July 19, 2006 2:04 PM PDT

Mac sales up 12 percent as Apple profits soar

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Apple hoping Mac attack lifts quarterly earnings

July 19, 2006
Apple Computer's third-quarter revenue fell a little short of expectations, but profitability was far higher than expected and Mac sales increased at a healthy clip.

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The Mac is back Chief Financial Officer Peter Oppenheimer credits strong Mac sales with Apple's soaring profits and improved sales.

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Apple for the teacher Educational customers were a key part of Apple's performance in the quarter, says Chief Operating Officer Tim Cook.

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Revenue was $4.37 billion, up 24 percent from last year's quarterly revenue of $3.52 billion. Net income was $472 million, or 54 cents per share, an improvement of 48 percent compared with last year's results of $320 million in net income and 37 cents per share. Analysts surveyed by Thomson First Call had been expecting Apple to report $4.4 billion in revenue and earn 44 cents per share.

Analysts had been worried that Apple's iPod growth had trailed off a bit in the middle of a long stretch without a significant redesign or a new feature added to the product. Apple sold 8.1 million iPods during the quarter, and Piper Jaffray analyst Gene Munster said in a research report earlier Wednesday that anything over 8 million would be a "slight positive."

Mac sales were up 12 percent compared with last year, during what was considered a poor quarter for the PC market. Apple said 75 percent of all Macs sold during the period used Intel's chips.

The outlook for the next period will probably disappoint some investors. The company predicted fourth-quarter revenue would be about $4.5 billion to $4.6 billion, less than the $4.9 billion analysts had been expecting. Apple executives will hold a conference call later Wednesday to discuss results.

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54 comments

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Great, glad to hear it
Don't own any stock and I don't even work there, but I love what Mac has done to their computers and the OS. I bought a G5 Power Mac for my self, and laptop for my wife and also two iPods.

And we are very happy with our products, enough so to put a big smiling face on the money spent.

I never felt so Rosy with PC OS, Windows. The PC hardware it self there is nothing wrong with it, I run several Linuxes on it, Damn Windows, it's a waste of freaking time.

I don't care what MS does or is promissing, enough wasted time with that crap.
Posted by rmiecznik (224 comments )
Reply Link Flag
Xbox
I like the Xbox, that is the only product that I liked, and older Office 2003, not the Beta crap that I seen.

I own the old Xbox and the new Xbox 360, and I like them both. But MS OS is total crap! I know people who work at MS and with all the internal stuff and firewall and virus scanner, employee re-load and re-install it all the time, people curse at it.

Don't think that I am some ignorant dude, I know MS.
Posted by rmiecznik (224 comments )
Reply Link Flag
don't sweat it...
The XBox IS a good product...just like the iPod. I wasn't dissing it
or Microsofts 'success' w/ it.

My post would've made more sense if someone hadn't deleted the
post above...
Posted by shanewalker (57 comments )
Link Flag
Windows - Never Reinstalled / Never A Virus
>I know people who work at MS and with all the internal stuff and firewall and virus scanner, employee re-load and re-install it all the time, people curse at it.<

What a bunch of fiction. I purchased my current Windows computer in 2002. How many times have I had to reinstall Windows? NONE.

I have been using Intel machines since the pre-Windows days of DOS. How many successful virus/worm attacks have there been against these computers? NONE.

My current (2002) computer is an HP, and both the hardware and operating system have been problem free.

(I use Norton Personal Firewall, Norton Antivirus, and Spy Sweeper.)
Posted by john55440 (1020 comments )
Link Flag
Xbox expert-not
Ur talking apples and oranges dude.
Posted by godseyesore (28 comments )
Link Flag
Nice performance
The introduction of the MacBook during the quarter really
helped to drive Macintosh sales, especially portables. The
underperforming desktop sales can be attributed to those G5
PowerMacs! I'll take the position that there will be a dramatic
increase in Macintosh desktop sales after Apple announces the
Intel based PowerMac replacement.

Furthermore, we should see great unit sale numbers during the
current quarter as education purchases are still kicking in and
we should see a stron 2006 holiday shopping season for Macs.
Posted by bobbymd (6 comments )
Reply Link Flag
Educational sales will be up!!
FINALLY, for the first time in forever, Apple came out with a 'new'(?) model for the educational market BEFORE the fall semester...

