Tech giant Apple announced record results for revenue and Mac shipments overnight, with third quarter revenue of $US15.7 billion and net profit of $US3.25 billion beating analysts’ expectations.
The company also confirmed the price of its plan to distribute free cases to iPhone 4 owners will cost $US175 million in deferred revenue.
Apple shares rose by 3% after the announcement to about $US251 on the NASDAQ, after the company confirmed its $US3.25 billion net income figure represented a 77% increase from $US1.83 billion during the same period a year ago.
The introduction of the iPad is one of the main contributors to Apple’s solid results, with 3.26 million units sold during the third quarter. This means the new gadget nearly outsold the record 3.47 million Macs sold during the quarter, a 33% increase from the same period in 2009.
This number is well above market expectations. Last year, Piper Jaffray analyst Gene Munster wrote in a research report that if the iPad cost about $US600 million and sold two million units, Apple would gain about $US1.2 billion.
Instead, the minimum price is $US499, and coupled with the 3.26 million units sold that puts revenue generated by iPads at a minimum of $US1.6 billion, or about 10% of overall income.
Apple also announced it sold 8.4 million iPhones during the quarter, a 61% increase over the year, although that number is expected to increase during the next quarter when more people start buying the iPhone 4. iPod sales declined 8% to 9.41 million, and analysts expect that number will continue to drop as more users take up iPhones.
The company also confirmed its gross margin fell to 39.1%, down from 40.9%, which analysts have said is likely due to the relatively cheap cost of the iPad compared to Apple’s other products.
However, the company also noted it will spend $US175 million in deferred revenue in order to fix the iPhone 4 antenna issue by distributing free cases. But chief executive Steve Jobs says the company is happy with the results.
“It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4. iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”
As for the year ahead, Jobs said the company still has “amazing new products to come”. Chief financial officer Peter Oppenheimer also said in a release the company expects $US18 billion in revenue for the next quarter.
Perhaps the most interesting revelation of the day, however, was Oppenheimer’s confirmation the company’s huge data centre in Carolina will be complete this year. “It’s on-schedule,” he said in a conference call. “We expect it completed by the end of the calendar year.”
The official company line is the data centre will be used to support Apple’s iTunes and App stores. However, various tech analysts point out the new facility is several times larger than the company’s current centres, leading many to believe it could host the rumoured cloud-based iTunes model.
Several publications have published rumours over the past year stating Apple will introduce a new web-based model for iTunes, which will allow users to listen to their music through any computer connected to the internet.
The rumours come as Google confirmed earlier this year it will be launching a music platform for Android-based devices.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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