[Doc HM]

For shame!

26.7 billion $ revenue
6 billion $ profit

Mac sales up 23%. Nice to see the core product is still rolling along although I would imagine that's mostly laptop sales. I can't imagine Apple managed to sell many MacPro's.

iPod sales down 7%, I guess everyone already has one and many people are rolling an iPod purchase into their phone or pad buying.

Still it's a pretty strong performance, strong enough that the market forgot to punish them for not doing even better despite the previous day's news.

[P]

All those numbers are compared to the year ago quarter, for clarity.

Cook commented on the Mac sales - a lot of the increase are the new MBAs - but the biggest news is the total iPad sales. 7.3 million in the quarter bringing it to 14.8 million in the first year. That's WAY over expectations before launch.

[Doc HM]

Originally Posted by P 

All those numbers are compared to the year ago quarter, for clarity.

Cook commented on the Mac sales - a lot of the increase are the new MBAs - but the biggest news is the total iPad sales. 7.3 million in the quarter bringing it to 14.8 million in the first year. That's WAY over expectations before launch.

Indeed and Q1 includes the big Christmas buy so you would expect the figures to be up as it's the biggest quarter. But by any measure it's a good set of figures, that's just adding to Apple cash pile. Surely they have to buy something soon. No one needs $50 bil in the bank in cash.

[ort888]

What this tells me is that it's time for Apple to lower their prices.

I mean, I get that they are going for this whole "premium brand" deal and that obviously people are buying their products... but at the same time... jimminy xmas... this stuff is really expensive and their profit margins are through the roof.

I'm of the opinion that lowering Mac prices by like 25% across the board would send sales into a whole new stratosphere. Or at least focus on getting some better low end offerings.

They should shoot for a $499 Mini, a $799 iMac and a $799 laptop of some sort. And some form of expandable desktop that isn't $2,500 freaking bucks.

About a decade ago you could get an iMac for $599 and a nice low end tower for $1599. The Mini launched at $499.

Today a Mini is $699, an iMac is $1,199 and a tower is $2,500. What the hell?

Apple seems to be the only tech company in town whose prices are actually going up.

[P]

Originally Posted by ort888 

What this tells me is that it's time for Apple to lower their prices.

I mean, I get that they are going for this whole "premium brand" deal and that obviously people are buying their products... but at the same time... jimminy xmas... this stuff is really expensive and their profit margins are through the roof.

They did warn that profit margins would take a hit next quarter. Guesses are more expensive components, but they're just guesses. Note that they're STILL supply constrained on the iPhone, so no price drops there.

Originally Posted by ort888 

I'm of the opinion that lowering Mac prices by like 20% across the board would send sales into a whole new stratosphere.

Well, they can't really do that - Mac margins aren't that large, especially not at the low end - but they can make cheaper Macs without really compromising the premium image. I doubt it though - Apple seems to believe that you can't win market on price in the computer business any more, and would rather take a bath on things like the iPad where the market is not so set in its ways.

Originally Posted by ort888 

They should shoot for a $499 Mini, a $799 iMac and a $799 laptop of some sort.

About a decade ago you could get an iMac for $599 and a nice low end tower for $1599. The Mini launched at $499.

Today a Mini is $699, an iMac is $1,199 and a tower is $2,500. What the hell?

Apple seems to be the only tech company in town whose prices are actually going up.

While I agree that Apple should make cheaper low end products, I'm not sure where you found that $599 iMac. I can't find a regular price less than $799 anywhere, and that price must be seen as an exception as prices were significantly higher both before and after.

Also, you have to look at "the boxes" (use cases) again. The original iMac was a basic computer for checking email and browsing the web. It isn't any more - that role shifted to the Macbook a while back and Apple probably wants it to be the iPad in the future. The mini also left its role as a try-it-out box and went the HTPC route, which is why the price was allowed to rise. The one box of those that makes sense for Apple to make is the white Macbook at $799.

[ort888]

No, you're right. The cheapest iMac was $799 in the year 2000.

Still, you're selling it short. Yes, it was nowhere near as powerful as a tower, but it was way more then a surfing/email box.

Sometimes people sell lower end computers short. You don't need to be on the cutting edge to do cool things with your computer. Someone with a cheapy iMac in 2000 could do all sorts of cool stuff. It wasn't completely crippled.

I guess ultimately it would be stupid for Apple to lower prices, when they are doing so well with prices where they are. But as a consumer I find it frustrating, and it's definitely slowing down my purchasing. In my mind everything has a value... and Apple's prices do not line up with my perceived values for their products.

[P]

Originally Posted by ort888 

No, you're right. The cheapest iMac was $799 in the year 2000.

Still, you're selling it short. Yes, it was nowhere near as powerful as a tower, but it was way more then a surfing/email box.

I know you COULD do more with it, but the target customer for the base iMac was exactly that. That's where the original i came from - Internet. Apple then kept dropping the price of the base model and adding new ones above it. The $799 model explicitly removed the Firewire port to remove the ability to edit video, because Apple wanted you to buy a more powerful model for that. With the iMac G4, the old use case was in essence gone, and the bottom iBook slid in just below it pricing wise, taking over the position of the original iMac before dropping even further in price. Until the introduction of the iPad, it (or the Macbook) held that slot. It will be very interesting to see what happens with it now that we have both the iPad and the MBA to compete with it. My hope is a price drop to $799, but I honestly don't really think so.

[chabig]

Originally Posted by ort888 

I'm of the opinion that lowering Mac prices by like 25% across the board would send sales into a whole new stratosphere.

What would that accomplish, exactly? Apple is about the only company in the world that doesn't chase market share. It's worked well so far.

[mduell]

Huh, consensus estimates were high for both Macs and iPods.

[Eug]

Yeah, make the profit in volume, or make it on margins. Apple has been swimming in the profits, based on high margins, with significant increases in volume over time. No need to dramatically increase volume all of a sudden at the expense of profit margins.

Apple this way can grow nice and steadily, and I suspect a big growth area in the future will be enterprise, even if Apple isn't aiming for enterprise. I'm already seeing at least one large and sometimes stodgy organization here going Mac-only for road warriors... to my surprise.

[The Godfather]

But enterprise is dominated by enterprise-priced (aka even cheaper) Dell computer fleets. This is akin to asking Sony to price-match eMachines.

There aren't enough Golman Sachs to support an elite business computer market.

[Eug]

Except it's already happening, at least on the laptop side. While they might not get all the secretaries' low end PCs changed to Macs, as I said I already know of a company which is outfitting its 3-digit number of road warriors with MacBook Pros. Furthermore, unlike companies which offer the option of MBPs, these will be mandatory.

I dont know the exact reasons. However, I suspect it's at least four fold:

1) Ease of administration (and personal preference of IT dept. and executive).
2) Aesthetics, which actually matters somewhat when dealing with certain clients.
3) Weight.
4) MS Office is fully supported.

[freudling]

Like some others, what I found baffling was the lack of any real questions about Steve Jobs. Yes, it is a private matter but that is the biggest news of any I think: that's he's gone on another medical leave of absence.

I did listen to the call and nothing was said. I suspect the analysts were briefed beforehand making them aware that no questions about Steve Jobs would be fielded or something like that. That's all I can think of.