Q: 37 million units of iPhones shipped. When do we run into the Law of Large Numbers? What are the growth opportunities coming up?
A: 37 million is a big number. It was a decent quarter. It was 37 million — more than we’d ever done before. We were pretty happy with that, but let me give you the way I look at the numbers. As I see it, that 37 million for last quarter represented 24% of the smartphone market. There’s 3 out of 4 people buying something else. 9 out of 10 phone buyers are buying something else.
Handset market is projected to go from 1.5 to 2 billion units. Take it in the context of these numbers, the truth is that this is a jaw-dropping industry with enormous opportunity. Up against those numbers, the numbers don’t seem so large anymore. What seems so large to me is the opportunity.
What we’re focusing on is the same thing we’ve always focused on. Making the world’s best products.
We think if we stay laser-focused on that, and continue to develop the ecosystem around the iPhone, that we have a pretty good opportunity to take advantage of this enormous market.
Q: The biggest opportunity is the emerging markets. Large portion of that is the prepaid market. Apple has done very well but the wholesale iPhone price point is nowhere near what we would expect in the prepaid market. How do you make it more affordable to those markets?
Last year we began offering revenue and operating income comparisons between Apple and Microsoft. It was becoming evident that the iOS franchise was beginning to overtake both in revenue and profitability the Windows franchise. To offer more dimensions of comparison this time I am adding Google’s top and bottom lines for comparison (click image for detail):
Note that the graphs have the same scales when read horizontally.
Apple’s valuation since October 2008 has been very highly correlated to its cash (R-squared of 0.91). This tight relationship to Apple’s value is shown in the chart below:
(The chart shows weekly, ending each Friday, share price (vertical axis) vs. interpolated weekly cash per share (horizontal axis) assuming linear growth between quarterly announcements. Share price data is current as of last Friday (Feb. 10) though cash per share is based on announcement date and hence delayed by about three weeks.)
I noted this relationship in May 2011 and followed up in September 2011. With current cash per share reaching
$95 to $100 $103.66 it seems that the share price should be around $500 any time now.
Apple’s retail stores increased sales by nearly 60% in Q4. This is a dramatic though not unprecedented change from Q3′s 1% growth rate. The growth rate faithfully tracks iPhone releases as demonstrated in a post last quarter.
When seen on a yearly basis some of the data begin to from a picture.
- There were 332 million visitors in 2011, an increase of 29%. (This total is greater than the population of the United States.)
- The average revenue was nearly $50 million/store
- 38 stores were opened, in-line with 2010′s 40 openings
- Total 2011 revenues were $16.4 billion
- About 34,600 (full time equivalent) employees were employed on average
- There were nearly 1 million visitors per store
- There were an average of 100 employees assigned to each store
- Average revenue/employee was $473,622
- Average profit/employee was $120,289
- There were about 9,600 visitors for each employee
- Each visitor generated about $50 in revenue
- The revenue per square foot was about $6,500 across all stores.
Some of these metrics are shown in the following charts relative to prior years:
kooaba Shortcut is a shortcut between real life and the Internet. If you are reading something in a paper publication and would like to share it or read more of it later on a device, simply take a picture of it and instantly get connected to the digital version.
The special sauce is in using image-recognition technology. Shortcut recognizes what you’re reading. Once recognized, it’s as good as having a link to it. You can share the digital version of the physical pages via Facebook, Twitter, SMS, and email, or store them in Evernote.
I think this sounds really impressive and it solves a real job to be done that only smartphones can solve.
It works with over 1,000 newspapers and magazines worldwide. (See kooaba: kooaba Shortcut) for a list of publications.)
Shortcut also works with ads and billboards. After taking a picture of an ad, you gain access to extras such as coupons, sweepstakes, or store locators.
With Shortcut you no longer need to type links into your phone, search for information, or cut out articles – Just take a picture instead.
Shortcut is available for iPhone, Android and Windows Phone 7.