Apple Q4 2010 by the numbers: Record iPhone sales and iPad push revenue to $20.34 billion

[Editor's Note: This was a live document starting at 4:46 p.m. EDT through the end of Apple's earnings call at 6:46 p.m.]

Apple didn't disappoint Wall Street analysts obsessed by goings on at One Infinite Loop -- delivering, after the Bell closed today, record fiscal fourth quarter and year 2010 financial results. In the days and hours before earnings disclosure, numerous blogs and news sites (this one included) mused about the role of iPad, which soared above strong Mac sales. In just two quarters, iPad has opened up a new line of business generating nearly $5 billion in revenue. Meanwhile, iPhone shipments ascended past analyst consensus by about 2.5 million units.

For the quarter, Apple reported $20.34 billion revenue and net profits of $4.31 billion, or $4.64 a share. A year earlier, Apple reported revenue of $12.21 billion and $2.53 billion net quarterly profit, or $2.77 per share. Revenue rose 67 percent year over year.

Three months ago, Apple forecasted $18 billion revenue, with earnings per share of $3.44. Analyst average estimates were higher than Apple guidance: $18.65 billion revenue and $4.06 earnings per share.

Gross margins fell from 41.8 percent in fiscal Q4 2009 to 36.9 percent in the current quarter. Sales in international markets accounted for 57 percent of revenue.

Looking ahead, Apple forecasts $23 billion in revenue for fiscal 2011 first quarter, with earnings per share of $4.80. Projected gross margins: 36 percent.

During today's earnings conference, Apple CEO Steve Jobs made a surprise visit. "I couldn't help dropping by for our first $20 billion quarter," he said. "First, let me discuss iPhone. We sold 14.1 million iPhones during the quarter, which represents a 91 percent unit growth over the year-ago quarter and was well ahead of IDC's last published estimate of 64 percent growth for the global smartphone market in the September quarter. And it handily beat RIM's [Research in Motion] 12.1 million BlackBerries sold in their most recent quarter ending in August. We've now passed RIM, and I don't see them catching up with us in the foreseeable future."

iPhone. Apple shipped 14.1 million iPhones worldwide during fiscal fourth quarter. A year earlier, Apple shipped 7.37 million iPhones. Apple nearly doubled unit shipments and revenue. Apple shipments into the channel are usually several million units higher than numbers released by Gartner, which measures actual sales. Wall Street analyst average estimate was under 11.5 million units; my figure is less accurate than usual because some analysts raise estimates in the days before today's earnings announcement; I didn't have access to some of the revisions.

Q4 2010 Revenue by Product

  • Desktops: $1.7 billion, up 54 percent from $1.09 billion a year earlier.
  • Portables: $3.2 billion, up 10 percent from $2.89 billion a year earlier.
  • iPod: $1.48 billion, down 6 percent from $1.56 billion a year earlier.
  • Music: $1.24 billion, up 22 percent from $1.02 billion a year earlier.
  • iPhone: $8.82 billion, up 92 percent from $4.606 billion a year earlier.
  • iPad: $2.79 billion; no comparable -- new product.
  • Peripherals: $477 million, up 22 percent from $391 million a year earlier.
  • Software & Services: $646 million, up 2 percent from $649 million a year earlier.

Average selling price was $610 for iPhone, which was available from 166 carriers in 89 countries. To date, Apple has sold more than 125 million iOS devices, which includes iPad, iPhone and iPod touch. Apple claims 200,000 registered developers for the iOS App Store, where there are more than 300,000 applications. During the past 30 days, Apple activated an average 275,000 iOS devices per day.

iPad. The tablet's impact on Apple simply cannot be understated. The company shipped 4.19 million tablets during the quarter for a total of 7.458 million in just six months. As aforementioned, iPad generated nearly $5 billion in new revenue during the first six months of availability. Analyst estimates varied widely from about 2.5 million to 6 million units -- coming into today's earnings announcements, with numerous revisions made during just the past 7 days. During the quarter, iPad was available in 26 countries. Average selling price was about $645.

Q4 2010 Unit Shipments by Product

  • Desktops: 1.24 million units, up 58 percent from 787,000 units a year earlier.
  • Portables: 2.64 million units, up 17 percent from 2.27 million units a year earlier.
  • iPod: 9.05 million units, down 11 percent from 10.2 million units a year earlier.
  • iPhone: 14.1 million units, up 91 percent from 7.37 million units a year earlier.
  • iPad: 4.189 million units; no comparable -- new product.

