Summary
Apple reported results of its 4th quarter today. This quarter is the best-ever quarter for Apple, with revenue of $26.7 billion driven by holiday iPad and iPhone sales. Apple’s net profit for this quarter is $6 billion, which also set a new record. In this last quarter, Apple sold 7.3 million iPads and sold a record of 16.2 million iPhones, surpassing the expectation of most analysts. In addition to this, the success of iPads and iPhones has also encouraged the sales of other Apple products, such as Mac and iPods. It is believed by the Apple Chief Operating Officer Tim Cook that iPad was cannibalizing other Apple products’ sales, especially Mac sales. In addition to that, the CEO of Apple, Steve Jobs has once again stepped down from his job and Cook will again handle all day-to-day operations.
Connection
The connection to chapter three is the income from operation, which is revenue and gross profit or gross margin. Gross profit is calculated by using sales revenue minus the cost of goods sold (an expense that records the cost of the units of inventory sold during the period). Because Apple’s major source of revenues is selling goods, it must make enough profit from sales of its goods to cover all the other expenses in order to operate the company. By calculating and examining the gross margin percentage (gross margin divided by sales), we can evaluate the company’s performance over time. To do this, we simply have to look whether the percentage has been increasing or not; plus we can also compare this percentage with other companies in the same industry.
Reflection
With a strong sale in quarter four, I believe that the sale for the current quarter is likely to fall. The success of this quarter is driven by holiday iPad and iPhone sales. Because of this, many people have used up their credits over the holiday; thus it is likely that sales of most Apple products will go down. The company itself has also noted that iPad sale will fall back in the current quarter because the tablet proved to be a hot holiday purchase only. Despite these facts, CEO Steve Jobs still believed that iPhone sales will be strong with exciting new features such as iPhone 4 on Verizon.
