Computing and portable media giant Apple Computer Inc. issued its fiscal Q4 06 earnings report today, defying skeptics, who feared a slow-down in iPod sales would crimp Apple’s style, by showing strong revenue and profit growth. Sales jumped 31.5% year-over-year and 10.5% sequentially to $4.837 billion.
Net income soared 27% year-over-year and 15.7% sequentially to $546 million, as iPod sales stayed strong and Mac sales broke records.
| Apple Operating Data (units in 000s) | |||||
| Q405 | Q106 | Q206 | Q306 | Q406 | |
| Operating Segments | CPU Units | CPU Units | CPU Units | CPU Units | CPU Units |
| Americas | 636 | 515 | 494 | 642 | 781 |
| Europe | 259 | 387 | 316 | 301 | 342 |
| Japan | 71 | 81 | 82 | 79 | 62 |
| Retail | 202 | 193 | 154 | 215 | 323 |
| Other Segments(1) | 68 | 78 | 66 | 89 | 102 |
| Total Operating Segments | 1,236 | 1,254 | 1,112 | 1,327 | 1,610 |
| Product Summary | |||||
| Desktops (2) | 602 | 667 | 614 | 529 | 624 |
| Portables (3) | 634 | 587 | 498 | 798 | 986 |
| Subtotal CPUs | 1,236 | 1,254 | 1,112 | 1,327 | 1,610 |
| iPod | 6,451 | 14,043 | 8,526 | 8,111 | 8,729 |
| (1) Other Segments include Asia Pacific and FileMaker. | |||||
| (2) Includes iMac, eMac, Mac mini, PowerMac and Xserve product lines. | |||||
| (3) Includes iBook and PowerBook product lines. | |||||
| Source: Apple Computer Inc. | |||||
Apple sold 8.73 million iPods during the quarter, up 8% over the number sold the preceding quarter, and up 35% over the number sold during the year-ago quarter. Apple sold 1.61 million Macs during fiscal Q4 06, an all-time quarterly high and up 21% over the previous quarter’s Mac sales and 30% higher than the number of Macs sold during the year-ago quarter.
Sales are looking good for the upcoming quarter, the holiday shopping season, with Apple predicting it will generate $6 billion to $6.2 billion in revenue for its fiscal Q1 07.
The news was so good that investors and the press largely overlooked the fact that Apple has a little accounting problem on its hands. The company’s auditors found out that 15 stock option grants made between 1997 and 2002 had grant dates that preceded their approval. Apple warned that the auditors might find even more such problematic grants and that this quarter’s financial results, as well as the results for the relevant years, will have to be restated to take into account non-cash charges. Oh well….as long as things are zipping along on the sales front.
Posted by Cynthia Brumfield at 7:19 PM | Print | Comments (0)
Journalist Bill Moyers has completed a documentary on net neutrality, and it’s slated to air tonight on PBS at 9 pm. Entitled the “Net at Risk,” the show is clearly intended by Moyers to be a pro-net neutrality piece, although opponents, such as telco spokesman Mike McCurry, are featured in the program. (Click on the video for an excerpt.)
Moyers’ explanation about why he chose net neutrality as a topic in his new series of documentaries:
Giving control of content and access to big corporations will mean that the Internet, the most revolutionary democratic phenomenon of our time, where all of us are equal, will slip through our fingers. I did this documentary to say, Hey people, pay attention. Something is about to happen that will be very hard to change.
The fun doesn’t stop at the end of the show, however. PBS is hosting (on this site) a live Internet debate between Free Press Policy Director Ben Scott and phone industry spokesperson Mike McCurry after the show airs, starting at 10:30.
Posted by Cynthia Brumfield at 3:10 PM | Print | Comments (0)
I’m a little late to this one, but the record industry filed an astonishing 8,000 P2P lawsuits against alleged unauthorized file-sharers a couple of days ago. The International Federation of the Phonographic Industry filed the lawsuits in seventeen countries, bringing the total non-U.S. lawsuits lodged by the music business to 13,000, on top of the 18,000 already filed in the U.S.
