Apple sets revenue record during recession

Execs say Mac sales up 9 percent, also call netbooks 'inferior' and dodge questions about Jobs

Although the recession is deepening and sales of rivals are softening, Apple yesterday announced it had set a single-quarter revenue record in the last three months of 2008, selling more than 2.5 million Macs and 4.3 million iPhones.

Apple sold 1.8 million notebooks and 728,000 desktops in its first fiscal quarter, which ended December 31, 2008, an increase of 34 percent for the former, but a drop of 25 percent for the latter over the same quarter last year. Overall, Apple sold 9 percent more Macs during the period than it did in the last three months of 2007, although Mac sales revenue was effectively flat year-to-year.

The number of Macs sold in the quarter was down 3% from the previous quarter.

"Mac sales have not suffered as much as one might have feared," said Ezra Gottheil, an analyst with Technology Business Research. "Apple's rate of growth was much slower, but it's clear that the new MacBook was a major winner."

Apple unveiled new all-aluminum "unibody" MacBook and MacBook Pro notebooks in late October, and counter to what many thought at the time, reduced the price only for the remaining low-end MacBook with the plastic case.

During the quarter, total revenues were US$10.2 billion, a new single-quarter record, said Apple chief financial officer Peter Oppenheimer in a Wednesday afternoon conference call with Wall Street analysts.

During the call, Oppenheimer used the phrase "extremely proud" several times to describe the bottom line for the period, while chief operating officer Tim Cook bragged that Apple had been able to maintain strong notebook sales even in the face of a generally lousy economy.

"We were very pleased with the overall Mac portable share gain," said Oppenheimer, who called out the unibody notebooks as driving sales since their October launch.

According to outside analysts, however, Apple actually lost market share, at least in the US, when desktops were added to the mix. Last week, Gartner's Mikako Kitagawa estimated Apple's domestic share of sales had slipped to 8 percent, down from 9.5 percent the quarter before.

Oppenheimer acknowledged the slide of desktop sales, which were off 25 percent year-to-year and down 22 percent from the previous quarter, but as he did, he put forward a pair of reasons for the plummet. One, he said, was the very strong sales of the just-released iMac in late-2007, and the tough time matching that volume in 2008. The other reason was simply a reflection of the market as a whole, which increasingly tilts toward laptops, he said.

Gottheil added a third: slowing sales in the K-12 education market, which typically buys desktops.

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Gregg Keizer

Gregg Keizer

Computerworld
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