Blog Post

iPhone 4 Free Bumpers Will Cost Apple $175 Million

Apple (NSDQ: AAPL) exceeded analysts’ expectations for its third fiscal quarter by posting quarterly net profit of $3.25 billion, on record revenue of $15.7 billion – 61 percent more than last year’s quarter.

Since this quarter ended just two days after iPhone 4 went on general sale but was iPad’s debut quarter, it’s likely largely an iPad quarter, although iPhone 4 pre-orders were being taken during the period.

CFO Peter Oppenheimer told investment analysts Apple sold $2.1 billion in iPads and $5 billion in iPhones, the latter up 74 percent from last year’s quarter.

Oppenheimer spoke about the bumper giveaway to soothe Antennagate: “We will be deferring revenue corresponding to the value of the cases that have yet to be ordered by or delivered to eligible customers under this offer as of the end of the September quarter.

We expect the cost to be $175 million and we expect the September quarter deferral to be recorded as revenue in the December quarter.”

This quarter ended on June 26, so is the first in which iPad was on sale but includes only two days of sales of iPhone 4, which was available from June 24. iPhone 4 pre-orders were being taken during the period, however.

Sales for the quarter…
— iPads: 3.27 million.
— iPhones: 8.4 million (+66 percent from last year) (specific models not detailed).
— Macs: 3.47 million (+33 percent from last year to a quarterly record).
— iPods: 9.41 percent (-8 percent from last year).

iTunes Store revenue exceeded $1 billion (+25 percent from last year)
— 225,000+ apps are available, including 11,000+ iPad-specific apps.
— People have now downloaded over five billion apps.

In the earnings announcement, Steve Jobs was on-message: