Apple

"We're thrilled to report our best quarter ever." Apple CEO Steve Jobs has uttered those words or some variation on them after many of the company's holiday quarters, and this year will be no different, if analysts are to be believed.

Remarking on Apple's December quarter in a note to investors Monday morning, Thomas Weisel Partners analyst Doug Reid said iPhone and iMac sales for the period have been quite strong.

"Our checks suggest December quarter sales of iPhones are tracking ahead of our prior estimates, driven by increased market penetration in the United States, additional carrier agreements in multiple countries, and first-time launches in Korea and China," Reid wrote. "Mid-December Apple Store and carrier checks indicate that the 2009 holiday shopping season has seen a sharp increase in the purchase of iPhone as a gift option. We also estimate better than expected iMac sales in the quarter following a successful product refresh (announced on October 20). Our checks indicate strong demand throughout the holiday season for the new iMac line."

Seems that the shipping delays associated with Apple's new 27-inch iMacs haven't undermined sales nearly as much as some had feared. Reid says that demand and in-store availability of both 21.5-inch and 27-inch models remains strong, so much so that he's raising his iMac unit estimate for December quarter from 655K to 721K. Demand for the iPhone, too, has been strong thanks to the annual holiday consumer binge and the end of carrier exclusivity agreements in some markets.

"Mid-December Apple Store and carrier checks indicate that the 2009 holiday shopping season has seen a sharp increase in the purchase of iPhone as a gift option," Reid notes. "The ability to add iPhones to existing family service plans with carriers has been a key driver in C4Q09, our checks indicate. In addition, industry checks also suggest that AAPL is benefiting from the addition of second or third carriers in markets (e.g. UK, Canada) and from a strong initial sales ramp in Korea."

How much of a benefit? A sizable one. Reid figures Apple will sell 8.21 million to 8.89 million iPhones during the December quarter. And he expects it to sell 31.59 million to 32.27 million in fiscal 2010.

$5 and a ratty "Think Different" t-shirt says Apple shares will hit another new 52-week high today.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Tech stocks typically have to break significant price milestones or have dramatic dips to make CNET's news story queue. Likewise, we try not to hop on the Apple rumor bandwagon unless there's something credible or/and novel to report.

But being as it's Christmas Eve and all, we'll go out on a limb and offer you this nugget anyway. Apple's stock closed Thursday at an all time high of $209.04, up 6.94 points (3.43 percent) in a shortened day of trading on unconfirmed rumors that the company might unveil a long-awaited portable tablet computer next month.

The Apple blogosphere went wild Wednesday following several reports that the company told some of its key developers to prepare versions of their iPhone apps that will work on a device with a larger screen, in time for an event next month.

And Financial Times cited "people familiar with the plans" saying that Apple has booked the Yerba Buena Center for the Arts in San Francisco "for several days in late January." That's the very venue where Apple CEO Steve Jobs made his first public appearance in September following his medical leave.

For what it's worth, Piper Jaffray analyst Gene Munster also said in a research note Wednesday that there's a 50 percent chance Apple will announce a tablet at a January event.

Apple's tablet is all the rage these days. Companies are lining up to pledge support for the tablet even though Apple hasn't acknowledged its existence.

The latest publishing company to throw its hat into the tablet ring is Time Inc. With a concept version in hand, the publisher showed AllThingsD a version of the tablet-size edition of Sports Illustrated.

Time says with some confidence that its digital magazine format will run on "whatever tablet Apple or [anyone] else has up their sleeves." As you might expect, Time is planning to make all of its titles available on the new format.

Time isn't the only company getting ready for the Apple tablet. Conde Nast said in late November that it is preparing a version of Wired for the elusive tablet computer.

New York Times Executive Editor Bill Keller is also looking to the tablet. He told staff in October that the tablet is one platform the company needs to be prepared to take advantage of in the future.

It's been widely reported by sites like Gizmodo that Apple has met with newspaper and magazine publishers to discuss content for the tablet, but Apple has remained quiet on the issue.

