The bMighty Blog -- Apple

Thanks to iMacs and MacBooks, Apple churned out record profits in its second quarter of fiscal 2008. The quarter encompassed January-March, and resulted in revenue of $7.51 billion, and profit of $1.05 billion. But while sales are still strong, there are signs that momentum is slowing, particularly in its consumer electronics products.

According to Apple, the company shipped 2,289,000 Macs during those three months, representing 51% unit growth over January-March 2007 — but a 1% decline over its sales in the last three months of 2007.

There are several ways to interpret this. It's clear that this number marked a decline from the previous quarter. On the other hand, October-December 2007 includes the busy Christmas shopping season. So, you could interpret that Apple sold almost as many Macs after Christmas as before as showing strong demand in businesses. That's the analysis I favor here.

If you're wondering how this past quarter's sales broke out, it was:

856,000 desktops (including iMacs, minis, and Xserves), compared to 626,000 the year before (+37%).

1,433,000 portables (including MacBooks and MacBook Pros), compared to 891,000 the year before (+61%).

That's stunning growth in portables, which were even up 7% over the October-December 2007 sales of 1,342,000. That can be attributed, in part, to the new MacBook Air, but also to the incredible appeal of the latest MacBook and MacBook Pro models. Apple is hitting home runs with its notebooks.

On the the consumer-electronics side, Apple's results are disappointing. The company sold 10,644,000 iPods, compared to 10,549,000 in the same quarter of 2007 (+1%), and 22,121,000 during the end of 2007 (-52%). Given that the inexpensive iPod models are popular gift items, there's clearly a Christmas effect at play here. However, the small year-on-year growth may show that the latest models aren't appealing, or that there's beginning to be saturation. We'll have to keep an eye on that.

What about the iPhone? There's not enough data, of course, for year-on-year comparison, but the company sold 1,703,000 iPhones in January-March 2008, compared to 2,315,000 in October-December 2007 (-26%). That's clearly a Christmas effect.

Overall, it was a strong quarter for Apple, but thanks to its Macintosh computers, especially the portables — not its consumer electronics.

“We’re delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO, in a statement. “With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters.”

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