|
|
JULY 2008 W4 ALERT Apple's Ap Store Growing Pains: Is Apple Rotten to the Core? Also, Company Releases Q3 Results, Chooses Not To Participate in Business Slowdown<techcrunch><July 23, 2008>Tech Crunch is reporting today that Apple’s Ap Store, launched only two weeks ago, has been a huge success with literally millions of downloads executed and at least 909 applications already available either for free or for a small fee.
In fact, it has been such a success that Apple has apparently been unable to keep up with submissions by developers, each of which must be approved by Apple before it can be included in the Ap Store.
Adding insult to injury, ap developers say they are in a “catch-22” as they can not really beta test their products until they can get them loaded on several iPhones, and they can’t achieve that until the ap is up and available for sale in the Ap Store. With no beta testing, customers risk getting buggy products which the company tries to fix with follow-up updates.
Aha…but Apple has now worked out a routine that will allow developers to distribute product for beta testing through the Ap Store for up to 100 users. Users will have to provide developers their serial number and the developer will notify the Ap Store of that users eligibility.
While still not completely clear, it appears that developers who have not had apps approved will still be able to beta test the programs so that once it is approved, everything will be ready for them to distribute a properly tested version.
Apple also released their third quarter and nine month results for the period ending June 28, 2008 showing strong growth in all categories with sales increased 38% in the quarter ($5.4 billion to $7.5 billion) and for the nine month periods ($17.8 billion to $24.6 billion). Operating income rose 34% for the quarter from $1.041 billion to $1.392 billion. Each share earned $1.19 which was 29.3% over last year’s 92 cents per share.
Sales by region showed strong growth overall with growth in the Americas at 28% for the quarter ($2.7 billion to $3.4 billion). Surprisingly, their retail division grew a significant 58% from $915 million to $1.445 billion.
In sales by product category, the company’s shining stars were “Software, service, and other sales” which showed 54% growth in the nine months to June 28, 2007…and Macintosh sales which grew 48% in the nine month period from $7.211 billion to $10.656 billion.
The company has shipped over 11 million iPods in the quarter and almost 44 million iPods in the nine month period. iPods contributed about $1.7 billion to the quarter and $7.5 billion in nine months. The average selling price of the iPod decreased 5 percent in the quarter due to a Shuffle closeout. However, the average selling price for the year increased 6 percent largely as the result of high demand for the new iPod touch model.
The company also shipped 717,000 iPhones in the quarter and 4.7 million iPhones in the first nine months of the year. This represented revenues of $419 million for the quarter and $1 billion for the first nine months.
iTunes downloads are still growing and the company reported sales of $819 million for the quarter and $2.5 billion for the first nine months from iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.
Perhaps the only sobering news was the company reported a declilne in gross margins from 36.9% of sales in the quarter in 2007 to 34.8% this year. The company attributed this decline to “pricing actions, more richly configured products, and higher manufacturing and support costs.”
Apple expects this gross margin decline to continue, perhaps dropping to as low as 30.0% by the end of 2009. They are projecting product transition issues, continued pricing issues including aggressively pricing new and innovative products that have higher costs and providing for component cost increases. (Photo credit: Apple) |
|
|