"We're already shipping more of them than Macs, in just a few quarters." Jobs said about iPad during a conference call with analysts. But not more revenue. Macs generated $4.87 billion in revenue compared to $2.792 billion for iPad.

Last week I asked "Is Apple No. 1 and not No. 3 in U.S. PC shipments?" following up a similar question from August: "Is Apple the real U.S. PC market share leader -- or soon will be?" In both analyses I looked at the impact on Apple U.S. market share if Gartner or IDC counted iPad as computers. I'm fairly confident that I addressed this topic before my peers. Today, over at Fortune's Apple 2.0 blog, Philip Elmer-DeWitt asks "What if the iPad were a PC?" and cites Deutsche Bank report (issued today) that answers "Yes." Well, and where is the credit to Betanews for brainstorming this topic and crunching some numbers (Deutsche Bank analyst Chris Whitmore crunches even more to come with market share of 24 percent).

No matter how iPad is classified, the product is a huge success by the broader numbers -- shipments and generated revenue and income. It's a staggering achievement for a product category that in January I asserted the world doesn't need; in June I acknowledged being wrong about iPad. By most analysts' measures, iPad sucked away Windows PC sales -- netbooks and cheap laptops.

Q4 2010 Revenue by Geography

  • Americas: $7.19 billion, up 37 percent from $5.24 billion a year earlier.
  • Europe: $5.49 billion, up 69 percent from $3.24 billion a year earlier.
  • Japan: $1.4 billion, up 121 percent from $634 million a year earlier.
  • Asia Pacific: $2.73 billion, up 157 percent from $1.06 million a year earlier.
  • Retail: $3.57 billion, up 75 percent from $2.04 billion a year earlier.

Apple's CEO concurred. During today's conference call with analysts, Jobs said that "the iPad is clearly going to affect notebook computers." He emphasized "We've got a tiger by the tail here."

Computers. The iPhone and iPad may be success stories -- and iPad is one likely every major PC company on the planet hopes to imitate -- but by no means the only wowzers. Mac shipments soared during fourth quarter, buoyed in part by back-to-school shopping that also lifted iPad. Apple sold -- what company executives really mean by shipped -- 3.89 million Macs during the quarter, up from 3.05 million units a year earlier; growth was 27 percent year over year. Wall Street consensus ranged from about 3.7 million to 4.2 million units worldwide, with consensus under 4 million units. Apple shipped twice as many portables as desktops.

Last week, Gartner and IDC released preliminary third calendar quarter PC shipment data. In the United States, Apple shipped 1.999 million computers, for 24.1 percent year-over-year growth, according to IDC. However, Gartner put Apple shipments lower, at 1.849 million, with growth a much lower 13.7 percent. IDC ranked Apple No.3 in U.S. market share, while Gartner ranked the Mac maker fourth. U.S. market share was nearly identical from Gartner and IDC, 10.4 percent and 10.6 percent, respectively. Globally, Apple's PC market share was 4.5 percent during third calendar quarter, according to IDC.

Q4 2010 Unit Shipments by Geography

  • Americas: 1.46 million units, up 17 percent from 1.25 million units a year earlier.
  • Europe: 978,000 units, up 29 percent from 761,000 units a year earlier.
  • Japan: 118,000 units, up 49 percent from 79,000 units a year earlier.
  • Asia Pacific: 455,000 units, up 56 percent from 291,000 units a year earlier.
  • Retail: 874,000 units, up 30 percent from 670,000 units a year earlier.

"iPad has had some negative impact on the mininotebook market," Bob O'Donnell, IDC's vice president for Clients and Displays, said in a statement. Most analysts use the classification mininotebook to describe netbooks. O'Donnell also asserted an iPad "halo effect" that "helped propel Mac sales." The point: Apple's gangbuster Mac shipments wasn't just about back-to-school buyers; iPad is pulling new Mac sales, too.

iPod. Apple shipped 9.05 million iPods during fiscal third quarter, down from 11.8 million a year earlier. Analyst consensus for Q4 was around 9.5 million units. Apple's music player was the only category that didn't meet analyst expectations.

Retail. Revenue rose 75 percent year over year, with Apple retail stores selling 874,000 Macs, compared to 670,000 a year earlier, up 30 percent. Apple opened 24 new stores in the quarter, 16 outside the United States, for a total of 317 retail outlets worldwide -- 84 outside the United States. There was an average 301 stores open in the quarter, with average revenue of $11.8 million up from $7.8 million a year earlier. Apple retail stores had 74.5 million visitors during the quarter up 62 percent year over year. Apple plans to open 40-50 new stores during fiscal 2011, with more than half outside the United States.

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