Apple posts quarterly revenues of $46 billion. Record iPhone and IPad shipments

25 Jan

I am truly amazed by the results that Apple posted today. Here is a summary of unit shipments IPhone’s and IPad’s:

IPhone – 37.04 million units. A 117% increase over the previous quarter and 128% increase over the year ago quarter.

IPad – 15.43 million units. A 39% increase over the previous quarter and 111% increase over the year ago quarter.

Here is the revenue breakdown by product:

Mac Desktop:$1.94b

Mac Portables:$4.66b

iPod:$2.53b

iTunes:$2.03b

iPhone:$24.42b

iPad:$9.15b

Peripherals:$0.77b

Software, Service and other:$0.84b

It is noteworthy that 75% of Apple’s revenues come from the iPhone and the iPad. iPhone accounts for 53% of revenues and the iPad accounted for approx. 20% of revenues. The iPhone did not start shipping till June 2007 and the iPad started shipping in April 2010. Both these products account for 72% of revenues. I am not aware of any other company that is able to generate almost three-quarter’s of its revenue from products that did not exist five years ago.

Unless there is a major disruption, I can envision Apple hitting $200 billion in revenues in a couple of years. Many have opined which company would achieve a $1 trillion market capitalization. My bet is on Apple. My thesis on Apple is rather simple. In the next 3-5 years, the company will:

  • Achieve at least 10% market share in the mobile device (cell and smart phone) market. Currently, Apple’s share is about 5%.
  • Achieve 15%-20% market share in desktop and portable computing. Currently, the share is around 10%.
  • Maintain dominant share of over 75%  in tablets

It is truly impressive to note that a company that offers only five  product lines (MAC, iPhone, iPad, Ipod and Itunes) is able to generate over $46 billion in revenues. If the much rumored iTV is to be released do not be surprised if Apple’s revenues increase by another $1o-$15 billion in the first year of its launch.

To help you understand the magnitude of the revenue. The $46.3 billion in Apple’s December 2011 quarter is:

  • Higher than Google’s entire 2011 revenue of $37.9 billion
  • More than double than Microsoft’s December 2011 quarterly revenues of $20.89 billion
  • 20% more than GE’s December 2011 quarterly revenues of $37.97 billion

The formula for insanely great profits comes from insanely great products. I often wonder why other companies do not embrace Apple’s proven model of creating products that are elegant and simple.

Hat tip to the Apple team.

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