They usually wait until late August to do so and by then the schools have bought their 'old' crap...

I expect that their 3rd quarter sales figures will be MUCH better than they usually are!
Posted by AlanMck (2 comments )
Link Flag
Yep, I agree
The G5 using the IBM Power Processor is a good computer, I bought it, even tho I understand that new ones will come out to replace it, using Universal Binaries, it don't matter anyways.

I wish Apple stuck with IBM, because IBM is a good company with a lot of knowledge, not to say that Intel isn't, but I just think IBM is better, even Sun is better then Intel, the problem is that those processors are too specilized and not made for the mass market. But it is all cool, I like Apple regardless, now that they have a serious OS, before I wasn't so sure, but now I am.

Rock solid UNIX all the way baby!!!!
Posted by rmiecznik (224 comments )
Link Flag
You stole the CEO's speech notes, didn't you?
I can visualize the CEO saying the same thing at a press conference.

All in all, it looks like the move away from the PowerPC chips has been a good one. As far as the near future, having the PC's available before christmas and vista not shipping till after christmas can work to apple's favor.
Posted by Seaspray0 (9714 comments )
Link Flag
Why?
Why is it that, whenever there's an article about Apple (and I know
it must happen with other companies too), the majority of the
comments are either bashing or evangelizing Apple?

Can't we talk about the story folks?!?!
Posted by galendw (5 comments )
Reply Link Flag
Nice...
Good to see that they're growing well. Meanwhile, Linux keeps growing faster than Windows products, so if the percentages hold for long enough, MSFT will finally be forced to actually do some of that innovation they keep talking about :)
Posted by Penguinisto (5042 comments )
Reply Link Flag
The old debate
Let's not start this old debate again. I've worked on both macs and pcs and I've met all kinds of users and for every user that loves his pc, you'll find someone that hates it. You'll also find the same on the mac side.

In the end, the hate of either mac or pc is due to a malfunctioning machine.

When I fix either a mac or a pc, the users fall back in love with their machines again, so IMHO, if you want to be happy with your choice, keep your machine running well.

On the pc side, use a firewall, an antivirus program and scan for adware/malware daily. On the mac side, backup your data at least once a week.
Posted by thedreaming (573 comments )
Reply Link Flag
Good for Apple.
Good to see things pick up. Now release the Mac Pro and turn those profits up even more. That's the last
<a class="jive-link-external" href="http://www.techknowcafe.com/content/view/603/43/" target="_newWindow">http://www.techknowcafe.com/content/view/603/43/</a>
piece of the puzzle.
Posted by (156 comments )
Reply Link Flag
Apple should do this now....
Apple needs to release OS X for any x86 compatible PC like right now... They could ask more money for the PC version, since they wouldn't be selling their PC, but think of the profits they could potentially make, we are talking about billions of more in Sales.

There is millions of people fed up with not the PC, but Windows, that's what they need to do.

Mac OS X 10.4.6
(Single User)
$129.00

Family Pack
(5 license)
$199.00

PC

Mac OS X for PC 10.4.6
(Single User)
$250.00

Family Pack
(5 license)
$399.00

Any questions ?
Posted by rmiecznik (224 comments )
Link Flag
Guys mac sales went up 12% from last year. No big deal
Article reads

Mac sales were up 12 percent compared with last year, during what was considered a poor quarter for the PC market!!!!

Most people who held buying mac bought macs after Apple released the machines with intel chips ("Apple said 75 percent of all Macs sold during the period used Intel's chips") and this has led to 12% growth!!!

12% growth from last year (when sales were down compared to 2004) is not same as 12% market share!!!

12% mac growth is tiny compared to the pc growth in 2006.

I agree with most that OSX is a better operating system than windows but the numbers are nothing to cheer about in absolute terms. Mac market share has not improved or probably marginally improved.
Posted by Tanjore (322 comments )
Reply Link Flag
You must not push that pc too hard
I typically have at least 30 process intensive apps running
(MatLab, Office stuff, plannning software, etc.) on my mac. I have
yet to see a Windows machine run 12 heavy process apps
simultaneously without having problems.

