IP Democracy: iPod Sales, Profits Soar at Near-Perfect Apple

I have been waiting for Apple to screw up — get lazy, lessen its obsession with quality, watch its lunch get eaten by competitors or something that will fundamentally signal that the Cupertino-based company has begun its inevitable decline. Judging from Apple’s most recent quarterly earnings results, issued today, I’m going to have to wait for a very, very long time to see Apple’s shine start to dim (the boring and overblown backdated options thing notwithstanding.)

Not only has Apple not stumbled, it also keeps soaring. For its fiscal Q1 07 (for the calendar quarter ended 12/31/06), Apple posted a stunning 78% increase in net income, year-over-year, based on a 24% hike in revenue. Net income for the company rose to slightly more than $1 billion, compared to $565 million during the year-ago quarter. Revenues jumped to $7.1 billion, compared to $5.7 billion during fiscal Q1 06.

iPod sales, which more than doubled year-over-year, drove the growth. The number of iPod units sold leaped by 141% to 21.1 million during the quarter, up from what was then a record-breaking 14 million units shipped in Q1 06. iPods accounted for nearly half of Apple’s revenue, or $3.4 billion, 120% higher than the revenue generated by the portable devices in Q1 06.

And here’s the thing: not too long ago, some Wall Street analysts were predicting that Apple’s iPod sales would decline by right about now because, after all, the product is getting pretty mature, even if Apple has rolled out a number of differentiated models. The theory was that Apple had to come out with an iPhone or else it faced stagnant growth.

Well, here we are — iPods sales show no real signs of a slow-down and Apple will hit the market mid-year with what will no doubt be a monster hit, the iPhone. Even Mac sales are rising — the number of units shipped jumped 28% year-over-year to 1.61 million during the quarter.

It’s hard to think of any other company in the tech or communications sector that is in a better position.

Posted by Cynthia Brumfield on January 17, 2007 8:15 PM to IP Democracy