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.”
Membership club Costco, the third-largest retailer in the U.S., is preparing to cease carrying iPods, according to an iLounge source who asked not to be identified. Based on the report, which notes that iPods have already disappeared from the company’s web site, Costco will stop carrying the iPod after being unable to stock the iPad, which has just been offered to or become available at competing retailers including Target, Walmart, and, soon, Sam’s Club. In checks with several Costco stores, iLounge found ample supplies of recently-released fourth-generation iPod touch units; our source suggests the company is simply getting rid of left-over stock. Costco has been known to drop popular products over past disagreements; in 2009, it stopped carrying Coca-Cola products over a wholesale pricing disagreement with the Atlanta, GA-based soft drink maker.
AT&T has announced that it will sell all three iPad Wi-Fi + 3G models directly to business customers. Without providing specifics, the company also said that it will offer “attractive” post-paid mobile broadband plans which will be available through AT&T business representatives beginning Thursday, October 28, the same day both it and Verizon Wireless launch retail sales of the device. “iPad is a great fit for our enterprise customers across a wide range of industries who are looking for ways to increase business productivity and offer greater flexibility,” said Michael Antieri, President of Advanced Enterprise Mobility Solutions with AT&T Business Solutions. “This new offer further strengthens AT&T’s commitment to provide businesses with the tools they need to accelerate mobility-led productivity.” In addition, AT&T will offer the iPad for corporate purchase with a corporate service subscription.
During a recent conference call, Dirk Meyer, CEO of Advanced Micro Devices (AMD), offered up his opinion of the effect the iPad was having on the portable computer market. “Clearly, in the last quarter or two, the tablet has represented a disruption in the notebook market. If you ask five people in the industry, you’ll get five different answers as to what degree there’s been cannibalization by tablets of either netbooks or notebooks,” Meyer said. “I personally think the answer is both, and given the pretty high price points of the iPad, there’s probably some cannibalization even of mainstream notebooks.” Best Buy CEO Brian Dunn recently said the iPad was eating into sales of traditional laptop PCs by as much as 50%, but soon backtracked on his statement.
The New York Post has launched its new iPad application, a digital edition of the daily newspaper. It offers all the key sections of the paper—news, Page Six, opinion, Pulse, business and sports—and also lets users design their own front page to share with friends, save issues for later reading, view photo galleries and videos, and share stories via e-mail, Facebook, and Twitter. Notably, the app is also the first digital iPad publication to offer in-app subscription purchases. The $1.99 price of the app itself includes 30 days of introductory access, after which users may buy monthly access for $6.99 per, or purchase a year’s subscription for $74.99. Previously, iPad periodical readers either had to purchase individual digital issues one at a time, or be either an online or print subscriber and enter their information for access. A report from last month indicated that Apple is developing a digital newsstand for the iPad aimed at helping publishers sell subscriptions, and new software to make it easier for publishers to create digital versions of magazines and newspapers. The New York Post app for the iPad is available now from the App Store. [via Forbes]
Verizon Wireless has posted a Frequently Asked Questions document offering further details of its new iPad Wi-Fi + MiFi 2200 bundles and the associated data plans. According to the FAQ, the bundle will be available at Verizon’s stores, verizonwireless.com, via telesales, and through business-to-business sales representatives, but will not be available from Apple. In addition to the $20 for 1GB monthly plan, Verizon is also offering a $35 for 3GB plan, and a $50 for 5GB option; overages will be charged in 1GB increments and will cost $20, $10, or $10, respectively, depending on the plan. Notably, customers will need to sign a service agreement for the 3G plans, but the plans are available on a month-to-month basis without any termination fee. The document also notes that the MiFi 220 is a 3G-only device, and neither it nor the iPad can be upgraded to support 4G networks.
Apple has been granted three noteworthy patents relating to the multi-touch technology found in the iPad, iPhone, and iPod touch. The first patent, entitled “Portable Electronic Device with Multi-Touch Input,” describes a method of input that includes “displaying an object on a display surface of a portable electronic device; detecting multi-touch input associated with the object; determining, based on the multi-touch input, an operation to be performed on the object; and performing the operation on the object,” and also mentions gesture recognition and Web page rendering in a multi-touch environment.