Although a judge recently ruled in favor of Apple in its copyright infringement case against Psystar, the two companies have reached a new settlement, according to Computerworld and other reports.

Details are sketchy at this point, and there's no confirmation from Apple, but Psystar claimed in a motion filed Monday that a partial settlement has been reached.

"Psystar has agreed on certain amounts to be awarded as statutory damages on Apple's copyright claims in exchange for Apple's agreement not to execute on these awards until all appeals in this matter have been concluded," noted Psystar's motion filed in federal court in San Francisco. "Moreover, Apple has agreed to voluntarily dismiss all its trademark, trade-dress, and state-law claims. This partial settlement eliminates the need for a trial and reduces the issues before this Court to the scope of any permanent injunction on Apple's copyright claims."

Psystar also seems to be looking for a loophole against any injunctions. Apple had asked the court to prevent Psystar from selling clones not just with Leopard, but also Snow Leopard, which was released after the lawsuit began. But in its filing, Psystar argued that it should be allowed to sell its Rebel EFI utility, which lets customers install Snow Leopard on clones sold by the company, thus moving the legal burden away from Psystar.

Psystar's motion also indicated that another motion with further details would be filed Tuesday with Judge William Alsup.

Apple's lawsuit against Psystar began in July 2008 after Psystar started selling Mac clones with OS X installed on them. Apple has argued that its end user license lets people install its operating system on Apple computers only.

On November 13, Alsup ruled in favor of Apple, finding that Psystar's use of OS X on its clones was not "fair use" as the company contended and further finding that Psystar violated the Digital Millennium Copyright Act (DMCA) by "circumventing Apple's protection barrier."

Since then, Apple has been keen to shut down Psystar's Mac clone business permanently, calling for an injunction against the company and potentially millions of dollars in damages, substantially more money than the clone maker has.

Alsup's findings and Apple's fervor in going after Psystar raise the question of why Apple would agree to any kind of settlement at this point. A hearing was set for December 14, with a full trial scheduled to start in January. But if the latest news from Psystar is true, then the company may be able to avoid further courtroom drama.

Neither Psystar nor Apple has responded to requests for comment. We'll provide further details of this latest development as court documents become available.

It seems that Apple doesn't respect Verizon's Droid phone quite as much as it does Microsoft's PCs. But two new ad spots, launching Monday evening, come as close as Apple has done thus far to directly attack the allegedly do-it-all robotphone.

The Droid, you see, went after Apple in its teaser campaign with some telling remarks and the hearty claim that Droid does what the iPhone doesn't. Then Verizon decided it would be fun to knock both the iPhone and AT&T's spotty 3G coverage with its "Misfit Toys" concept.

AT&T has already replied by hustling a hastily-dressed Luke Wilson into directing a few resentful pins at Verizon's effigy. However these new ads, while entirely in keeping with the iPhone tone and style, end with a line that expressly assaults the doings of Droid--or rather, its alleged non-doings.

Both ads focus on the iPhone's ability to allow you to use voice and data capabilities simultaneously over the AT&T network. By asking gently at the end of each spot "Can your phone and your network do that?" Apple is bursting what it sees as the inflated stealth bombing that accompanied the launch of the Droid.

Apple iPhone Ad - Did You See My Email? from Arik Hesseldahl on Vimeo.

Apple iPhone Ad - What Time's The Movie? from Arik Hesseldahl on Vimeo.

These ads don't mention the Droid or Verizon by name. But the fact that Apple has decided to address its rivals, however obliquely, suggests that one can look forward to more accusations, more bickering, and more attempted one-upmanship.

'Tis the season of goodwill, after all.

A new report from Digitimes on Thursday says Apple's anticipated tablet will not be released in the first part of 2010 as originally thought, but rather in the second half of the year. One industry analyst said the timing of the release is irrelevant to Wall Street.

According to Digitimes, Apple will delay the release of the long rumored tablet because it has decided to change some of its components. Citing unnamed sources, the report says Apple will launch a model using a 9.7-inch OLED from LG.

