Apple's amazing earnings, and a "product transition"

In 30 hours, the company sold 270,000 iPhones. But wait till you see the numbers on the Mac!

Published July 26, 2007 11:11AM (EDT)

Apple released its quarterly numbers today, and as CEO Steve Jobs would say, "Boom!" Profits hit $818 million, 73 percent greater than those of the same quarter last year; the number surpassed both Apple's and analysts' forecasts.

The highlight was the Mac, which is a brand of computer that Apple makes in addition to music players and phones (Mac is a short name for Macintosh, inspired by a kind of Apple). Mac sales grew by a third over the year (more than two times the pace of the rest of the industry), and they made up 60 percent of the firm's revenue this quarter.

In a little-noticed move on June 29, Apple unveiled a device it calls the iPhone. The release came just 30 hours before the close of the financial quarter, and thus the company put out sales numbers today only for that brief period. Apple says it sold 270,000 iPhones in that time -- lower than some previous estimates, but higher (curiously) than the number of iPhone activations that AT&T reported on Tuesday.

If there was anything close to a low-light in Apple's report, it was the iPod. Though iPod sales grew -- Apple sold 9.8 million units in the quarter compared with 8.1 million last year -- revenues on those sales rose by just 5 percent. As the San Jose Mercury News points out, this is the second quarter in a row that iPod numbers have stagnated -- last quarter, sales actually came in below the same period of 2006.

There's an obvious reason for this: Apple hasn't refreshed the iPod line in some time, and it's likely that many people put off or delayed their purchase in anticipation of the iPhone or Apple's next iPod model. These people won't have to wait much longer, it seems.

Asked why the company isn't giving anything but vague guidance on its performance in the coming quarter, Peter Oppenheimer, Apple's chief financial officer, said that the uncertainty was caused by a "product transition I can't get into." Isn't that interesting?

By Salon Staff

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