News from category ‘Financial’

Chinese customers prefer to buy Apple’s iPhone than Nokia’s smartphones, according a report published by the investment bank Morgan Stanley. As more than a third of 2,050 surveyed urban Chinese mobile phone users express a preference for iPhone, twice that for Nokia's models.

Apple presence on Chinese smartphone market grew significantly in 2011. Not surprisingly that over fiscal 2011 the company managed to earned as many as $13 billion, comparing with $3 billion in fiscal year 2010. Morgan Stanley says it believes "China could surpass the US as Apple's largest market in about three years, adding nearly $30 billion more per year to the top-line along the way." The firm notes that sales of iPhones are also driving purchases of related Apple products, noting that Mac use is nearly four times higher among iPhone users, where Mac user share jumps to 35 percent from the standard 9 percent of the general population.

Morgan Stanley’s survey demonstrates that Apple increased its share by 6 percentage points to reach 34 percent of planned purchases in the region. Nokia dropped 8 percentage points to make up just 16 percent of the nation's planned purchases.

According to a research note released by the investment bank Morgan Stanley on Wednesday, a lower-priced iPhone could generate a nearly three-fold increase in demand for Apple in China. The bank conducted research among Chinese customers who hesitate to but the iPhone. 85 percent of them called price as a key factor that prevents them from buying Apple’s smartphones. The right price point could increase demand for iPhone in three times in China.

The maximum price that Chinese customers are ready to pay is $425. But those who said that they were not going to buy an iPhone could afford to pay $344. Nearly 80% of those who took part in the research marked Apple as the leading brand in China. But in last quarter company's share of mobile phone purchases in the region fell from 12% to 7%.

In the third quarter of 2011, China area became the company's second largest market, behind only the U.S. China is "the fastest growing region by far."  China sales of iPhone were $4.5 billion in the September quarter, 16 percent of Apple’s total revenue, comparing with $3.8 billion Apple earned in the June quarter. Meanwhile, one analyst believes that the mobile market in China poses as much as a $70 billion opportunity for Apple.

In the third quarter of 2011 Samsung gained the lead and China’s ZTE became the fourth-largest cell phone manufacturer moving Apple to fifth place. Cupertino-based company for the first time fell short of expectations and shipped 17.07 million iPhones in the third quarter, a 16 percent quarterly decrease in sales. As you remember, in June quarter Apple sold 20.34 million iPhones, which allowed the company to beat Samsung and Nokia and become the leading smartphone manufacturer in the world.

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HP, the largest PC manufacturer, has announced that after evaluation of business alternatives for Personal Systems Group they decided to not sell off the PC unit and leave it within the company.

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According to Forrester research, Mac business users are more productive than their PC counterparts, because MacBook laptops from Apple tend to be more reliable and require less maintenance than PCs. Forrester issued a new report entitled "People are Bringing Macs to Work - It's Time to Repeal Prohibition" in order to encourage companies to support Apple hardware in the workplace.

Although the use of Mac in enterprises is increasing, approximately 41 percent of companies that took part in the research do not officially allow their employees to use Mac. Of course, users find ways how bypass company restrictions and use their Mac at work.

Moreover, Mac sales in the enterprise sector have seen a huge spike in 2011. In May, Apple announced that corporate Mac sales grew by 66 percent. But sales of iOS products are more significant. 93 percent of Fortune 500 companies are deploying or testing the iPhone, while 90 percent are doing the same for the iPad.

Yesterday Apple filled its 2011 annual report with the U.S. Securities and Exchange Commission. The report includes several interesting facts about company:

• Apple now has 60,400 employees comparing with 46,600 employees last year. 36,000 employees work in the retail division of the company.
• Apple enlarged number of stores up to 357. In this year the company opened 40 additional stores. The average number of employees per store grew from 83.6 to 100.8.
• The company spent $933 million on advertising, enlarged number of investment into research and development up to $2.4 billion.
• Apple also mentioned some risk factors for investors:  "if [Apple] is found to have infringed on intellectual property rights", "support from third-party software developers", "the Company’s ability to obtain components in sufficient quantities", and numerous more.
• As of September 24, 2011 Apple has 13.2 million square feet of building space, among them about 7.0 million square feet are leased building space.

Reuters suggests that Steve Jobs’ authorized biography by Walter Isaacson may become the best-selling book of 2011 on Amazon. But it is not surprisingly. Apple’s fans and others show extraordinary interest in the late Apple CEO’s life, especially after his death early this month.

The book is the best-selling book on Amazon.com and is also listed as the top-selling electronic book on the company's Kindle eBook store.

"The way things are trending, it could very likely be our top-selling book of the year," Amazon spokeswoman Brittany Turner said in a statement.

But now the book is ranked #13 on Amazon’s list of best sellers. Noteworthy, some analysts predict that the digital version of Steve Jobs’ biography outsell the print version. It is know that digital sales of best sellers are typically coming at 50-70% of total sales. Though, Amazon prefers do not comment the difference between digital and physical version of the book.

Investment bank UBS issued a note to investors where it suggested that Apple would sell about 42.5 million iPhones worldwide in this quarter. But they expect that international adoption of Apple's newest handset could be slow when compared to the U.S. This might be caused the fact that Siri, the 4S-exclusive voice-recognition feature, only supports English, French and German. So in the United States sales of iPhone 4S is likely to top 11.7 million in the upcoming quarter.