The second patent, “Ellipse fitting for multi-touch surfaces,” covers the tracking of multiple fingers and palm contacts as approach, touch and move across a proximity-sensing, multi-touch surface, and the integration of different types of manual input including typing, direct manipulation, and handwriting. The final patent, “Simultaneous Sensing Arrangement,” discusses multi-touch touch-sensor devices and the methods they use to detect and understand touch placement and movement. [via Patently Apple]
G5 Entertainment has released the iPad version of its popular Virtual City simulation game. Released last month for the iPhone and iPod touch, Virtual City is a city-building simulation where players develop their cities to meet specific goals by addressing transportation, entertainment, industrial and environmental needs while also building housing and providing city services such as health care, public safety, waste collection and mass transit. Virtual City HD brings the iPhone and iPod touch gaming experience to the iPad with graphics and controls optimized for the larger screen and includes a new Sandbox Mode allowing players to build their own cities from the ground up in addition to playing through the dozens of in-game scenarios. Virtual City HD is available from the App Store for $10; a free lite version is also available.
AT&T and Verizon Wireless have each announced that they will begin offering the iPad in their stores beginning on October 28. AT&T will offer all three models of the iPad Wi-Fi + 3G at its more than 2,200 stores, while Verizon Wireless will offer the three iPad Wi-Fi models bundled with a Verizon MiFi 2200 Intelligent Mobile Hotspot for the same prices as the equivalent iPad Wi-Fi + 3G models: $629 for 16GB units, $729 for 32GB models, and $829 for 64GB devices, making the relative price of the MiFi $130. The MiFi 2200 is a portable, battery-powered hotspot that uses Verizon’s 3G cellular network to broadcast a Wi-Fi signal to up to five devices, including the Wi-Fi-only iPad, as well as the iPod touch and computers, eliminating the need for devices to have built-in cellular data hardware.
Verizon’s pricing for the bundle compares favorably with its listed retail MiFi price of $270, though the MiFi costs more than it would with a two-year Verizon contract; it is being offered for free after a $100 online discount. However, Verizon will offer a monthly access plan for iPad customers of up to 1GB of data for $20 a month—half the price and quadruple the data of the company’s traditional 250MB for $40/month MiFi offering—yet will provide iPad service on a month-to-month, no contract basis, a sign that a major deal was struck with Apple to improve upon its expensive current data plans to attract iPad customers, and possibly future iPhone customers, as well. Verizon will also offer the iPad in its stores on a standalone, un-bundled basis. “This is the perfect pairing for holiday travels,” said John Stratton, chief operating officer for Verizon Wireless. “iPad together with the nation’s largest and most reliable 3G data network allows customers to easily connect on the go wherever they are.”
Sam’s Club, the warehouse club owned and operated by Walmart, has announced plans to offer the iPhone and iPad in its membership warehouse stores. The Street reports that the announcement was made during Walmart’s annual meeting this morning; no timeframe was given for when the devices would hit store shelves. Additionally, the company said it was attempting to increase the quality in its consumer electronic categories, and that it will offer non-food in-store demos to help facilitate growth in other categories. The announcement comes at a time when a number of retailers, including Walmart, Target, and Best Buy, have been adding the iPad to their Apple device offerings ahead of the holiday season.
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.”
In its continuing effort to expand iPad distribution ahead of the holiday shopping season, Apple has secured a place for the iPad on the shelves of select Walmart stores. Citing an internal Walmart email, Mac Rumors reports that through the end of October, Walmart will be rolling the iPad out to approximately 1,000 stores, with plans to expand iPad sales to another 800 locations in November. The email suggests that Walmart will offer all six models of the iPad, with initial inventory to be limited to five units for the store to which the email was sent. Not long after publishing the initial email screenshots, a photo showing an iPad for sale on the shelves of a Denver, Colorado Walmart was added to the report, indicating that the company’s roll out of the tablet has already begun. In recent weeks, Apple has increased the number of retail outlets carrying the tablet computer by expanding iPad sales to all U.S. Best Buy stores and by rolling the device out at Target stores.
Update: Walmart has confirmed that it will offer all six models of the iPad in hundreds of its stores beginning on Friday, Oct. 15, and will expand to 2,300 stores in November. In addition, Walmart.com will sell the iPad through its Site to Store service, which provides free shipping of online orders to a local Walmart store.
