- April 26, 2007
Following better than expected quarterly earnings, shares of Apple soared above $100 to hit a new all-time high. As reported late yesterday, Apple saw second quarter earnings come in at $770 million, or 87 cents a share, compared to earnings of $410 million, or 47 cents a share, last year. Analysts were expecting, on average, earnings of 64 cents a share on revenue of $5.17 billion for the quarter. During the quarter, Apple shipped more than 10.5 million iPods and more than 1.5 million Mac computers.
- April 25, 2007
Reporting its second quarter financial results today, Apple said it shipped 10.549 million iPods during the quarter—slightly below some analyst predictions, but a 24 percent increase compared to the same quarter last year. The company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, compared with revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share in Q2 2006. Sales of Other Music Related Products + Services were up 35% over last year’s quarter and 3% over the last quarter of 2007, to $653 million total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories.
“The Mac is clearly gaining market share, with sales growing 36 percent—more than three times the industry growth rate,” said Steve Jobs, Apple’s CEO. “We’re very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline.”
“We are very pleased to report the most profitable March quarter in Apple’s history,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”
Analysis of the company’s figures showed significant double-digit year-versus-year growth in all regions in which Apple operates, except for Japan, which experienced single-digit declines versus the year-ago quarter, and a modest decrease in revenue relative to the prior 2007 quarter.
Updated: During Apple’s Financial Results Conference Call, Apple revealed that iTunes controls 85% of the U.S. market based on the latest data from Nielsen Soundscan. Peter Oppenheimer, Apple CFO, added: “iPods accounted for 44% of total revenue during the quarter… iPod shuffle was especially popular” based on the release of four new colored shuffles in early 2007. Apple also reaffirmed the timing of iPhone outside the US. Europe will see it in the fourth calendar quarter of 2007, and Asia in 2008.
- April 24, 2007
The U.S. Securities and Exchange Commission has filed a federal lawsuit against two former Apple officers, charging that they helped to illegally backdate company stock options. Former Apple general counsel Nancy Heinen and former Apple chief financial officer Fred Anderson were both named for their roles in backdating going back to 2001. Heinen’s case will proceed, while Anderson has settled for $3.5 million in fines and penalties.
“Apple’s shareholders relied on Heinen and Anderson, as respected legal and accounting professionals, to ensure the accurate reporting of the company’s executive compensation,” the associate regional director of the SEC’s San Francisco office said in a statement. “Instead, they failed in their duties as gatekeepers and caused Apple to conceal millions of dollars in stock option expenses.”
In an unexpected statement, Anderson partially blamed Apple CEO Steve Jobs for the backdating complaint against him. “Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on January 2, 2001,” Anderson said. “At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge. He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.”
The SEC said it will not pursue any further action against Apple itself, citing the company’s “extraordinary” cooperation. “Apple’s cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct,” the SEC said in a statement.
- April 24, 2007
Steve Jobs and Jonathan Ive are both in the race for Time Magazine‘s 2007 list of the 100 most influential people in the world. Picking the list has traditionally been the duty of the magazine’s editors, but this year the process is also open to online voting. As of this writing, Steven Colbert was ranked number one, with Jobs sitting at number eight, and Ive at number ten.
- April 23, 2007
The San Jose Mercury News reports that Apple CEO Steve Jobs will likely be cleared in the federal investigation of stock options backdating at Apple. “A Mercury News examination of a massive 2001 stock-options grant to Jobs that was backdated through bogus documentation—the central focus of the federal probe—shows there is scant evidence, if any, to support criminal charges against the Silicon Valley icon,” reports the newspaper. “Despite Apple’s disclosure that Jobs approved widespread backdating at Apple, there is no evidence he directed the backdating of his own grant or covered it up afterward, based on a review of regulatory filings and interviews with lawyers intimately familiar with the grant who asked not to be identified. Without such proof, federal prosecutors do not have the type of egregious misconduct they’ve targeted in the blossoming options scandal.”
