Apple Reports Third Quarter Results
Best Non-Holiday Quarter Revenue and Earnings in Apple History — Apple® today announced financial results for its fiscal 2009 third quarter ended June 27, 2009. The Company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share.
Context & Ripple Effects
Apple’s fiscal third-quarter report follows its April fiscal second-quarter update, but the $8.34 billion result is notable because it sets a company record outside the holiday period. Coverage of the same release emphasized that Apple sold twice as many iPhones as Macs and could not meet demand for new iPhones.
The result lands as handset profits are concentrating: Deutsche Bank estimated Apple generated roughly 20% of cellphone-industry operating profit, while Apple and Research In Motion together accounted for about 35%.
First-order effects
- Apple’s immediate constraint is turning iPhone demand into shipments: unmet availability limits the revenue it can capture even as the product outsells Macs.
- Buyers seeking new iPhones face constrained supply, while Apple’s quarterly mix shifts further toward the handset business.
Second-order effects
- Apple’s suppliers and manufacturing partners become more consequential to quarterly performance because production capacity, rather than demand generation, is the near-term bottleneck.
- Other cellphone makers face greater pressure to defend margins as Apple and Research In Motion capture an outsized share of industry operating profit.
Third-order effects
- If iPhone demand continues to outpace supply, handset competition will increasingly be determined by the ability to combine differentiated devices with dependable high-volume production.
- The profit split points toward a cellphone market in which a small group of smartphone vendors captures disproportionate economics, rather than returns being distributed evenly across device makers.
The trend: Mobile handsets are becoming the central profit engine for leading device makers, with supply execution increasingly shaping who converts demand into earnings.