In his first quarterly report since the passing of founder Steve Jobs, Apple CEO Tim Cook explained why revenues were down from last quarter and what the future holds for Apple.
By MARK GUARINO | Staff Writer Christian Science Monitor
posted October 18, 2011 at 7:54 pm EDT
A drop in iPhone sales pushed revenues for Apple down slightly during the past three months, with many customers presumably waiting to buy the new iPhone4S, which the company launched last Friday.
But CEO Tim Cook laid out his vision for where Apple is headed in his first conference call with reporters since the death of company founder Steve Jobs earlier this month.
First, he said Apple sees tablet market dominating future sales. It is “pretty clear” the digital tablet market “will be larger than the PC market,” as the former will start to cannibalize the latter, Mr. Cook said.
Moreover, Apple is counting on Asia in general – and China specifically – as key to its global growth. “The sky’s the limit there,” Cook said.
Despite the fourth-quarter sales numbers, Apple continues to break year-to-year sales records for many of its products, Cook said. Sales of its tablet, the iPad, spiked 166 percent this quarter compared with the same time period last year.
Speaking from company headquarters in Cupertino, Calif., Cook said company earnings reached $28.3 billion worldwide this past quarter ending Sept. 24, down 1 percent from the previous quarter. Despite the decline, the number bested the $20.3 billion in fourth-quarter earnings the company reported in 2010.
The only drop this past quarter came from iPhone sales. Sales of the iPhone fell 17 percent this quarter and unit sales fell 16 percent.
The iPhone remains Apple’s largest selling product, responsible for $11 billion in sales this past quarter alone. When the iPhone4S was released last weekend, 4 million were sold in the first three days.
Overall, the company’s greatest year-to-year sales gains were highest in Asia for the fourth quarter, jumping 61 percent to $6.5 billion.
Year-end revenue in China alone jumped 333 percent, from 3 billion in 2010 to 13 billion this year. The company opened its first store in Hong Kong and another Shanghai this past quarter, tallying six stores in China.
Cook credits a rising middle class seeking innovative personal technology as a reason why the company plans to invest further there.
In total, three-quarters of the 44 stores Apple expects to open in 2011 will be outside the US. Cook said the company is also planning to expand its presence in Brazil, Russia, and the Middle East.
In other news, South Korean tech manufacturer Samsung is currently suing Apple, accusing the company of violating its intellectual property. The lawsuit followed Apple’s lawsuit against Samsung, which alleges the company copied the product design, user interface, and packaging of the iPhone for Samsung’s Galaxy smartphone.
Cook said he would not comment on the lawsuit. He said Apple “spends a lot of time and money and resources with coming up with incredible innovations, and we don’t like it when someone else takes those.”
Cook took over the position of CEO in August following the departure of co-founder Steve Jobs. Mr. Jobs died Oct. 5.