Let me know how your efficiency of use on the machine goes.

By the way, the one thing that really is nice (its freeware) on the
mac is Quicksilver (3-4 keystrokes to get to any app or data file
on my mac). That is efficient.
Posted by curtegg (38 comments )
Reply Link Flag
growth is no big deal
The growth in mac pc sales is 12% compared to what it was last year. Article says that 75% of the machines sold had intel chip =&gt; people who held off buying macs because of change in hardware architecture finally bought the macs with intel.

12% growth over last year is not 12% gain in market share. Overall mac market share gain is probably less than 1%.

"According to Gartner, in the second quarter of 2006, Apple sold 766,000 Macs compared to 663,000 in the year-ago period. The companys market share is now 4.6 percent for the second quarter of 2006 as compared to 4.3 for the second quarter of 2005."

"Again accordng to Gartner
worldwide computer shipments totaled 54.9 million units in the second quarter of 2006, an 11 percent increase from the same period last year, according to preliminary results by the Gartner." - This includes macs.

What mac ships in a year, dell or hp ship the same number in a week or less.

Keeping these numbers aside - I believe mac osx is a decent operating system compared to windows xp sp2.
Posted by Tanjore (322 comments )
Reply Link Flag
actually, it is a big deal
Each 1 percent of market share means over a billion dollars in
sales. Since Apple gets higher margins than Dell or HP, it does
very well despite its small market share. Apple is financially very
healthy (with $9.5 billion in the bank and steady profits). Only
Dell and Apple have consistently made money in recent years.

So Dell and HP get huge marketshare, much of it due to large
corporate sales programs. They make money through volume.
Great for them. Apple succeeds with a different strategy.

From some, one gets the impression that unless Apple gets over
50% of the market it "loses." I would like Apple to get a nice
chunk of the market, say 10%, which is not unreasonable, in
order to make sure that software development for the Mac is
nice and profitable and so web site designers have greater
incentive to be *standards* compliant and not *IE* compliant.

Beyond that level, however, I don't see much advantage in
market share growth. Windows' huge installed base in the
corporate world seems increasingly like an anchor that prevents
rapid innovation. Malware will always focus more on the bigger
targets. No, a very financially strong Apple with steady, but
small, marketshare is not a bad thing at all.
Posted by Thrudheim (306 comments )
Link Flag
actually, it is a big deal
Second try at posting this; get with the program C|NET.

Each 1 percent of market share means over a billion dollars in
sales. Since Apple gets higher margins than Dell or HP, it does
very well despite its small market share. Apple is financially very
healthy (with $9.5 billion in the bank and steady profits). Only
Dell and Apple have consistently made money in recent years.

So Dell and HP get huge marketshare, much of it due to large
corporate sales programs. They make money through volume.
Great for them. Apple succeeds with a different strategy.

From some, one gets the impression that unless Apple gets over
50% of the market it "loses." I would like Apple to get a nice
chunk of the market, say 10%, which is not unreasonable, in
order to make sure that software development for the Mac is
nice and profitable and so web site designers have greater
incentive to be *standards* compliant and not *IE* compliant.

Beyond that level, however, I don't see much advantage in
market share growth. Windows' huge installed base in the
corporate world seems increasingly like an anchor that prevents
rapid innovation. Malware will always focus more on the bigger
targets. No, a very financially strong Apple with steady, but
small, marketshare is not a bad thing at all.
Posted by Thrudheim (306 comments )
Link Flag
but... but... but....
Just because you are stating the facts isn't important. Oh, no! We must argue and call each other names... it's our God given right! Would you go to a flea market and not haggle over the price? Of course YOU would because of your silly common sense and truthfulness.

I will add one perspective to the mix... When you go to 4.6% market share from 4.3%, it is less than 1% total market share, but represents a 12% increase in sales for Apple. While Dell/HP/Gateway can fluctuate over 1% total market share over the year, this does represent a marked increase for apple.