- April 16, 2007
Apple CEO Steve Jobs again took a salary of only $1 in 2006, according to an Apple filing with the Securities and Exchange Commission. “The majority of Jobs’ compensation is paid through an equity grant, though he received no new grant in 2006,” reports CNN/Money. “During the year, a 2003 stock grant fully vested, giving him Apple stock now worth nearly $1 billion.”
Other Apple executives also fared well. Apple Chief Financial Officer Peter Oppenheimer realized $56 million in value from stock options during 2006, in addition to a $615,000 salary, a $450,000 bonus and restricted stock valued at $14 million. Apple Chief Operating Officer Tim Cook received a salary of $697,000, a $525,000 bonus, and restricted stock valued at $22 million in 2006.
- April 11, 2007
Following last week’s introduction of a $38 million “iPod bill” in Michigan, a report has surfaced claiming that two of the lawmakers backing the bill made a trip to California to meet with Apple — at least partially on Apple’s dime. According to the Detroit Free Press, Rep. Matt Gillard and House Speaker Andy Dillon, among others, made the trip to San Francisco. Dillon has issued a statement defending the trip, saying he was “one of several lawmakers to take this trip, and I am more convinced than ever that the future for our children lies in education. As we move to the technology age and the knowledge-based economy, it would be irresponsible to separate technology from our K-12 system.” They did not identify the other lawmakers who went on the trip, and Apple has not made their Lansing, MI lobbyist available for comment.
- April 3, 2007
Greenpeace International has Apple placed last in its recent rankings for environmental friendliness among major electronics companies. A spokesperson for Greenpeace claims Apple failed to stop using several types of harmful chemicals in its manufacturing processes, and has yet to make a plan for stopping their use. Apple, meanwhile, is rejecting the rankings, claiming its products are among the “greenest” in the world.
“We disagree with Greenpeace’s rating and the criteria they chose,” Apple spokeswoman Sheryl Seitz said, reading a prepared statement. “Apple has a strong environmental track record and has led the industry in restricting and banning toxic substances such as mercury, cadmium and hexavalent chromium, as well as many BFRs (brominated flame retardants).”
- March 8, 2007
Following Apple being named to Fortune’s list of most admired companies, the magazine has published an interesting article on the beginning of Apple’s retail store effort. “I started to get scared,” said Apple CEO Steve Jobs about depending on large retailers to sell Macs before Apple’s first retail store was opened. “It was like, ‘We have to do something, or we’re going to be a victim of the plate tectonics. And we have to think different about this. We have to innovate here.’” Apple’s 174 stores, which each attract 13,800 visitors a week on average, now produce sales of $1 billion a quarter for the company. The average Apple Store generates sales of $4,032 per square foot a year—more than Saks, Best Buy, and Tiffany & Co.
Jobs told Fortune how he helped kick off the retail effort. “We looked at it and said, ‘You know, this is probably really hard, and really easy for us to get our head handed to us.’ So we did a few things. No. 1, I started asking who was the best retail executive at the time. Everybody said Mickey Drexler, who was running the Gap.” Jobs then went after Ron Johnson, then a Target executive, to run the retail store operations. “One of the best pieces of advice Mickey ever gave us was to go rent a warehouse and build a prototype of a store, and not, you know, just design it, go build 20 of them, then discover it didn’t work,” said Jobs. Interestingly, the first Apple Store prototype was scrapped, delaying the launch of the first store by 6-9 months.
Another interesting detail in the article is that the Apple Store Genius Bar was conceived after the majority of a focus group told Johnson that the best service experience they’d ever gotten was from a hotel concierge. “When we launched retail, I got this group together, people from a variety of walks of life,” says Johnson. “As an icebreaker, we said, ‘Tell us about the best service experience you’ve ever had.’” Of the 18 people, 16 said it was in a hotel. “We said, ‘Well, how do we create a store that has the friendliness of a Four Seasons Hotel?’” The answer: “Let’s put a bar in our stores. But instead of dispensing alcohol, we dispense advice.”
- March 5, 2007
Apple ranks 7th on Fortune magazine’s 25th annual list of the most admired companies. “You could say that Apple has landed—not only on our street corners and in our malls but also, for the first time, on the top ten of our Most Admired Companies list,” writes the magazine. “Apple’s peers have watched it upend industries from computers to music. And now it’s become the best retailer in America. In 2004, Apple reached $1 billion in annual sales faster than any retailer in history; last year, sales reached $1 billion a quarter. And now comes the next, if not must-have, then must-see, product (iPhone).” To create the magazine’s top 20, Fortune survey partners at Hay Group asked 3,322 executives, directors, and securities analysts to select the 10 companies they admire most.
- February 21, 2007
Apple CEO Steve Jobs and Microsoft Chairman Bill Gates will make a rare joint appearance at The Wall Street Journal’s D: All Things Digital conference this year. According to show organizers, they will jointly discuss “the history and future of the digital revolution in an unrehearsed, unscripted, onstage conversation.” Both executives have made multiple appearances at the conference, but this will be their first joint session at D. Jobs will also appear on his own in a separate segment at D to discuss the latest developments at Apple. The conference, which is sold out, will take place May 29-31 near San Diego, California.
- February 5, 2007
Apple Inc. and The Beatles’ Apple Corps said today that they have ended their ongoing trademark dispute and have entered into a new agreement over the use of the Apple name. Under the new agreement, which replaces one from 1991, Apple Inc. will own all of the trademarks related to “Apple” and will license certain trademarks back to Apple Corps. The companies said the terms of settlement are confidential. Apple Inc. won a trademark lawsuit brought on by Apple Corps last year, with a UK judge ruling that the company could continue using its logo on the iTunes Store.
“We love the Beatles, and it has been painful being at odds with them over these trademarks,” said Apple CEO Steve Jobs. “It feels great to resolve this in a positive manner, and in a way that should remove the potential of further disagreements in the future.” Neil Aspinall, manager of Apple Corps said, “It is great to put this dispute behind us and move on. The years ahead are going to be very exciting times for us. We wish Apple Inc. every success and look forward to many years of peaceful co-operation with them.”
Update: We’ve posted an Editorial discussing the potential impact of the new agreement.
- January 26, 2007
Google has again beat out Apple for the top spot in an annual global brand ranking. The survey by online branding magazine BrandChannel.com asked 3,625 branding professionals and students “Which brand had the most impact on our lives in 2006?”. Globally, the top five were Google, Apple, YouTube, Wikipedia, and Starbucks. The North American results, however, saw Apple in first place, followed by YouTube, Google, Starbucks and Wikipedia. “The poll does not take account of economic brand value, the murky science of assigning a financial value to brand, which regularly puts Coca-Cola in first place,” says Reuters. “Neither does it ask respondents to consider whether the brand’s impact is positive or negative.”
- January 17, 2007
In its first-quarter 2007 Quarterly Results Conference Call, Apple Inc. executives provided additional insights into the domestic and international sales of iPods, growth of the iTunes Store, and the potential of both Apple TV and the upcoming iPhone. During his introductory remarks, Apple CFO Peter Oppenheimer noted that music products, including iPod, represented 57% of Apple’s total revenue, versus 59% in the preceding year’s quarter. The company maintained its MP3 leadership share in the U.S. market, boasting a 72% marketshare in December, according to NPD data, and extended its lead in every international territory for which it has market data. Very strong sales through the iTunes Store helped the company’s performance: “other music revenue” grew 29% over the same quarter last year, buoyed by doubled sales of iTunes Gift Cards. iTunes now accounts for 85% of the U.S. market for legal digital music downloads, according to Nielsen Soundscan.
