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