innovate on all fronts throughout the remainder of the year.”
“We are extremely pleased with our record March quarter revenue and earnings and cash flow from operations of over $6.2 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $5.03.”
Apple has dropped its estimated shipment wait times on the iPad 2 to 1-2 weeks in many of the countries where the device is available. As noted by Mac Rumors, the new 1-2 week estimate is now posted on Apple’s online stores in the U.S., Canada, Mexico, Australia, and New Zealand, while estimates on its European stores remain at 2-3 weeks. Apple last dropped its wait times to 2-3 weeks on April 4.
Apple has asked a federal judge to dismiss a consumer antitrust lawsuit related to the pairing of the iPod to the iTunes Music Store. Apple attorney Robert Mittelstaedt told U.S. District Judge James Ware that blocking iPod music downloads that used competitors’ software was intended to protect iTunes and iPod customers’ quality of experience. “Apple’s view is that iPods work better when consumers use the iTunes jukebox rather than third party software that can cause corruption or other problems,” Mittelstaedt said at a hearing. The request comes just days after Apple CEO Steve Jobs, still on medical leave from the company, met with plaintiff attorneys for a court-ordered deposition. The case, which dates back to 2005, revolves around RealNetworks’ Harmony technology, which promised to allow copy-protected music sold on its online store to be played on iPods. The technology was introduced in July 2004, and Apple took just five days to announce software updates to render the technology inoperable, saying its was “stunned” that Real had “adopted the tactics and ethics of a hacker to break into the iPod.” Judge Ware is expected to rule on Apple’s dismissal request by May.
Apple has released iTunes 10.2.2, the latest version of its media management software. According to Apple’s release notes, 10.2.2 includes a number of “important” bug fixes; it addresses an issue where iTunes may become unresponsive when syncing an iPad, resolves an issue which could cause syncing photos to an iOS device to take longer than necessary, fixes a problem where video previews on the iTunes Store could skip while playing, and addresses “other issues that improve stability and performance. iTunes 10.2.2 is available now via Apple’s Software Update utility or as a direct download from apple.com/itunes and is a 24.5MB download for Mac users.
Apple has sued Samsung over the latter’s Galaxy series of phones and tablets, claiming that the products infringe on Apple’s intellectual property. The Wall Street Journal reports that the suit names products such as the Galaxy S 4G, Epic 4G, Nexus S, and Galaxy Tab as copying the look and feel of Apple’s iPhone and iPad. “Rather than innovate and develop its own technology and a unique Samsung style for its smart phone products and computer tablets, Samsung chose to copy Apple’s technology, user interface and innovative style in these infringing products,” the lawsuit said. Notably, Apple purchases flash memory and other components from Samsung, and the South Korean company is the manufacturer of the A4 chip found in the iPhone 4, as well as the new A5 chip that powers the iPad 2.
The staff of the U.S. International Trade Commission (ITC) has recommended that HTC and Nokia shouldn’t be found liable of infringing upon Apple patents. Bloomberg reports that Erin Joffre, a lawyer for the staff that acts on the behalf of the public as a third party in the case, made the staff’s position known at the start of an ITC trial in which Apple is seeking to block imports of Android-powered HTC phones as well as some made by Nokia. “What makes Apple products so successful is not just what you see, but what’s under the hood,” said Apple lawyer Greg Arovas of Kirkland & Ellis during his opening arguments. Arovas described the patents in question as important for the “seamless integration of hardware and software” in smartphones. HTC lawyer Robert Van Nest of Keker & Van Nest countered, saying that “HTC is a smartphone innovator and pioneer in the smartphone sphere—they were there long before Apple. The fundamental differences from the Apple patents represent choices made by HTC and Google.” The Judge in the case, Carl Charneski, is expected to release his findings on August 5.
Apple has hired Kevin Timmons, former General Manager of Data Center Operations for Microsoft, according to a new report. Saying simply that members of the data center community had been discussing the development, the Green Data Center Blog reports that Timmons’ position at Apple is not known, but that he will not be filling the position left open by the passing of Oliver Sanche, who had been Apple’s Director of Global Data Center Operations—in fact, the report states that Sanche’s position has already been filled by another data center operations executive. Microsoft has confirmed Timmons’ departure, telling Data Center Knowledge that “Kevin Timmons, general manager of Datacenter Services, has decided to pursue other career opportunities and is no longer working at Microsoft,” and adding that “We appreciate the contributions he made to Microsoft during his time here;” Apple has yet to comment on the matter.