"If Apple is able to manufacture and sell the estimated 42.5 million units, earnings per share of the company's stock would drive an incremental $3.09 to the estimated $9.47 for the December quarter.”

Both AT&T and Verizon confirm that the iPhone 4S release slowed sales, causing the company to miss analysts' expectations for the last quarter of the 2011 fiscal year. But despite that fact the bank gives Apple a 12 month buy rating with a price target of $510.

Bloomberg reports, citing research firm Strategy Analytics, that Android-based tablets increased their share in the tablet market during the third quarter.

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We have already seen some teardowns and estimates of the cost of the new iPhone 4S by iFixit and Chipworks. Now iSuppli offers its teardown and some new facts.

In the case of the iPhone 4S, [IHS iSuppli analyst Andrew] Rassweiler estimates that the BOM cost ranges from $188 for the 16 gigabyte version of the iPhone 4S to $207 for the 32GB version and $245 for the 64GB version. Apple and its carrier partners sell the phones for $199, $299 and $399 respectively, typically with a two-year contract for wireless service that carriers use to subsidize the cost they pay Apple.

iSuppli didn’t find in the iPhone 4S a noise cancellation chip from Audience that was found in the iPhone 4. Such function may be implemented directly into A5 cheap that costs about $15. While iFixit found Toshiba flash memory in its iPhone 4S unit, IHS iSuppli expressed some surprise at finding Hynix memory in its unit. But as far as we know, Apple sources flash memory chips from different manufactures. They didn’t managed to find the manufacturer of the camera sensor, but estimated the cost of the camera module at $17.60.

In October 2008, long before the iPad made its debut, then Apple CEO Steve Jobs said this:

There are some customers which we chose not to serve. We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there’s a lot of them. We’ve seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continue to try to add more and more value to those products in those customer bases we choose to serve.

But Apple finally launched a $500 computer - the iPad.  The least expensive model costs $499. But the iPad average selling price for the three calendar quarters of 2011 was $628 that is more than the average price of Windows PC. For the same period the iPhone ASP was $653.

These numbers prove that the average selling price for all three Apple’s most profitable categories – the Mac, the iPhone and the iPad – is higher than average selling price of Windows PC that sold at U.S. retail (for the first three quarters of 2011) for $491.

According to The Wall Street Journal, Apple has been dethroned by Samsung one quarter after the company became the largest smartphone manufacturer in the world. As a person familiar with the situation said, Samsung shipped over 20 million smartphones in third quarter, beating Apple as well as the largest cellphone manufacturer Nokia.

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On Tuesday Apple announced that it has $81.57 billion. As usual different Apple analysts and watchers try to guess and suggest what the company should do with its huge cash reserves. Now Apple CFO Peter Oppenheimer oversees $9.815 billion in cash and cash equivalents, $16.137 billion in short-term marketable securities, and $55.618 billion in long-term marketable securities. Despite Apple huge cash reserve, the company invests its money very carefully.

Apple’s CEO Tim Cook noted that “the cash wasn’t burning a hole in our pocket” and that the company “didn't want to do silly things”. In recent months Apple acquired several companies, intellectual property, invested in the supply chain and in new stores. Moreover, the two-thirds of Apple’s cash reserve are offshore.

“The U.S. government taxes U.S. businesses on income earned worldwide, but allows them to defer taxes on the money until it is brought back to the United States. As a result, American corporations like to keep the money abroad, particularly as they increase investment overseas,” Reuters explained.

Yesterday Apple’s current CEO Tim Cook reported that iPhone sales fell short of expectations at 17.07 million units in the fourth fiscal quarter. iPhone sales dropped by 2.4 million. Record iPhone sales for the current quarter would come in above the 20.34 million units set in the third fiscal quarter (second calendar quarter) of this year.

Decline in iPhone sales, as Cook noted, caused by various rumors related to the Apple’s smartphone, especially, when Apple missed its usual June introduction of new hardware. Most of the rumors were about a dramatically redesigned "iPhone 5" offering a larger but thinner design than the current iPhone. Such rumors were incorrect and Apple might still be working on the iPhone 5.

Yesterday Apple posted financial results for the fourth fiscal quarter of 2011 and the full fiscal year. The company posted record-breaking revenue of $28.27 billion and net quarterly profit of $6.62 billion, or $7.05 per diluted share. Gross margin was 40.3 percent. Apple now has $81.57 billion in cash and marketable securities.

For the 2011 fiscal year, Apple reported revenue of $108.25 billion and net profit of $25.92 billion, or $27.68 per diluted share. Gross margin for the year was 40.5 percent and Apple's yearly profit and revenue were company records with Apple reporting more than $100 billion in yearly revenue for the first time ever.

Apple shipped 4.89 million Macintosh computers during the quarter, sold 17.07 million iPhone, up 21 percent from the year-ago quarter, and the company also sold 6.62 million iPods during the quarter, representing 27 percent unit decline over the year-ago quarter. Apple also sold 11.12 million iPads during the quarter, up 166 percent over the year-ago quarter. Apple also announced over 6 million copies of Lion had been downloaded through the Mac App Store since July 20th (when the operating system went on sale), with Mac users approaching 60 million worldwide.

In the first fiscal quarter of  2012 (the third calendar quarter) Apple expects to gain revenue of $37 billion.

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