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According to Strategy Analytics 3 million Windows-based tablets shipped in Q1. That is not inconsequential. It would add 4% to the total Windows-based computers and reduce the decline in Windows PC growth to -8% (from -11%). You can see the effect of those units on share in the following graphs.
The Apple Q1 financial performance review with a short look at the impact of warranties on gross margins. The growth question: why financial analysis cannot offer insights into new product creation, and why makers of things think different. Finally, a new installment into Asymcar: why the process of car making is over-integrated, over-serving, and over-concentrated.
5by5 | The Critical Path #82: Adding Rows.
iTunes (including software and services) revenues in Q1 topped $4 billion and were 30% higher than (re-stated) 2012 Q1 revenues. Accompanying this revenue figure were additional data points from the company:
- Cumulative app downloads have surpassed 45 billion
- Payments to developers reached a cumulative total of $9 billion
- Payments to developers were $4.5 billion in most recent four quarters
- Now paying $1 billion to developers every quarter
- 800 apps are downloaded every second
- iOS app revenues doubled since year-ago quarter
- App Store accounted for 74% of all app sales in the quarter (citing Canalys)
- App stores reach customers in 155 countries (850k Apps, 350k iPad apps)
- iTunes music downloads are available in 119 countries (35 million songs)
- Movies are sold in 109 countries (60k titles)
- iBookstore is available in 155 countries (1.75 million titles)
This data allows for a few inferences:
In the March quarter, our gross margin was 37.5%. It was at the low end of our range. We had a few items that on balance resulted in us reporting at the low end. They included mix, in particular, selling more iPads than we had planned, including getting iPad mini into our four- to six-week channel inventory range, some changes in our service policies that required us to make provisions for prior quarter sales, and we had some unfavorable adjustments.
- Peter Oppenheimer, Apple CFO, FQ2 2013 Earnings Conference Call
Thanks to Philip Elmer DeWitt for bringing this quote to my attention in the comments to Margin Call 2.
I was curious about the “changes in service policies” and what that might have meant, especially since they seem to have been retroactive (provisions for prior quarter sales).
The 10Q offers more details:
Accruals for product warranty for the three months ended March 30, 2013 include $414 million associated with product sales in prior fiscal periods reflecting the impact of changes to certain of the Company’s service policies and other estimated warranty costs. Of this amount, $224 million is associated with product sales in the first quarter of 2013, and the remainder is associated with product sales in 2012.
- Apple 10Q, Note 6, Page 17, second paragraph.