iLounge

By Dennis Lloyd

Publisher, iLounge
Published: Wednesday, July 14, 2004
News Category: Apple

Apple today announced financial results and sales statistics for its fiscal 2004 third quarter ended June 26, 2004. Of interest to iPod lovers: 860,000 iPods were shipped during the quarter, representing a 183 percent increase in iPods over the same quarter last year. By comparison, Apple shipped 876,000 Macintosh units, representing a 14 percent increase in CPU units.

For the quarter, the Company posted a net profit of $61 million, or $.16 per diluted share. These results compare to a net profit of $19 million, or $.05 per diluted share, in the year-ago quarter. Revenue for the quarter was $2.014 billion, up 30 percent from the year-ago quarter. Gross margin was 27.8 percent, up from 27.7 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter’s revenue.

On possible future iPods: A tantalizing first possible bit of information on new iPods was dropped casually during Apple’s financial results conference call with analysts. Eleven minutes into the conference call, Apple CFO Peter Oppenheimer mentioned that a “higher mix of iPods” is planned for the September quarter, with a commensurate decrease anticipated in Apple’s gross profit margins. Apple was not asked and did not clarify whether its lower margins would be attributable to lower iPod prices, more expensive components, or greater shipments of iPod minis relative to third-generation iPods.

On current models: “the [iPod] mini demand far exceeds the supply,” in the United States is “staggering,” with overseas ordering “unprecedented.” On possible partnering with another company to secure additional iPod mini Microdrives: “We will do what is necessary to increase the supply to try to get closer to demand.” Supply of iPods this quarter is expected to be “significantly higher” than previous quarter, but demand is expected to visibly outstrip supply through the end of the year. Based on surveys and anectodal evidence, Apple currently believes that users having great experiences with iPods are coming to Apple to buy computers, as well. 

On iTunes generally: “We couldn’t be happier with all the success we’re having…” The iTunes Music Store generated a “small profit” overall, and is the market leader in the United States. iTMS Europe is “by far the leading music store in U.K., France and Germany,” and European customers were attracted by Apple’s “total solution” (hardware and software) to their music needs. “As the Music Store launched, iPod sales began to move with it. There’s a definite correlation there[.]”