October 2008

Apple reported strong sales for the fourth fiscal quarter of 2008, including sales of $7.9 billion and a record 2.6 million Macintosh computers. But company executives, including Steve Jobs in a first-ever conference call appearance, failed to say how many retail stores would open during fiscal 2009, and no analyst asked during a question-and-answer session. The new store figure, which has been in the 35 to 40 range in previous years, would have provided a measure of Apple’s forecast for the economy in 2009. The retail stores reported record sales of $1.72 billion for the quarter, up 37 percent from the same quarter of 2007, and a profit of $301 million. The retail stores sold a record 596,000 computers, over one-half to those who have never owned a Macintosh. The number of store visitors hit a new record of 42.7 million, beating the previous record of 38.4 million set in Q1 2008. During the conference call, CFO Peter Oppenheimer noted the change in iPhone buying procedures at Apple’s stores, which he said has reduced the purchase time to just one minute longer than buying an iPod. Otherwise, the retail stores were just briefly mentioned in passing during the conference call. Check the Charts & Graphs for full quarter-by-quarter results. read more…

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Apple’s quarterly financial conference calls are filled with numbers detailing every aspect of its operations. But none will be as significant as the number of retail stores Apple will open in fiscal 2009, as reported in next Tuesday’s call. The figure will not only signify Apple’s on-going commitment to reaching even more customers, but it will represent the company’s wager–big or small–on a world economy in turmoil. The figure is traditionally given by CFO Peter Oppenheimer during his review of the retail operation, and has been “35 to 40 stores” virtually each time. In fact, the number of grand openings has been on the conservative side of that forecast each year, ranging from 32 to 46 each fiscal year until 2008’s 50 store openings. IFO has identified 18 Apple store projects that will result in grand openings some time during 2008-2010, despite the current uncertainty. Tipsters have pointed to another 38 store projects that are in some stage of planning, and which could be either slowed down, cancelled or given the green light. read more…

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One out of every three dollars spent on computers in U.S. retail is for a Macintosh computer, according to COO Tim Cook, who outlined the “State of the Mac” during today’s briefing to introduce new laptops models. “What a difference a few years make,” he said. Apple’s share of the U.S. retail market is now at 17.5 percent, Cook told the audience, while the company’s revenue share is now 31.3 percent. He explained the latter figure by saying that Apple sells full-featured systems and, “We don’t compromise on quality.” Cook explained why the Mac market share is increasing substantially, despite low growth of computer sales in the industry itself– Apple offers better computers and software, provides compatibility, has gained from the un-success of Vista, and has great marketing. The last factor was Apple’s retail stores, saying they greet 400,000 visitors a day. “And most importantly,” he added, “still, 50 percent of the Macintoshes they sell are to people who are new to the Mac.” He showed photos the new George Street (Sydney) and Sanlitun (Beijing) stores that opened this summer, and said, “Both of these stores have gotten off to a great start.” Apple reports its full fourth-quarter financial results next Tuesday.

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