Apple has released iOS 4.3.2 for the iPhone 3GS, iPhone 4 (GSM), iPad, iPad 2, and third- and fourth-generation iPod touch. According to Apple’s release notes, the update “fixes an issue that occasionally caused blank or frozen video during a FaceTime call,” “fixes an issue that prevented some international users from connecting to 3G networks on iPad Wi-Fi + 3G,” and “contains the latest security updates.” Notably, the notes make no mention of the problems domestic iPad 2 CDMA users had connecting to Verizon Wireless’ network, as had been previously speculated. In addition, Apple has released iOS 4.2.7 for the CDMA iPhone 4. Both updates are available now via the Update feature in iTunes.
Update: Apple has posted a support article documenting the security changes in iOS 4.3.2.
A recently published Apple patent application suggests the company is investigating display technology that would allow devices to switch between an e-Ink and video displays as needed. Entitled “Systems and Methods for Switching Between an Electronic Paper Display and a Video Display,” the patent describes a device with a display that contains a touch-sensitive surface, an electronic paper display, and a video display. While E Ink electronic paper is specifically mentioned in the application, the display could include any suitable electronic ink display. By using addressable microcapsules inside the electronic ink display, the display could be made to appear transparent, allowing for viewing of the video display—of LCD, OLED, or some other suitable technology.
In addition, the patent describes a system of regions within the displays that could be used to show both the electronic paper display and the video display in different areas of the screen at the same time. According to the patent, the device could automatically choose which display technology to use based on color composition or rate of change. As with all Apple patents, this application does not necessarily represent any future product release from Apple, but offers evidence of the company’s research in this area. [via Patently Apple]
Apple has hired Kevin Kenney as a Senior Composites Engineer, according to Kenney’s LinkedIn profile. The profile reveals that Kenney spent more than 13 years as the President & CEO of Kestrel Bicycles—a company that specializes in bikes with carbon-based frames—before leaving to start his own firm. Interestingly, it appears as though Kenney was doing work for Apple prior to his recent full-time hiring, as an Apple patent application from May 2009 for a “Reinforced device housing” made from a fiber-in-matrix material lists Kenney as the sole inventor. In addition to his background in working with fiber, Kenney’s profile also notes that he has experience in logistics, purchasing, and supply chain management. [via 9to5Mac]
A recent report from gaming magazine MCV indicates that Apple may be hiring two top public relations executives away from Nintendo and Activision. Rick Saunders, head of communications at Nintendo UK announced last week that he would be leaving the company after seven years, although he did not indicate where he would be going next. Saunders is said to have played a key role at Nintendo in the Wii and DS launches and in building strong relationships with mainstream media. MCV reports that Saunders’ role at Apple will be to focus on PR for iOS apps. The second PR executive, Nick Grange of Activision is rumoured to be moving to Apple into a role focused on iPad hardware. Grange worked for Electronic Arts and Microsoft before joining Activision in 2007 where he is currently the European PR director. Neither appointment has been officially confirmed by Apple or the individuals involved. [via Mac Rumors]
An Apple patent application revealed by the U.S. Patent and Trademark office today provides more details on a possible implementation of a “smart bezel” user interface for iOS devices. Apple received a patent last year for a touch-sensitive bezel which described a number of implementations for extending the touch-based interface beyond the perimeter of the screen in order to manipulate or control what is being displayed on the screen. The patent application revealed today provides a more in-depth look at possible approaches covering “systems and methods for selectively illuminating a secondary display.” The application notes that an electronic device could include a primary display screen and a “printed segmented electroluminescence secondary display.” The primary display would be used to display visual content while the secondary display would display selectively illuminated indicators to represent buttons and other controls. In the application, Apple notes the major limitation of the current on-screen touchscreen control model as occupying “space on the touch screen that could otherwise be used for displaying visual content” and proposes the secondary display as a solution by moving the user controls off the primary display. The application goes on to summarize ways in which the secondary display would work, including selectively illuminating portions of the secondary display based on conditions such as application state, motion sensing components, device orientation and location. As with all Apple patents, this application does not necessarily represent any future product release from Apple, but offers evidence of the company’s research in this area. [via Patently Apple]