Is this increase due to people not buying a new apple until they got the intel chips? My guess is that a large % of that growth is for this reason and I'm projecting that apple will not see growth at this rate once those who waited aquire macs with intel chips. The question for me is "how long will the honeymoon last?"
Posted by Seaspray0 (9714 comments )
Link Flag
Yes.
You make a good point to explain the surge in Mac sales this
past quarter. There were probably a lot of people waiting for the
Intel macs. But you have to remember that people are also
waiting for Leopard, the new iPods, etc. When those are
released, they'll be waiting for ... I don't know ... the new iPhone
or something. The fact is, there's always going to be something
that's JUST NEW! and something that's COMING SOON!

People will wait ... and then they'll rush out. But the trend lately
seems to be upward from one big thing to the next with Apple. I
mean after this particular "honeymoon" is over ... the 12%
portables will likely settle out higher than what it would have
been if we were still on G5's.
Posted by tbarkhou (22 comments )
Link Flag
Question
Can you upgrade a Mac? I've been a PC user for a long time, but recently the school system I work for as a computer tech) received some iMacs free and I've been hearing the tired old PC vs. Mac thing for a while now.

To me its not really fair to bash one over the other. Granted Mac's probably are more stable...they don't have the virus problems...and they tend to look "cooler" (though I wish they would go back to having the different colors like they did a few years ago...blue is my favorite color).

But...to be fair Microsoft doesn't build any computers. If they actually built a computer I'm 100% sure it would be more stable than they are now. Would they be 100% stable...no...but then again neither are Macs (we've had our Mac lab now for a little over a month...with no kids using them over the summer and we've had to reimage 2 of them already).

Look at all the video, sound, network, usb, tv tuner, and all that jazz cards out there that Windows has to support. If I want to upgrade my PC to a newer video card I just buy one and pop it in. Have I had problems in the past...yep. Not all of its Microsoft fault...it was more crappy vendors not fully testing their drivers. Yeah...Microsoft could really do more to lock system files from being messed with and hopefully Vista will be more stable.

Also, I don't think its fair when Microsoft gets hammered by including their software with Windows. I remember the uproar over Media Player and Internet Explorer being a part of the OS. Can you uninstall items like that on a Mac? Seems Windows would be more stable if they could do things their own way...but people and governments cry foul when Microsoft does this...but from what I've seen no one says a word about Apple.

Like I said...I've been a PC user my whole life. Just now getting to use Mac's...so far I can say Mac's are pretty cool...but for now I'll stick with my PC.

In a few years...I may have to switch...to Linux :)
Posted by Da Phantom (1 comment )
Reply Link Flag
yes
HDD's, Graphic Cards, Wireless, RAM, Optical Drives, etc are all upgradeable. That's why I ahven't bought a computer since 2002. BEcause my PowerMac G4 has been pretty much maxed out at this point. Though when the intel powermacs arrive... I'll probably need to get one.
Posted by (461 comments )
Link Flag
Depends -
At a base level:

The older G4's you could update wildly, going from a G4 500MHz proc up to the latest G4's, sitting at around 2GHz (or so?).

G5 PowerMacs you're kind of restricted on; CPU's are pretty much tied to the mobo, there's limited room for HDD upgrades (you get two slots), and internally the design could've been better for expandability.

At the card level:
No problem on anything that isn't a Mac Mini or an iMac.

Laptops are of course the same everywhere.

For software, no problem - you don;t want it, you delete it from the Applications folder and 90% of the time that's all there is to it. Some apps have .plist (preferences and configuration) files stashed somewhere, but those are fairly simple to find and remove.
Posted by Penguinisto (5042 comments )
Link Flag
the best site
for people who like to tinker with the inside of Macs is this one:

<a class="jive-link-external" href="http://www.xlr8yourmac.com/index.html" target="_newWindow">http://www.xlr8yourmac.com/index.html</a>

All kinds of reviews/experiences with various CPU upgrades,
video cards, drives, etc.

Some Macs, of course, are more accessible than others. The G5
towers, for instance, are easily upgradable. Lots of memory
slots, simple plug in for additional hard drive, etc. The new
MacBooks allow easy access to the hard drive for upgrading that
(no need to open the case, pretty cool for a laptop).

I kept my old Mac G3 desktop alive for nearly eight years
through various upgrades (memory, PCI card to give it USB
ports, PCI card for wireless networking). I never bothered to
upgrade the processor, video card, or hard drive, though plenty
of options for doing that existed.

