During Apple’s Third Quarter 2010 Financial Results Conference Call, Apple CFO Peter Oppenheimer, Apple COO Tim Cook, and, surprisingly, Apple CEO Steve Jobs made several noteworthy comments concerning the company’s digital media products, including the iPod, iPhone, and iPad. During his opening remarks, Oppenheimer noted that Apple passed 125 million iOS devices—including the iPhone, iPad, and iPod touch—last month, with over 200,000 registered iOS developers, 65,000 game and entertainment apps, and over 30,000 apps made specifically for iPad. Oppenheimer also noted that iAd launched in July, and that the company is very happy with its results so far.
In regards to the iPod, Oppenheimer said it remains the worldwide MP3 player leader with over 70% market share, and is gaining share in most of tracked countries, while iTunes revenue for the quarter was over $1 billion. Turning to the iPhone, he pointed out that Apple sold over 40 million iPhones in fiscal year 2010, and that the iPhone accounted for more than $8.82 billion in revenue in the fourth-quarter, with an Average Selling Price (ASP) of around $610. iPhone sales grew in Asia, Europe, and Japan during the quarter, with sales more than doubling year-over-year in Japan. He added that the percentage of Fortune 500 companies piloting or deploying the iPhone jumped from 60% to 80% following the launch of the iPhone 4, and said Apple believes it could have sold even more iPhones if it could have kept up with demand.
Making a rare appearance on the company’s Q4 2010 earnings conference call, Apple CEO Steve Jobs made several comments regarding tablet competitors to the iPad that have been announced but have yet to ship. Jobs said that there were only a handful of credible entrants out of the many tablets that have been announced, and keyed on the fact that most of them use 7-inch screens. According to Jobs, these screens offer only 45% of the touchable surface area of the iPad’s 9.7-inch screen — he said to hold the iPad in portrait orientation, draw a line across the middle, and the screen of one of the new tablets would be a little smaller than the bottom half of the iPad’s display. Jobs then half-jokingly suggested that competitors could include sandpaper with the tablets so that users could sand their fingers down to 45% of their current size.
Jobs went on to call 7-inch tablets “tweeners,” saying they were too big to compete against smartphones—something Jobs said every tablet user would likely own—but too small to compete against the iPad. Furthermore, he pointed out that while most of the new tablets are based on Android, Google is telling the companies not to use the current version of the Android software, and to instead wait on a new, tablet-friendly version of the OS set to arrive next year. Jobs also said that their competitors were having trouble matching the iPad’s price point despite using smaller screens, and noted that while there are over 30,000 iPad apps available, most of the new tablets would launch with close to zero. Finally, he declared the new entrants “dead on arrival,” adding that competitors will increase their tablets’ screen size next year after they realize the 7-inch screens are too small, and that the process “sounds like lots of fun.”
Reporting its fourth-quarter financial results today, Apple said it sold 14.1 million iPhones during the period, representing 91% growth from the year-ago quarter, and up from 8.4 million in the third-quarter. The company also sold 9.05 million iPods during the quarter, an 11% decline year-over-year, and also down slightly from the 9.41 million iPods sold during the third quarter. Apple also sold 4.19 million iPads during the quarter, up from 3.27 million units in the third quarter. The units sales of iPhones, iPods, and iPads bring the cumulative unit sales for the three device categories to 73.7 million, 278.5 million, and 7.46 million, respectively. Overall, the company posted revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share, in the fourth quarter, compared to revenue of $12.21 billion and net quarterly profit of $2.53 billion, or $2.77 per diluted share, in Q4 2009.
“We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings—both all-time records for Apple,” said Steve Jobs, Apple’s CEO. “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. We still have a few surprises left for the remainder of this calendar year.”
“We’re thrilled with the performance and strength of our business, generating almost $5.7 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $4.80.”
Apple has released a minor maintenance update to its Remote application for iPhone, iPod touch and iPad devices. Remote 2.0.1 addresses a number of issues in the Remote 2.0 update released earlier this month, including performance when using Remote on an iPhone with Bluetooth enabled, problems browsing artists with a large number of albums, issues waking up computers when using Home Sharing, connecting to an iTunes library or Apple TV and with Wi-Fi network connections. Remote 2.0.1 is available from the App Store as a free download and should appear as an automatic update for current users.
Apple has released the third beta version of iOS 4.2 for the iPad, iPhone, and iPod touch to developers, along with its accompanying SDK and a new beta version of iTunes 10.1. It is currently unknown what changes and/or new features may be present in the updated software. Slated for a November release, iOS 4.2 will bring several new features to Apple’s mobile device OS, including AirPlay streaming, AirPrint wireless printing, and the ability to import .ics files directly into Calendar as new events, and will bring the iPad’s software feature set into parity with the iPhone and iPod touch. Apple’s iOS 4.2 beta 3 for the iPad, iPhone, and iPod touch, iOS 4.2 beta 3 SDK, and iTunes 10.1 beta 2 are available now as free downloads for paid iOS developers from the iOS Dev Center.
