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Apple Q3 call: 'tremendous' iPhone demand

updated 07:00 pm EDT, Tue July 21, 2009

iPhone production increase

During a conference call following Apple's third-quarter financial disclosures, several company executives shed more light on iPhone production, Mac sales and iPod shipments. The company is currently working to meet 'tremendous' demand for the iPhone 3GS, which so far has outpaced the initial production capabilities. Out of the 81 nations that the iPhone 3G has reached, the new 3GS has arrived at 18.

The executives declined to provide information regarding the difference in sales numbers between the iPhone 3G and 3GS, although they did acknowledge that cutting the price of the 3G down to $99 contributed to a significant increase in total unit sales.

The iPhone 3.0 firmware introduction also helped to lure business customers, including SME buyers and large corporations. A number of governmental agencies reportedly utilize more than 25,000 iPhones. The execs reminded listeners that the device achieved the highest rank in a J.D. Power survey comparing satisfaction among business users, while the new firmware offers several attractive features such as hardware encryption.

Overall iPod shipments were down by 7 percent and revenue slid by 11 percent, a trend that may continue into the near future. The company explained that the continuing falloff "was one of the original reasons we developed the iPhone and iPod touch." Tim Cook claims a "significant number" of Touch users upgraded to the latest firmware, although he declined to provide specifics.

Despite the economic recession, Apple's retail outlets showed a 12 percent jump in units and a 2 percent gain in revenue from the last quarter. The disparity is likely a result of customers' decisions to purchase less-expensive Macs. The company recently cut prices on its MacBook Pro series of notebooks, while announcing that the Mac OS X Snow Leopard upgrade will be available for just $29.

Overall shipments of desktops were down 10 percent compared to the same quarter in 2008. A recent report, however, predicts that iMacs may account for nearly half of the all-in-one sales across the globe for the entire year. Notebook sales showed particular strength in the recent quarter, with a 25 percent jump in units from Q2. Shortages of the 13-inch MacBook Pro will allegedly be addressed in the coming weeks.

Cook reiterated many of his earlier thoughts regarding netbooks, including the lack of quality and poor features among $400 to $500 price points, although he did not dismiss the possibility that Apple was considering an entry into the market. "Whatever price point that we can build the best at, we will play there."

Regarding a smaller device, the COO claims Apple does not want to "discount anything," but he couldn't talk about any specific plans. The executives believe many of the current netbooks are "very slow" and paired with old software technology. "They don't have a robust computing experience. They lack horsepower. They have small displays and cramped keyboards," said Cook.

by MacNN Staff




  1. Constable Odo

    Joined: Dec 1969


    I can only guess that

    a 1.6 GHz Atom processor would be somewhat taxed under even the lowest version of Windows 7. Netbooks should probably be running mobile OSs and mobile apps and hopefully that what the Apple tablet will be using.

    Stick a 1Ghz Arm processor with some custom graphics processor and capable of running all 65,000 apps and Apple will just clean up in their own netbook market. If the App Store is driving iPhone sales, I can only imagine what it would do to tablet sales. No other netbook could even come close to it's potential user value.

    I beg you, Apple, turn the netbook market into your very own playground.

  1. testudo

    Joined: Dec 1969



    That will only work if people's expectations for a tablet computer are basically a 'big ipod touch'. But most tablets now are meant to run custom apps and used in the 'real world' on the go, they're not going to be happy with the limited-ness of the iPhone OS.

    But I love the Apple's guy description of the netbook. It's slow. Small. Cramped keyboard.

    Um, that is why they are so cheap, and why so many are looking at them. Not everyone wants/needs a secondary computer that costs $1500 like the Air. When you're checking email and needing to do some non-intensive work, they are more than capable of doing that. Can they run Photoshop? No. But they aren't designed to run Photoshop.

    Apple doesn't work in the low-end. So why do people keep talking about netbooks with Apple, let alone keep telling people why they're so bad.

  1. Peter Bonte

    Joined: Dec 1969



    Apple doesn't do low-profit, iPod-Touch, iPhone and iMacs are pretty low-end in there segment. Nu use in entering a business with a zero profit margin.

    A 'big ipod touch' is exactly what we will have to expect, maybe standalone capability's with iTunes on the device but most probably not full osX. $499 seems a good price for such a product.

  1. MacnnGregor

    Joined: Dec 1969


    eBook Plus

    The tablet or netbook, I feel, should not just be a big iPod Touch or a custom app'ed slab of silicon. It should be an eBook with internet capabilities and the ability to run iPhone apps - perhaps iPhone Apps Plus - from the App Store.

    The point is that there is a space in the eBooks arena and plenty of apps that can read (later edit) Office and pdf files. With Safari, you have 95% of what most people need in a "netbook" without much of a increase in tech development.

    So stop talking about netbooks or tablets as defined by Microsoft!!!!! Apple should do something different - create products that really are computers, like the iPod Touch, but don't act like computers - with elegant functionality for a few things and with easy access to a marketplace of casual apps and games.

  1. testudo

    Joined: Dec 1969


    Re: ebook plus

    So stop talking about netbooks or tablets as defined by Microsoft!!!!!

    Netbooks ARE NOT tablets. They are two completley different products pushed to two different markets and two completely different price points (tablets tend to be more expensive then equivalent laptops, not less).

    The places I've seen tablets (doctors offices, on-site workers, etc) would not be helped at all by a netbook. But they also wouldn't be helped by an Apple controlled web and email device such as an iPod touch .

  1. testudo

    Joined: Dec 1969


    re: low-end

    Apple doesn't do low-profit, iPod-Touch, iPhone and iMacs are pretty low-end in there segment. Nu use in entering a business with a zero profit margin.

    The iMac is NOT pretty low-end in their segment. As a desktop computer, its actually pretty high-end. But you would expect that, since, as you say, Apple doesn't do low-end.

    The iPod and iPhone are more mid-range than low-end. They cost around what the current crop of like devices go for, perhaps slightly more (it is hard to say with the iPhone, as we don't know what the true non-subsidized price is).

  1. ff11

    Joined: Dec 1969


    Re: ebook plus

    "The places I've seen tablets (doctors offices, on-site workers, etc) would not be helped at all by a netbook. But they also wouldn't be helped by an Apple controlled web and email device such as an iPod touch"

    Actually, I don't see why they couldn't be helped by such a device. Essentially what you need in those cases is a data entry/viewing device. This role could be easily filled by an iPhone like device with an App to link it to a central server.

  1. climacs

    Joined: Dec 1969


    App Store

    I think Apple has discovered (or perhaps knew all along) that the App Store forms a powerful way to rope (willing) customers into both Apple hardware as well as software which can only be used on Apple devices. You can bet that any netbook-like device will NOT look anything like a PC netbook. You can also bet that this Apple netbook will be able to use apps from the App Store just like an iPhone or iPod Touch.

    We're now looking at a curious reversal of that old, tired trope that lots of PC software is not available for the Mac; soon it's going to be, "those Apps aren't available for the PC!"

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