Additional notes from the Conference Call, including Apple TV as the “DVD player of the 21st Century” and potential changes to iPhone before release, are now available below.
- January 10, 2007
iLounge has just announced the winners of its Best of Show 2007 Awards:
Alpine X001 Digital Media Receiver
Altec Lansing iM600 Portable Speaker System
Belkin Bluetooth Dock Adapter for iPod
Belkin Clear Acrylic and Brushed Metal Case for iPod nano
Elgato EyeTV 2.3.3
Griffin Evolve Wireless Speaker System
Harman Kardon Drive + Play 2
iSkin Cerulean Bluetooth Earphones
Macally TunePro Flat Panel Stereo Speaker with AM/FM Alarm Clock
Power Support Silicone Jacket for iPod shuffle
Roxio Toast 8 Titanium
Congratulations to the winners! Full details are now available in this linked article.
- January 9, 2007
Following the introduction of the iPhone today, Apple stock rose $7.10, or more than 8 percent, to end the trading day at $92.57 a share. Meanwhile, being negatively affected by the iPhone, shares of smartphone makers Palm and Research In Motion (RIM) fell sharply. In the wake of the announcement, investors sold off shares of RIM, maker of the Blackberry line of devices, causing the stock to fall nearly 8 percent, or more than $11. Palm, maker of the popular Treo handheld, saw its stock drop nearly 6 percent.
- January 9, 2007
During his keynote presentation at Macworld Expo today, Apple CEO Steve Jobs unveiled the long-rumored iPhone to rapturous applause from the large audience in attendance. Jobs also showed off the retail version of the iTV, now called the Apple TV, and revealed other news such as a company name change and the latest iTunes sales.
• Apple unveils revolutionary iPhone
• Apple TV announced
• iTunes Store sells 2b songs, 50m TV shows, 1.3m movies
• Apple drops ‘Computer’ from company name
• Apple now fourth-largest music reseller in U.S.
• Cisco sues Apple over iPhone name
• iPhone reaction: Press, analysts, competitors and bloggers
• Apple’s Jobs: ‘You don’t want your phone to be like a PC’
• iLounge Macworld Expo flickr photos
• iLounge Apple keynote photo gallery
• Macworld Expo 2007 keynote video
- January 9, 2007
Toward the end of his keynote presentation today, Apple CEO Steve Jobs announced that his company is dropping the “Computer” from its name and will now officially be known as Apple Inc. Jobs noted that of Apple’s four main product lines—the Mac, iPod, Apple TV, and now iPhone—only one was a computer. The name change was more than likely made possible by a settlement last year with The Beatles’ Apple Corps.
- January 8, 2007
The Wall Street Journal is reporting that Apple will announce a mobile phone as early as tomorrow and that the company will use Cingular as its carrier of choice. The Journal reports: “Cingular Wireless is expected to provide wireless service for a new Apple Computer cellphone, people familiar with the situation say. The launch of the new phone and service is expected to be announced as early as Tuesday, these people say. The new product could give Apple access to the huge wireless business, in which nearly a billion handsets are shipped every year, dwarfing the nearly 70 million iPods Apple has sold over the past five years.” The newspaper offers no other details on the phone or service.
- January 8, 2007
While not distinguishing whether his story is based on his own sources or current circulating rumors, John Markoff of the New York Times writes that Apple is set to unveil a mobile phone that may feature “a sleek ceramic case and a transparent touch screen.” Markoff says that “industry executives and competitors” believe Apple has developed “the first of a new generation of devices that are closer to personal computers in pocket form, meaning that they will easily handle music, entertainment, productivity tasks and communications on cellular and other wireless networks.” The Times tech writer notes that “Apple’s business strategy in offering an Apple phone will potentially be as intriguing as its industrial design.” He says Steve Jobs “has been rumored to have entered into an alliance with Cingular,” and that the Apple CEO recently told two associates he was “more excited about his current project than he was about the Macintosh.”