Financial analysts don't seem to be concerned about the report and are not worried if it doesn't come in the first part of 2010, as it was first rumored to be delivered.

"At this point we cannot confirm or deny the validity of this report, but believe the exact timing is irrelevant given Street models do not currently reflect the tablet, expectations for actual units in 2010 are low, and investors focus is more on whether the tablet is real and less on timing," said Piper Jaffray senior research analyst, Gene Munster, in a note to clients on Thursday.

The price of the tablet quoted by the Digitimes sources does not fit with Munster's expectations either. Digitimes says it expects two models, with one priced at $2,000 and the other priced between $800 and $1,000.

Munster maintains that Apple will price the tablet between the current $199 iPod Touch and the $999 MacBook. Munster said he expects pricing to be in the $500 to $700 price range.

If the tablet was released in September 2010 and costs $600, Munster estimated Apple would sell 650,000 of the units before the end of the year.

Apple's supposed tablet has been one of the most talked about devices that nobody has seen. The company has reportedly spoken with media companies from around the world about having their products available for the device when its released, but Apple has yet to confirm or deny the tablet's existence.

Apple's new store on the Upper West Side opens on Saturday at 10 a.m.

(Credit: Marguerite Reardon/CNET)

NEW YORK--Apple hopes to grow its market share with an increasingly aggressive retail strategy that includes opening bigger stores in more locations.

At a media preview of its fourth store here, which is located on the Upper West Side, Ron Johnson, Apple's senior vice president of retail, said Apple's retail strategy is all about getting consumers to switch from PCs to Macs.

New Manhattan Apple store on the Upper West Side--photos

"Our Apple stores are a magnet for switchers," he said. "About half the people who come into our retail locations are first-time Mac buyers."

Johnson said that Apple's Genius Bar, which provides face-to-face customer service and support, and other services, allow people to switch from a PC to a Mac with confidence. For example, Apple offers its One-to-One service, which allows new Mac users to drop off their old computer so that files can be transferred from the older computer to a new Mac.

The new Apple store on the Upper West Side is the first to have a glass ceiling.

(Credit: Marguerite Reardon/CNET)

The service, which costs $99 for one year, then allows users to meet one-on-one with an Apple representative to discover where the new content is on the computer and to learn how to use more advanced features. Customers can use the one-on-one instruction service as much as they like for that one-year period.

Johnson also said that the Apple stores provide a good way for customers to test out and play with new products before they buy them. Even if customers don't buy their Mac, iPhone, or iPod in the Apple store, the experience they get from looking at it in the store is often enough to help them make a purchasing decision.

The strategy seems to be working. Apple has been increasing its overall sales and market share for its products over the past year, particularly for its Macs. In the third quarter of 2009, the company sold about 3 million new Macs, which was a 17 percent increase compared to a year earlier, according to IDC. This was well ahead of the overall global PC market, which grew by only about 2 percent, according to IDC. For 19 of the last 20 quarters, Apple has outpaced the market in terms of sales.

Even though overall sales have increased, Apple hasn't made huge gains in market share. But it has made modest improvements. Over the past year, the company has managed to bump its market share up to 9.4 percent in the third quarter of 2009 from about 8.6 percent in the third quarter of 2008. Apple is in fourth place in the overall computer market, lagging PC makers Hewlett-Packard, Dell, and Acer.

In 2001 when Apple opened its first store, plenty of people questioned whether Apple's retail strategy would even work. But eight years and 279 stores later, the retail business has become a big revenue driver for the company. In fiscal 2009, Apple generated $6.6 billion of the company's $29.9 billion in revenue from its retail stores, Johnson said.

Some of the stores, such as the Fifth Avenue store in Manhattan, which sits below a glass cube across the street from the Plaza Hotel, have become tourist destinations.

Apple purposely puts stores in high-traffic areas to attract customers, Johnson said. And in the case of big stores like the ones in Manhattan, it's also important to put them where people visit. Worldwide some 170 million visitors entered an Apple store in fiscal 2009.

