Yesterday, Apple held its quarterly conference call to discuss Q2 financial performance. Expectations were mixed heading into the call, with many saying that this would reveal the true effect of the recession on Apple’s business, and that we would finally see that the Cupertino company is not immune to the same challenges facing other consumer electronics and computer companies. Well, maybe the other shoe has yet to drop, but Apple’s performance yesterday exceeded analyst expectations
Analysts were expecting a slight drop in earnings for the second quarter, based on the performance of other, similarly positioned companies, and the economic climate in general. Instead, Apple had a record quarter yet again, with a net income of $1.2 billion, or $1.33 per share. Total revenue came in at an astounding $8.33 billion, compared to $7.51 billion during the same quarter last year. Last year’s income was only $1.05 billion, or $1.16 per share. The strong numbers gave Apple stocks a big boost in aftermarket trading.
If you break down the revenue numbers, you start to see the effect of the recession on sales. Specifically, Mac sales fell 3 percent over the same period last year, while iPod sales went up 3 percent and iPhone sales rose 123 percent. In other words, big ticket items are not as appealing to buyers, while cheaper consumer electronics are still performing well. It might indicate that a netbook would market well to cash-strapped consumers.
But Tim Cook is having none of it. The CFO took the call yesterday as an opportunity to reiterate and expand upon Jobs’ stance regarding netbook devices:
When I’m looking at what’s sold in the Netbook market, I see cramped keyboards, junky hardware, very small screens, bad software. Not a consumer experience that we would put the Mac brand on. As it exists today, we’re not interested in it nor would it be something customers would be interested in the long term. We are looking at the space. For those who want a small computer that does browsing/email, they might want an iPhone or iPod touch. If we find a way to deliver an innovative product that really makes a contribution, we’ll do that.
Cook taking the hard line and shooting down the netbook concept is only to be expected when the still-absent Jobs is already on the books as having done so, regardless of whether or not rumors since about such a device have spread like wildfire. Cook also briefly discussed the Pre, though his comments didn’t really say anything beyond those already made at past calls regarding the device. You can check out a recording of the conference call at Apple’s website, if you want to listen to the whole thing yourself.