iPhone Life magazine

Apple reports record 2nd quarter earnings; CEO Tim Cook answers questions

It was another stellar quarter for Apple, which reported $39.2 billion in revenue, and $11.6 billion in profit. Despite the release of the new iPad, the iPhone led the way, with 35.1 million shipped. China was a big factor, accounting for $7.9 billion of Apple's revenue. Since Apple has only begun to tap the international market, investors feel like there's a lot of room for growth abroad — and for continued growth of Apple's stock price. After hitting $558 yesterday, this morning it's back up around $610.  You can read a good summary of Apple CEO Tim Cook's conference call with investors on iMore. And AppleInsider has posted notes from the conference call.

Cook gave some interesting factoids: Over 365 million iOS devices have now been sold. That includes 67 million iPads in two years. He said that it took Apple 24 years to sell that many Macs. The App Store now has over 600,000 apps, including over 200,000 specifically for the iPad.

He also answered questions, one of which was about the many patent lawsuits that Apple is involved in. Steve Jobs famously felt that Android was an iPhone ripoff and vowed to destroy Android. Cook again said that he'd rather settle than battle things out in court, so that's a clear switch in direction for Apple. But he also said that Apple not become "the inventor for the whole world." He said, "We just want people to invent their own stuff." So while he hates litigation, it's clear that he doesn't intend for Apple to just roll over and let other manufacturers continue to copy its products.

It would be interesting if Apple eventually ended up letting competitors emulate its products through licensing deals. The narrative back in the 1980s and 1990s was that the Mac failed to capture market share and the PC won because Apple failed to license its operating system, as Microsoft had done. There'd be a certain amount of irony if Apple were today to start licensing aspects of design. In any case, it'll be fun to see how this plays out: Apple as the tech leader and every other manufacturer trying to emulate Apple, and picking up the crumbs.

In answer to the question of whether Microsoft's Windows 8 will be strong competition for the iPad, Tim Cook felt that Microsoft is repeating a mistake it always makes: trying to be everything to everybody. Windows 8 will run on both tablets and PCs, and in its marketing Microsoft is emphasizing that Windows 8 tablets will be much more full-featured than the iPad, that there won't be any compromises. But Cook feels that's clearly the wrong approach, and likened converging the PC and tablet experiences to converging a refrigerator and toaster. Each device has its own purpose and function. In my mind, this has been a key to Apple's success. People like the iPad in part because it's easy and simple. They use an iPad because the want the iPad experience, not a PC. You can read a good discussion of this on iMore.

Apple sold 11.8 million iPads in the recent quarter, which is down a bit from the 15.4 million sold in the December quarter — but 150% increase over the same quarter a year earlier. Cook said that iPad supplies have been constrained, but that should be resolved by June.

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Jim Karpen's picture

Jim Karpen holds a Ph.D. in literature and writing, and has a love of gizmos. His doctoral dissertation focused on the revolutionary consequences of digital technologies and anticipated some of the developments taking place in the industry today. Jim has been writing about the Internet and technology since 1994 and has been using Apple's visionary products for decades.