Apple Q1 2012 by the numbers: $13B profit, 37M iPhones sold

Today, after the closing bell, Apple answered the question analysts have asked for weeks: How many iPhones sold during the holiday quarter? The answer: A colossal number -- 37.04 million.

Apple also shipped 5.2 million Macs and 15.43 million iPads during fiscal 2012 first quarter. Analyst consensus was around 5 million and 14 million, respectively, and 32.5 million iPhones. During today's earnings conference call, Apple CFO Peter Oppenheimer revealed 315 million cumulative iOS device sales. Apple's App Store has 550,000 applications -- 150,000 for iPad. Developers will have earned $4 billion cumulatively by the end of the month, he said.

For fiscal Q1, Apple reported $46.33 billion revenue and net profits of $13.06 billion, or $13.87 a share. A year earlier, the company reported revenue of $26.74 billion and $6 billion net quarterly profit, or $6.43 per share.

Three months ago, Apple forecast $37 billion in revenue for fiscal 2012 first quarter, with earnings per share of $9.30. Analyst average estimates were higher than Apple guidance: $38.85 billion revenue and $10.08 earnings per share.

"We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs", Tim Cook, Apple CEO, says. "Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline".

Gross margin was 44.7 percent up from 38.5 percent a year earlier. Fifty-eight percent of revenues came from international sales.

Looking ahead, Apple forecasts $32.5 billion in revenue for fiscal 2012 second quarter, with earnings per share of $8.50.

Q1 2012 Revenue by Product

• Desktops: $1.94 billion, up 12 percent from $1.73 billion a year earlier.
• Portables: $4.66 billion, up 26 percent from $3.7 billion a year earlier.
• iPod: $2.53 billion, down 26 percent from $3.43 billion a year earlier.
• Music: $2.03 billion, up 42 percent from $1.43 billion a year earlier.
• iPhone: $24.42 billion, up 133 percent from $10.5 billion a year earlier.
• iPad: $9.15 billion, up 99 percent from $4.6 billion a year earlier.
• Peripherals: $766 million, up 29 percent from $593 million a year earlier.
• Software & Services: $844 million, up 7 percent from $786 million a year earlier.

iPhone. Apple shipped 37.04 million iPhones worldwide during fiscal first quarter, up from 16.24 million iPhones a year earlier. That's a 128 percent increase, year over year. Wall Street analyst average estimate was about 32.5 million units. Apple counts shipments into the channel, typically making them several million units higher than numbers released by Gartner, which measures actual sales.

iPhone 4S is available in 90 countries. "Demand there is staggering" Cook said of sales to China, during today's conference call. Apple ended the quarter with about 6 million iPhones in inventory, which is below the targeted 4 to 6 weeks.

If US numbers are any indication, iPhone's quarter was exceptional. Android share, as measured in smartphone operating systems among new purchasers, plummeted from 61.6 percent in October to 46.9 percent in December, according to Nielsen. Meanwhile, iPhone rose from 25.1 percent share to 44.5 percent. By NPD's reckoning, in October to November, Android's US fell share from 60 percent to 47 percent, while iOS rose from 29 percent to 43 percent.

Earlier today, Verizon released fourth calendar quarter results, with startling data: iPhone accounted for about 55 percent of smartphone sales and outsold 4G LTE models by 2 to 1. None of Apple's handsets support LTE.

The strong quarter is more than about iPhone 4S, which launched in mid October. During November and December, 43 percent of recent purchasers chose iPhone 3GS or 4 -- that's US phone subscribers, according to Nielsen. Concurrent with iPhone 4S launch, Apple reduced its predecessor's price to $99 and 3Gs to free.

Q1 2012 Unit Shipments by Product

• Desktops: 1.5 million units, up 21 percent from 1.23 million units a year earlier.
• Portables: 3.72 million units, up 28 percent from 2.9 million units a year earlier.
• iPod: 15.4 million units, down 21 percent from 19.44 million units a year earlier.
• iPhone: 37.04 million units, up 128 percent from 16.24 million units a year earlier.
• iPad: 15.43 million units, up 111 percent from 7.33 million units a year earlier.

iPad. Apple shipped 15.43 million iPads globally during the quarter -- that's up from 7.33 million -- a 111 percent -- a year earlier. Sell-through to customers outpaced sell-in to the channel by about 200,000; Apple ended the quarter with 4 to 6 weeks of inventory. Through the end of the quarter, Apple has sold 55 million iPads.

Cook doesn't see lower-cost tablets, such as Amazon Kindle Fire, affecting iPad sales. He described iPad as a class unto itself and called 2011 "year of the iPad" despite predictions it would be year of the tablet. "People that want an iPad won't settle for a limited-function [tablet]".

