Despite Economic Slump, Apple Posts Increases in Sales, Revenue

Appleā€™s Growth Slows, but Company Beats Own Records

by Anton Shilov
01/21/2009 | 10:54 PM

In spite of the very tough situation on the market, Apple could sustain sales growth of its key products in the fourth quarter of fiscal 2009. Moreover, the company reported record revenue, which exceeds $10 billion and record net quarterly profit. It is remarkable that the company’s sales structure by region has not changed from the previous year: the company sold 46% of its products outside the U.S., a percent higher than in fiscal 2008.

 

“Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history – surpassing $10 billion in quarterly revenue for the first time ever,” said Steve Jobs, Apple’s chief executive officer. 

Apple posted record revenue of $10.17 billion and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter.

Apple sold 2.524 million Macintosh computers during the quarter, representing 9% unit growth over the year-ago quarter. The company sold a record 22.727 million iPods during the quarter, representing 3% unit growth over the year-ago quarter. Quarterly iPhone units sold were 4.363 million representing 88% unit growth over the year-ago quarter.

Nevertheless, it is not all that rosy for Apple. According to Technology Business Research, the new MacBook and the iPhone 3G, introduced in the second half of 2008, provided all the growth, while revenue from iMac desktop PCs and iPods decreased significantly.

“Apple’s desktop revenues, dominated by the iMac, fell 31% year to year, and iPod revenues decreased 16%. Desktop revenue growth was affected by tightened school district budgets, and spectacular sales in the year-ago quarter, but the main reason for the decrease, TBR believes, is the decline of the desktop PC, especially in the consumer market,” said analyst Ezra Gottheil from TBR market research company.

TBR believes Apple will reduce its gross margin in 1H 2009, in keeping with company guidance and targets, but will not reduce margins to weather the recession. Because the smartphone market is price-sensitive, Apple will eventually reduce entry prices for iPhones to maintain sales, but with network provider subsidies of approximately $400 per unit, TBR believes the company can maintain very strong margins despite price reductions.