A recent report from ModMyI suggests that retailer Toys R Us may begin selling the iPad 2 in its stores as early as next month, revealing a photo of an iPad 2 product knowledge sheet from an internal training session intended to familiarize employees with new products. Toys R Us began selling select iPod models in late 2008, however the retailer has not previously offered the iPad. It is unclear at this time whether the iPad 2 would be sold internationally or only in the company’s U.S. stores. The iPad 2 is already being sold in the U.S. at other third-party retailers such as Wal-Mart, Best Buy, Target and Radio Shack. [via Mac Rumors]
Apple has ordered a staggering 12 petabytes of storage for iTunes video content, according to a new report. Citing an source inside Isilon Systems, the company from which Apple purchased the storage, Storage Newsletter reports that the storage will be used to “manage the video download of its customers using iTunes,” and that Apple’s order probably makes it the largest of the company’s 1,500 customers. Apple has reportedly been working on an online digital locker service for personal data such as photos, music, and videos, although the report makes no mention of this being a possible use for the storage. [via AppleInsider]
A newly granted Apple patent suggests the company is working on a thinner, high-speed dock connector. Entitled “Reduced size multi-pin male plug connector,” the patent describes a dock connector-like plug and receptacle, both of which use any one of a variety of design changes in order to reduce their height in an attempt to accomodate ever-smaller devices; one embodiment also includes a moveable door to protect the contacts. In addition, the patent specifically singles out DisplayPort and USB 3.0 as possible high-speed data communication standards. Interestingly, the patent application was filed just days after Intel first introduced its Light Peak technology, on which the company collaborated with Apple to bring it to market under the name Thunderbolt. As Apple is now shipping its new MacBook Pros with Thunderbolt ports but without USB 3.0, it seems likely that Thunderbolt would supersede DisplayPort and USB 3.0 as the preferred communication standard in any revised dock connector. As with all Apple patents, this filing does not necessarily represent any future product release from Apple, but offers evidence of the company’s research in this area. [via Patently Apple]
Apple has released a new app designed specifically for displaying ads from the company’s iAd network. Described as a “celebration of advertising,” iAd Gallery allows users to view ads by searching or browsing by advertiser, category or ad feature. Users can also learn more about the featured ads and the advertising agencies that developed them and add their favorite ads to a “Loved” section for quick access. iAd Gallery is available from the U.S. App Store as a free download.
Nasdaq OMX is expected to announce a rebalancing of its Nasdaq-100 index, which will see a marked reduction in Apple’s weighting. The Wall Street Journal reports that Apple, which currently makes up more than 20% of the index, will make up 12.3% of the Nasdaq-100 once the rebalancing takes effect May 2. According to the report, the rebalancing was driven in part by the performance of Apple shares, which are up more than fourfold in the past two years; a change in fortune for the shares has a huge impact on the index with the current weighting. Among Apple’s rivals, both Google and Microsoft will see their share of the index increased, by 1.6 and 4.9 points, respectively.
Apple has won a reversal in a patent infringement case that saw the iPod-maker hit with $625.5 million in damages. Bloomberg reports that U.S. District Judge Leonard Davis ruled that Apple didn’t infringe on patents owned by Mirror Worlds LLC, and closed the case in Apple’s favor. The judge also said the damages awarded were too high, although he did uphold the validity of the patents. “Mirror Worlds may have painted an appealing picture for the jury, but it failed to lay a solid foundation sufficient to support important elements it was required to establish under the law,” Davis wrote. The case revolved around Apple’s Spotlight, Time Machine, and Cover Flow interfaces for Mac, iPod, and iOS.
Apple has started to air its first TV advertisement devoted to the iPad 2. Entitled “We Believe,” the commercial shows the iPad 2 being used for a variety of apps in front of a black background, while a narrator states, “This is what we believe. Technology alone is not enough. Faster, thinner, lighter: those are all good things. But when technology gets out of the way, everything becomes more delightful. Even magical. That’s when you leap forward. That’s when you end up with something… like this.” The ad is available for viewing now on Apple’s website.