Apple's flagship stores, or as the company calls them "significant stores," are especially designed to draw in visitors with eye-catching design and architecture. And the new Upper West Side store at Broadway and 67th Street is no exception. The new store features a glass roof, the first ever for an Apple store. And it also features 45-foot-tall stone walls, a large ground floor to showcase products, and a glass spiral staircase that leads to the lower level of the store where Apple provides service.

Apple plans to open between 40 and 50 new retail stores in 2010. More than half of these new stores are expected to be outside the U.S. Some of the countries where Apple will open new stores include the United Kingdom, Canada, Australia, Italy, Switzerland, Germany, France, and China, Johnson said.

Apple's main competitor, Microsoft, is trying to emulate Apple's retail success by opening up stores of its own. Recently, the software maker opened locations in Scottsdale, Ariz., and Mission Viejo, Calif.

Apple's latest Manhattan store on Broadway at West 67th Street will open to the public at 10 a.m. EST on Saturday.

Apple did not disappoint investors as it closed out its fiscal year. The company reported its earnings Monday afternoon, calling the fiscal fourth quarter of 2009 its "most profitable ever."

Apple recorded revenue of $9.87 billion and earnings of $1.67 billion, or $1.82 per share. That's up from the $7.9 billion in revenue and $1.26 per share of a year ago. And that easily fell within the range of what Wall Street was hoping for. Analysts had been expecting earnings per share somewhere between $1.24 and $1.72, and revenue between $8.74 billion and $10.55 billion.

The evidence of Apple's continued ability to float above the economic storm of the past year sent its shares over the $200 mark in after-hours trading, surpassing its 52-week high of $192.32.

Apple is still sticking with accounting rules that require it to recognize revenue for the iPhone and Apple TV over a two-year period. Chief Financial Officer Peter Oppenheimer said that the company can start recognizing the bulk of iPhone and Apple TV revenue in the quarter the products are sold anytime over the next year. But he said he's still unsure when Apple will actually make the switch.

As in previous quarters, Apple again opted to break out what revenue would look like if it didn't follow those rules. For the fiscal fourth quarter, which ended September 28, revenue would rise to $12.25 billion and earnings to $2.85 billion.

Apple says that it sold more iPhones than ever during the quarter, 7.4 million, representing a 7 percent rise from a year ago. That's due to the expanding number of regions, including China at the end of the month, that have the iPhone--as well as more carriers than ever, said Apple COO Tim Cook. He also pointed to the continually expanding App Store, which now has 85,000 applications available.

Cook also was able to get a dig in at its competitors in the smartphone market--one of whom launched a snarky anti-iPhone ad on TV over the weekend--saying, "Frankly I think people are really just trying to catch up with the first iPhone developed two years ago. We've moved beyond that."

And while the iPhone is indeed continuing to boost Apple's bottom line, the company also moved a lot of Macs during the traditional back-to-school quarter. Apple says it sold 3.05 million Macs, 17 percent more than a year ago. iPods were, as expected, the company's weak spot--the 10.2 million sold was 8 percent less than a year ago.

In a statement, CEO Steve Jobs crowed about the successful sales period for the Mac and iPhone, but also hinted at what's in store for next year.

"We are thrilled to have sold more Macs and iPhones than in any previous quarter," Jobs said. "We've got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010."

In fact, the company that usually doesn't like discussing unreleased products seemed to take pains to cryptically reference them. Oppenheimer mentioned it a couple times, saying the company is looking forward "to exciting new products. We're very enthusiastic for the year ahead."

When discussing the upcoming year, Cook also noted "an amazingly strong product pipeline."

Is this code for the long-awaited touch-screen tablet? Or the less-exciting but recently speculated iMac and white plastic MacBook update? Blogger John Gruber at DaringFireball.net also says he hears that Tuesday will bring a swarm of new products, including a multitouch trackpad for Mac desktops. Perhaps the extra attention called to unnamed future products is a way of detracting from what is supposed to be Microsoft's big week, with the launch of Windows 7 scheduled for Thursday.