CBS Mobile and Chillingo have released a new universal iOS game based on the Emmy-nominated television series Numb3rs. In Numb3rs The Game, fans take on the role of an FBI consultant tasked with bringing down a sinister criminal network in Los Angeles, working alongside popular Numb3rs characters such as Charlie and Don Eppes. Numb3rs is a logic action game where players must solve mathematical puzzles and equations and play various mini-game missions such as diffusing bombs and interrogating suspects. The game also provides multiple difficulty levels and integrates with Chillingo’s Crystal social gaming platform for posting scores to leaderboards and tracking achievements. Numb3rs The Game is a universal iPad/iPHone application and is available from the App Store for $1.
Electronic Arts has announced its fall 2010 lineup of iPhone, iPod touch and iPad games. Upcoming titles include SimCity Deluxe for the iPad and EA Sports FIFA 11, EA Sports NBA Elite 11, EA Sports MMA, Battlefield Bad Company 2, Heroes Lore and High Caliber Hunting for the iPhone and iPod touch.
SimCity Deluxe for iPad will bring the popular iPhone and iPod touch title to the iPad screen with higher-resolution HD graphics including textured terrain, a larger interactive display, controls optimized for the iPad screen and new game features such as simultaneous disaster strikes. SimCity Deluxe for iPad is scheduled for release in November.
Three new EA Sports titles have also been announced for the iPhone and iPod touch, all scheduled for release later this month. EA Sports FIFA 11 will deliver updated players, teams and stadiums to the 2010 edition, high-resolution Retina Display graphics and improved dual control options to provide advanced controls for experienced players and simplicity for casual players.
Mercedes-Benz Financial has announced that the results of its limited iPad pilot program were so “overwhelmingly positive” that the company is expanding the program to all 355 dealerships in the U.S. During the pilot phase, select dealerships in the U.S. were letting potential customers fill out paperwork on the spot using iPads, instead of forcing them into a dealership office to complete the sale, with the hopes of preserving more sales lost at the last minute. “We were surprised,” Andreas Hinrichs, vice president of marketing for Mercedes-Benz Financial, said in an interview with Macworld. “The feedback was so positive we said, we need to push this out to all the dealers and take the financing process to a new level.” The company will also begin use of the 3G-enabled iPads in its leasing process, allowing customers returning vehicles to watch the post-lease inspection and sign the completed forms using their finger.
In addition, Mercedes is showing off a prototype iPad docking station at the Paris Motor Show. Similar to the one shown at the show by rival manufacturer BMW, the Mercedes mount sits horizontally behind the front seat headrest and allows back seat passengers full use of the iPad while it charges. No pricing or availability information has yet been announced.
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.
Target is not doing the best job when it comes to retailing the iPad, according to a new report. IfoAppleStore reports that while the iPad is in a decent, but not great, position next to Target’s electronics point-of-sale counter—a position also occupied by Apple’s line of iPods—not a single iPad, non-working or otherwise, was available for customers to look at. No information cards or descriptions of the device’s capabilities were on display, and the iPad boxes themselves were locked behind glass doors, with no salespeople available to discuss the product or even remove one from the case. In addition, a small range of iPad accessories, including the iPad Camera Connection Kit, were on display on an end-cap adjacent to the iPad area, but once again, the products were locked down, requiring assistance for purchase. Over a half an hour span on Sunday afternoon, ifoAppleStore reports that not a single person approached iPad display; during the same hour, multiple customers approached the live display of touchable, usable iPads at a nearby Best Buy.
Canadian television network Citytv has launched an official application for watching streaming network content on the iPad. Citytv Video works over both Wi-Fi and 3G connections and provides free, ad-supported access on-demand to popular prime-time content such as Modern Family, Biggest Loser, Cougar Town, 30 Rock, How I Met Your Mother and more. Users can view both full-length programs or short clips of highlights and access both current and previous episodes. The application also provides live streaming of Breakfast Television, Citytv’s daily morning show as well as a catalog of video clips from CityLine and previous episodes of Breakfast Television Toronto. An integrated TV schedule allows users to see what’s airing on Citytv and users can also configure Push Notifications to alert them when new episodes of their favourite shows are available for streaming. The app also provides a viewing history and the ability to flag favorite episodes and share links to content via Facebook, Twitter and e-mail. Citytv Video is available from the Canadian App Store as a free download and supports both the iPad Wi-Fi and iPad 3G. Citytv is owned by Rogers Media, a sister company of Rogers Wireless which provides iPad 3G data services in Canada. Unlike some of the prior iOS apps released by Rogers Media, however, a Rogers data plan is not required to use this app.