At a ceremony last night, Apple was awarded five T3 Gadget Awards, the most of any company. The iPad received Innovation of the Year and Gadget of the Year awards, while the iPhone 4 was picked as Commuter Gadget of the Year, but lost Phone of the Year to HTC’s Desire. Apple also won computer and retailing awards in the ceremony, during which British actor and writer Stephen Fry produced a white iPhone 4 on stage, joking that it was the “only one in Europe.”
Apple has received a trademark from the U.S. Patent and Trademark Office for the phrase “There’s an app for that.” According to the filing, Apple first began using the phrase on January 26, 2009, likely in a television advertisement for the iPhone 3G. The trademark is filed in the category of Advertising, Business & Retail Services, Computer & Software Services & Scientific Services, and is described as “[r]etail store services featuring computer software provided via the Internet and other computer and electronic communication networks; retail store services featuring computer software for use on handheld mobile digital electronic devices and other consumer electronics.” Apple first filed for the trademark on December 4, 2009, or roughly a month after AT&T filed suit against Verizon over its “map for that” ads attacking both AT&T and the iPhone.
Apple is in talks with the major record labels about launching a music subscription service, according to a new report. Citing anonymous sources, the New York Post reports that Eddy Cue, Apple’s Vice President of iTunes, was on the phone with music executives as recently as a few weeks ago, attempting to iron out a plan of acton for the partners. According to one Post source, Apple would use a tiered pricing structure for the service, with prices ranging from $10 to $15 depending on how much music would be included and how long customers would have access to the content. The report cites one music industry executive as saying that the labels are supportive of such a service and believe it could re-energize digital music sales. While a potential iTunes subscription service has been rumored for many years, the article notes that the impending U.S. launch of the ad-supported music streaming service Spotify on Windows Phone 7 devices has given the idea new life.
Apple is once again offering its iPhone 4 Bumper cases via its online store. Unavailable online since the announcement of the company’s iPhone 4 Case Program, the cases had begun to reappear in the company’s retail stores as of October 1, the day after the Case Program ended. Apple’s U.S. online store now shows availability of all six Bumper colors, ready to ship within 24 hours at a price of $29; notably, this is the first time any of the Bumper colors save for black have been available since they were pulled from store shelves in July. [via Mac Rumors]
Apple has been canceling a number of iPhone 4 orders placed with the Apple Online Store in Hong Kong, according to MIC Gadget. While Apple’s cancelation emails state that the customer has exceeded the limit of units any single person is allowed to order, the report claims that some customers were not over the quantity limit, and that the cancelations did not appear to be related to stock shortages. Instead, MIC Gadget suggests that Apple is canceling the orders in the wake of last week’s incident in Beijing, where the company had to close one of its flagship stores due to a large group of scalpers attempting to purchase large quantities of iPhone 4 units to sell on the gray market, and is trying further to keep the phones out of the hands of scalpers. Interestingly, the report notes that the selling price of an iPhone 4 on the Hong Kong grey market has actually risen since news of the order cancellations broke, giving scalpers greater incentive to get their hands on iPhone 4 units.
Motorola Mobility, a subsidiary of Motorola, Inc., has filed a complaint with the U.S. International Trade Commission (ITC) alleging that the iPhone, iPad, iPod touch, and certain Mac computers infringe Motorola patents. The company has also filed patent infringement complaints against Apple in the Northern District of Illinois and the Southern District of Florida. According to Motorola’s announcement, the three complaints include 18 patents, which relate to “wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and key smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.” Motorola Mobility has asked the ITC to start an investigation into Apple’s potential infringement and issue an Exclusion Order barring the importation, sales, marketing, advertising, and use of such products in the U.S.; in its court cases, it is seeking to force Apple to cease using its patented technology and provide compensation for any past infringement.
Apple has posted a new iPhone 4 TV advertisement focused on the device’s Retina Display. Entitled “Every,” the spot touts the 960x640 display as the “highest resolution phone screen ever,” the 30-second spot demonstrates how the technology improves the quality of the user’s photo and movie viewing, reading, gaming, and social networking experience while using the phone. Apple’s latest iPhone 4 TV spot is available for viewing now on the company’s website.
Apple has reduced the estimated wait time for new iPhone 4 orders from its online store down to 5-7 days. The reduction—which appears to be unique to the U.S. online store, as wait times in other countries remain at three weeks—could be a sign that Apple is beginning to get its supply issues with the handset under control. During Apple’s most recent quarterly earnings conference call, COO Tim Cook repeatedly explained that the company was making iPhone 4 units as fast as it could sell them; the company has since greatly expanded the number countries in which the phone is available, potentially hindering its ability to meet demand. [via Mac Rumors]
Apple was recently ordered by a jury to pay damages to Mirror Worlds LLC for infringing the latter’s patents related to the display of digital documents, but is challenging the verdict. Mirror Worlds, a software business started by a Yale University computer-science professor David Gelernter, claimed that Apple’s Cover Flow and Time Machine display methods infringed on its patents, and was awarded $208.5 million in damages for each of the patents infringed. Apple has asked U.S. District Judge Leonard Davis for an emergency stay of the verdict, claiming that there are outstanding issues with two of the three patents, and also claimed Mirror Worlds would be “triple-dipping” if it were to collect the full $208.5 million for each of the three patents. Bloomberg reports that Davis also is considering Apple’s request, filed before the verdict, to rule that the company doesn’t infringe two of the patents, which would lead him to strike the amount of damages attributed to those two patents.