On the other hand, the Mac mini and Intel iMac are really not
made for the average Joe to open the box and mess around,
though people who like to tinker certainly do it. People, for
example, have pulled out the Core Solo processor from the mini
and plopped in the fastest Core Duo available. It works fine.

So the upgradability really depends on the particular machine.
Posted by Thrudheim (306 comments )
Link Flag
Yes, but...
&gt;&gt;Can you upgrade a Mac?&lt;&lt;

Yes, you can upgrade a Mac. That doesnt mean Apple has to like it. The less you tinker with their innards (and lets not kid ourselves, youre using their computer) the better in Apples eyes.

Apple has very tight guidelines for what can and cant be branded as Apple-compatible. As such, your depth of hardware selection is nowhere near the versatility offered to you by Win/*NIX boxes. You have some choices, but the combination of Apples control-freakish nature and the smaller market for their equipment has resulted in a mostly stagnant parts market for Apple machines.

That said, you probably dont have as many reasons to upgrade a Mac as you do a PC. Do you play games? Not on a Mac, you dont (in fairness, you could run Windows, but even then you dont have access to the best graphics cards). There goes your need to up your GPU every 18 months. Ive never heard of a Mac user upgrading their motherboard, so I cant make any claims to that effect. HDD and RAM are upgradeable, granted, but your choices on the latter are extremely limited. The depth doesnt come anywhere close to the other side of the fences selection, and you need not look any farther than your local MicroCenter, Frys, or even Newegg.com for proof of that.

&gt;&gt;Granted Mac's probably are more stable...they don't have the virus problems...and they tend to look "cooler"&lt;&lt;

I bluescreen Windows XP about as much as I bomb my friend's Mac, and neither of those happens very often.

As for viruses, the only virus I've ever had was on a Mac, though that was back in the System 7 days. All it takes is a little awareness of what goes on behind the scenes and you're invincible to 99.99% of all the viruses and spyware out there. The other 0.01% can be avoided entirely.

As for aesthetics, I have several cases that run circles around Apple's styling, but that's entirely subjective.

&gt;&gt;Seems Windows would be more stable if they could do things their own way...but people and governments cry foul when Microsoft does this...but from what I've seen no one says a word about Apple.&lt;&lt;

Ah, so true, so true. Double standards are only bad when they don't work in your favor.
Posted by Christopher Hall (1205 comments )
Link Flag
Comment system all messed up
There is something seriously wrong with the comment posting
system on this site. I can't say how many times that I get some
error message when trying to post, and lots of other people
apparently do as well. Sometimes the posts go through anyway
(but confusing the person trying to post, who then posts again).
Sometimes they don't go through at all.

Just now, I counted 53 posts, but there are supposed to be 64
comments according to the official count. Probably two of those
missing posts are mine. I got the error message, and the post
never showed up on the board, but the count increased anyway.
Posted by Thrudheim (306 comments )
Reply Link Flag
Thanks for this post
I was kind of hoping that the webmaster was aware of those
issues, and would sort them out eventually. If anything, they
have got worse over the last weeks. So, yeah, please have a look
at this, it is mighty irritating to your customers. Thanks.
Posted by Tui Pohutukawa (366 comments )
Link Flag
Indeed
I get errors all the time with this comment system. It's a nuisance.
Posted by Christopher Hall (1205 comments )
Link Flag
your A+ technician, then I am Mickey Mouse
The Operatings systems are black and white. With os x you get a
secure unix operating system, with Windows xp you get a
operating system built from windows nt 4.0 . You should the
weakness from the two systems. yes, Windows is on 90% of the
computers in the world, doesn't make it the best operating
system. A unix core or linux core has better security than
Microsoft Windows, because it is built that way from the ground
up. Windows has lots of programs and games, and it is on
almost every pc you buy. That said and done, I prefer os x
because of it's reliability and security more than windows. I own
a sony vaio, dell, and a gateway. My mac mini is over a year old,
my kids play on it and it has never crashed. You can't beat that,
and no technician can tell me any better. All my other
computers have crashed at least once, and I do have anti-virus
software, and anti-spyware. So play your game somewhere else.
I just don't believe you.
Posted by chris hamilton (6 comments )
Reply Link Flag
macs or pcs
this question will keep on coming up on every mac posting that I
see so I see no reason why I should not have my two cents
worth.
My wife and I have both been/are IT professionals and have both
used UNIX, windows (from 3.1 to XP SP2) and os X. Both of us
are in agreement that windows is just simply flawed in
comparison.
I have been a substitute teacher in recent years in over fifty
schools, of which only two used Macs. Those were the only two
that did not have networking issues when running half my
classes. They were also relied on more technical support despite
having less PCs than the other schools had macs.
So as a personal computer user and as a professional, the mac
far outweighs the PC and the increase in sales of the Mac reflects
this. According to the story, fifty percent of people who bought
macs were new users who had never bought one before.
If for some reason, I decided to switch away from macs for some
reason in the future, it would not be back to windows. It would
be to Linux or UNIX. Windows have had a decade and have
consistently proved themselves to provide less than adequate
operating systems.
Posted by yikes31 (71 comments )
Reply Link Flag
easy macs
I bin usin a mac kumputer naow fer nigh onter seben yeers. I
aint no teckie an I doan want ter be one. Butt, the reason my
awfice naow uses all macs iz kinda innerestin.