The suits were the first of their kind in Brazil, Mexico and Poland. As evidence that these infringement lawsuits are turning into a new revenue stream for the record companies, IFPI data show that 2,300 people outside the U.S. have settled the suits rather than hassle with the painful legal process, resulting in an average payment of $3,028 per person. That’s a total of $6,964,400 in easy money for the record business.
Posted by Cynthia Brumfield at 9:58 AM | Print | Comments (0)It finally happened — a major entertainment company filed suit yesterday against two video sharing sites. Universal Music, which once had threatened to sue YouTube but instead cut a deal with the top-ranked video sharing site, filed a complaint against Grouper and Bolt.com, accusing the sites of allowing users to swap copyrighted songs illegally.
The suits were filed at the U.S. District Court, Central District of California, Western Division and accuse the two sites of mass infringement, seeking $150,000 for each case of infringement, plus attorneys fees and litigation costs.
Universal’s choice of targets is interesting. Grouper is now owned by Sony Corp., one of Universal’s big rivals in the music business. Bolt, on the other hand, is a small start-up that nonetheless boasts of 15 million users and an impressive list of advertisers.
On the site today, Bolt VP Jay Gould has posted the following message.
Hey everyone!
We have been notified today that Universal Music has filed a lawsuit against Bolt because our members upload videos which may contain their musicians’ copyrighted videos.
We understand the love you have for your favorite musical artists, but Bolt respects the rights of copyright owners such as Universal Music and their artists, and we ask that you please do so as well by not uploading their videos to Bolt.
You can still watch your favorite music videos by visiting your favorite bands websites. Bear with us - we hope to sort this out soon!
Although I haven’t seen the suits, clearly Universal plans to test the validity of the “take-down” provisions in the Digital Millenium Copyright Act (DMCA), which spell out procedures that copyright owners can follow to request that an online service provider take down copyrighted material. Grouper, Bolt, YouTube and other video sharing sites have been relying on this take-down provision to protect their activities, noting that they comply with legitimate take-down requests when submitted. In its terms of use, Bolt, like virtually all other video sharing sites, spells out its commitment to complying with the DMCA.
Fasten your seat belts — the legitimacy of the video sharing business and the sustainability of the DMCA’s take-down provisions are about to be intensely scrutinized in the legal arena.
Posted by Cynthia Brumfield at 9:05 AM | Print | Comments (0)
As the New York Times’ David Barboza reports today, Viacom’s MTV Networks announced yesterday a deal with China’s top search engine Baidu.com to supply the “Google of China” with 15,000 hours of entertainment content from MTV and Nickleodeon.
The deal marks a first for a major U.S. entertainment company in China — Baidu will offer a branded area on its service called MTV Zone, sponsored by Motorola and P&G. The section will feature free or premium content along four categories:
—MTV China’s locally produced shows such as MTV Music Wire, Tian Lai Cun, MTV Chart Countdown, MTV English, MTV Mega Star and MTV China’s live music events.
—MTV hit reality shows including Pimp My Ride, Cribs and Laguna Beach.
—Nickelodeon’s hit shows, including animations SpongeBob SquarePants and Dora the Explorer, as well as live action series Unfabulous and Drake & Josh.
—Music videos from four Chinese labels, as well as one Asian label.
Is it funny or sad that the first American entertainment programs that millions of Chinese will see are “Pimp My Ride” and “SpongeBob SquarePants?” The latter program, however, has been running for a few months on state-controlled China Central Television. And MTV Networks has signed agreements with four mainland Chinese record companies to distribute via the new service music videos that feature Chinese musicians and bands. Music videos from a fifth music company, Avex, which represents various pan-Asian groups, will also appear on the Baidu service.
The deal follows on MTV Networks pact to offer clips, music and ringtones to China Mobile and China Unicom.
Posted by Cynthia Brumfield at 7:59 AM | Print | Comments (0)
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