Apple has revised its original AirPrint announcement, removing promised support for the second-generation iPod touch. Announced in September, AirPrint automatically finds printers on local networks that can print text, photos, and graphics wirelessly over Wi-Fi without the need for additional drivers or software. Notably, Apple’s original release claimed that printing would only be supported on iOS devices that support multitasking, yet listed the second-generation iPod touch as compatible. The second-generation iPod touch has since been removed from the compatible device list. This is the second incident in the last few months where Apple has revised its list of supported devices before a software update’s official launch, as it removed Game Center support for the iPhone 3G and iPod touch 2G while it was still in beta testing, only to add back support for the second-gen touch shortly before the feature’s debut in iOS 4.1. [via 9 to 5 Mac]
Athletic apparel company Adidas has reportedly pulled out of Apple’s iAd mobile advertising service due to Apple’s control over the program. Citing two mobile industry executives, Business Insider reports that Adidas decided to cancel its $10+ million campaign with Apple after the iPhone-maker rejected its creative concept for the third time. A Wall Street Journal report from August suggested that Apple was experiencing early challenges with the service, including resistance from advertising agencies over the company’s tight control; it noted that one named launch partner—Chanel SA—had already pulled out of the service. According to Business Insider, neither Apple nor Adidas responded to requests for comment.
Apple has released an update to its MobileMe Gallery application adding native iPad support. MobileMe Gallery is a free app that allows iOS device users to browse through their own and their friends’ MobileMe Galleries directly on an iPhone, iPod touch and iPad. The application provides features similar to the built-in Photos app including pinch-to-zoom for photos, portrait and landscape orientation and support for playing videos from MobileMe. Previously-viewed photos are also cached for offline viewing. MobileMe Gallery version 1.2 is now a universal app offering full iPad support as well as fast app switching for iOS 4 devices and support for the iPhone 4 and fourth-generation iPod touch Retina Displays. iPhone and iPad users can also now view friends’ galleries without requiring their own MobileMe subscription, a feature conspicuously omitted for iPod touch users. MobileMe Gallery is available from the App Store as a free download.
The App Store is holding its first major sale on popular iOS game titles, offering discounts of up to 70% off normal prices. All of the included titles are selling for $3 or less and the list includes such acclaimed titles as Peggle ($1), Mirror’s Edge ($2), Real Racing ($3), NFL 2011 ($3), Need for Speed Shift ($1), DOOM Resurrection ($2), Osmos ($1), Resident Evil 4 ($2), Civilization Revolution ($1) and many more. The sale runs until October 7th. A complete list of game titles included in the sale can be found on the App Store.
Speaking at the Royal Television Conference in London, Time Warner CEO Jeff Bewkes cautioned against potential deals with Apple and/or Amazon that could harm sales of TV shows to other networks. “How can you justify renting your first-run TV shows individually for 99 cents an episode and thereby jeopardize the sale of the same shows as a series to branded networks that pay hundreds of millions of dollars and make those shows available to loyal viewers for free?” Bewkes said. “These new entrants must meet a few criteria: They must provide consumers with a superior TV experience, and they must either support or improve the overall economics that funds and creates the programming in the first place.” NBC Universal CEO Jeff Zucker, who has a history of playing hardball with Apple, recently voiced similar concerns about Apple’s 99-cent TV rentals, saying, “We do not think 99 cents is the right price point for our content. ... We thought it would devalue our content.”
Apple’s flagship store in Beijing was forced to close its doors early today after a group of iPhone 4 scalpers created a chaotic scene. MIC Gadget reports that Apple removed its limitation on the number of contract-free iPhone 4 units any single customer could buy at the store, perhaps unintentionally paving the way for the problems ahead. The store opened at 7:00 a.m. local time, but closed only three hours later, with many customers left in the queue outside, unable to enter. The report claims that scalpers were entering the store and buying large quantities—20-30 units at a time—of iPhone 4s, then proceeding out into the mall and attempting to sell the units to passerby at a higher-than-retail price.
According to the report, people were literally being pushed into the cashier’s counter, some holding stacks of bank notes, prepared to buy as many iPhone 4 units as they could afford. The situation escalated when a group of regular customers got into a fight with the scalpers; Apple’s own security staff, along with local police, were called in to clear the store and restore order. An update to the article states that all four Chinese Apple Stores are now requiring each customer to show his/her identity card when purchasing an iPhone 4, and are limiting sales to just one per customer. In addition, Apple employees are unboxing the iPhone 4 units for customers and activating the phones immediately, preventing scalpers from purchasing the phones and reselling them as “brand new.”