Yoo cee, wee ud uster have a buncha pcs and thay mostly did
ok, xcept wen thay didnt. I mean lak thay wud crash an cease
upp sorta offen and sech lak, jist wen yoo needed them the
mostest. Wee cud lib wid that mostly and eben aloosin the dayta
sumptimes. Butt, the neckworking wuz a nitemare. Wee had da
latest in rooters an switches and sech lak, but aboaut too ore
free thimes a weak things ud quit awerkin fer usns. I payd
more per weak ter hab tha teckies kum outn an git thangs ter
werkin agin than Ise payn fer my 2nd gurlfrens aparrtmint.

Sumboddy tole usns to go aout and git a mac and I done that -
Is tha boss you cee. At first hit wuz kinda strange ta use butt
onct I got the hang ob hit I lakked hit purty much. In fackt, I
lakked hit so much I went aout and bougth a cupple moore. I
found aout that yoo could jist plug them succers tergether and
thayd light right awf and see one annudder. Then I deesided to
git a few moore fer the awfice and got aourselbs a rooter to
hook em tergether.

Thangs werked slickern a-slyden a greesy strang outn a cats
rare orafice. Wee nebber had tha 1st hardware problum, nebber
onct. At 1st wee did hab sum kumpatibility problums wid
applikatiuns inneracktin wid tha pc wurld butt nuttin wee cudnt
hanndle. Thangs wuz awerkin so slick and so gud I got ridd of
all the pcs wee had. I gave em away in fackt jist ter git em
aoughten the awfice! Wee hab not had the teckies out ter doo a
darrned thang cince abaout 1999 wen we switched ober. In
fackt, I myselbf duz all tha teckie stuff needed in aour awfice -
weese a-runnin abaout tin macheens. I no dats right bekawse
dats az hye az I kin caount.

Naow ob coarse wid tha dual prosesser macs yoo kin runn any
dammmned thang yoo wanter on doz.. No problums, no haow.
An, thays awlways mostly plug an play - jist plug yer stuff in
and tha kumputer cees hit and taykes awf. Hit dont knead
know dribers nair nothin.

Naow I aint got know axt ta grind on kumputer makes and sech
lak, butt yoo cudnt git me to go bakk too pcs fer know
amaount ob monney deze days. Tha onliest thang I wurry
abaout is that dose mac macheens wil git so poplar that
ebberboddys gonna went em and dribe tha dang prizes up skye
hye.

Ennyways, cince wee switched to macs I bin able ter afford my
3rd gurlfren easy, know problum.
Posted by gnarlyolsen (7 comments )
Reply Link Flag
Worldwide Market Share Is Lower
According to IDC, Apple's Q2 2006 worldwide market share is somewhere below that of (who?) Fujitsu/Fujitsu Siemens.
Posted by john55440 (1020 comments )
Reply Link Flag
 

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