The media tablet is one of the most successful new products ever. Apple is a major player in the two most disruptive technologies affecting PCs today -- media tablets and smartphones. "By 2015, mobile application development projects targeting smartphones and tablets will outnumber PC projects by 4 to 1", Hung LeHong, Gartner research vice president, says. "The PC is no longer king". Gartner predicts that media tablet sales will reach 900 million by 2016.

Consumers are no longer leading the push to iPad alone. According to an IDG Connect study released last week: "Fully 51 percent of IT and business decision-makers say they always use their iPad at work" -- and, of course, that's the number who actually own the tablet. Sixteen percent have replaced their laptop with an iPad and 54 percent supplement it. Remember, these numbers are for people responsible for corporate computing. As the wind shifts in their sails -- or should that be sales -- so does it eventually across the computing infrastructure. The data suggests that iPads are significantly starting to cannibalize PC sales -- and not just among consumers -- and it's consistent with recent global PC buying trends (see next section).

Q1 2012 Revenue by Geography

• Americas: $17.71 billion, up 92 percent from $9.22 billion a year earlier.
• Europe: $11.3 billion, up 55 percent from $7.23 billion a year earlier.
• Japan: $3.56 billion, down 148 percent from $1.43 billion a year earlier.
• Asia Pacific: $7.7 billion, up 54 percent from $4.99 million a year earlier.
• Retail: $6.12 billion, up 59 percent from $3.85 billion a year earlier.

Computers. Mac shipments soared during fiscal Q1 quarter. Apple sold -- what company executives really mean by shipped -- 5.2 million Macs during the quarter, up from 4.13 million units during fiscal Q1 2011; growth was 26 percent year over year. Wall Street consensus was about 4.2 million units worldwide. Mac sales to Asia rose 58 percent year over year. Apple ended to quarter with 2 to 3 weeks of inventory.

Two weeks ago, Gartner and IDC released calendar fourth quarter 2011 preliminary PC shipments. In the United States, fourth-quarter PC shipments fell for every vendor in the top five but Apple, according to Gartner. HP shipments plummeted by more than 26 percent, while Apple's grew by 20.7 percent. IDC put HP's decline at 25.3 percent and Apple's gain at 18 percent. The Mac maker solidified its No. 3 ranking, with market share rising to 11.6 percent from 9 percent year over year according to Gartner and to 10.92 percent from 8.63 percent by IDC's reckoning.

IDC described the quarter as the worst since 2001, but really should have applied that to Windows PCs, given robust Mac shipments. During the same quarter, Microsoft reported a 6 percent decline in Windows division revenues and stunning 11 percent fall in profits.

Gartner and IDC blamed some of the quarter's hardships to a short-term hard drive crisis, but that's only partial explanation. Consumers, in particular, bought other tech, with smartphones and tablets soaking dollars that might have been spent on PCs.

"There will come a time, in units, when the tablet market will be bigger than the PC market", Cook said during today's earnings call.

The Mac is big windfall benefactor of the PC shipment/sales crisis, because:

• Apple's brand is sizzling hot right now.
• Most people use Windows, which is old to them if upgrading, while the Mac is fresh.
• iPad cannibalize Windows PC sales, as businesses and consumers buy the tablet as upgrade companion or even replacement.
• Apple is more insulated from the hard drive shortage, in part because of how it sources components compared to most other computer makers.

During today's conference call, Cook said the hard drive shortage had no "material impact" on Mac sales and he doesn't expect any for fiscal second quarter. However, Apple does expect to pay more for drives.

Q1 2012 Unit Shipments by Geography

• Americas: 1.61 million units, up 19 percent from 1.36 million units a year earlier.
• Europe: 1.5 million units, up 19 percent from 1.25 million units a year earlier.
• Japan: 184,000 units, up 14 percent from 162,000 units a year earlier.
• Asia Pacific: 814,000 units, up 58 percent from 516,000 units a year earlier.
• Retail: 1.1 million units, up 30 percent from 851,000 units a year earlier.

iPod. Apple shipped 15.4 million iPods during fiscal first quarter, down from 19.4 million a year earlier -- a 21 percent decline. The quarter ended with 4 to 6 weeks of inventory.

iTunes Music Store generated $1.7 billion in revenue during the quarter.

Retail. Revenue from Apple Store rose 59 percent year over year to $6.12 billion. Unit Mac sales increased 30 percent -- to 1.1 million from 851,00 a year earlier. Apple opened four new stores during the quarter. With an average 358 stores open for the quarter average revenue was $17.1 million, up 43 percent year over year from $12 million. Number of visitors rose 45 percent from 76 million to 110 million.

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