In regards to its brand new Snow Leopard operating system, Cook said that sales of OS upgrades to Mac OS X 10.6 were twice as high as the same five-week initial sales period from the previous version of the OS, called Leopard. "We were very pleasantly surprised by it," he said.

Apple stores also had their best quarter ever in terms of revenue ($1.7 billion) and Mac sales (670,000), and 15 new locations opened over the three-month period.

But as the company turns in a string of "best fill-in-the-blank quarters ever" (holiday, non-holiday, in the history of the company), it's hard not to wonder if exceedingly high expectations will soon be a problem. Apple is, as always, choosing to be conservative. The company is predicting its fiscal first quarter 2010 will bring in between $1.70 per share and $1.78 per share and revenue of between $11.3 billion and $11.6 billion.

This post was updated throughout at 3:40 p.m. with information from the company's earnings call.

Although there are more signs lately that the worst of the recession is over, Apple is one of the few companies that has seen little of the effects of the recession to begin with.

We'll find out if the company's good health has remained during the quarterly checkup Monday afternoon. According to Wall Street, it's been another good three months for the Cupertino, Calif.-based company. Apple's stock price jumped 43 points during the quarter to close at $185.35. Because of a string of impressive earnings announcements dating back a year ago, the launch of the company's latest operating system update, signs it gained share in the smartphone and computer markets, and a helpful accounting rule change, financial analysts are expecting good things from the company's fiscal year fourth-quarter earnings.

Did price cuts on the MacBook improve Mac sales for the quarter?

(Credit: Dan Ackerman/CNET)

Analysts are expecting Apple to record earnings per share somewhere between $1.24 and $1.72, and revenue between $8.74 billion and $10.55 billion for the quarter ending September 30. Apple is known to provide consistently conservative guidance for future quarters, hence the wide gap in analyst estimates.

But a good way to know what's to come can usually be seen in the unit sales reports. Last week IDC reported that Apple had amassed a 9.4 percent share of the U.S. PC market--a jump from the 8.6 percent of the previous quarter. Near the end of the previous quarter Apple offered some price cuts on most of its Mac models. The sales numbers for the quarter, whatever they end up being, will be regarded as a commentary on whether those price cuts went far enough.

Apple watcher Gene Munster over at Piper Jaffray says he's had a peek at Mac unit sales for the quarter, and he says the company is on target to report sales of 2.8 million Macs. That would be an increase over the previous quarter's sales of 2.6 million, and it makes sense: The third quarter is a traditional time for people to buy computers ahead of the back-to-school season, and Apple also released its long-awaited operating system update, Mac OS X 10.6, or Snow Leopard.

On the smartphone side of the business, if Apple does once again report good numbers, it'll be one of the few in that industry. Despite constant attempts by rival handset makers to produce the "iPhone killer," Apple's main competitors in the smartphone world have struggled during the most recent quarter--Nokia, Palm, and Research In Motion each posting disappointing results.

Piper Jaffray is estimating that Apple sold 7.5 million iPhones. Munster said inventory checks showed that demand for the iPhone 3GS is "outstripping supply," which means that iPhone sales for the next several quarters should be fairly steady. We should also get an update on the number of countries and carriers that have the latest iPhone model. Apple had said in July that it was supposed to be in 80 countries by the end of the summer.

The iPod is the only real question mark when it comes to Apple's main revenue-generating products. The quarter ending in June was the first in which iPod sales saw a year-over-year drop. Apple acknowledged it last quarter, saying that it expected eventual declines in iPod sales, and that it was the reason it developed the iPod Touch. Chief Financial Officer Peter Oppenheimer actually broke out the individual sales numbers for each iPod model and cautioned that the company expected "to cannibalize ourselves with iPod Touch and iPhone."

A slew of new iPods--including the new camera-equipped Nano--were introduced near the end of the quarter, so the full effect of those new models probably won't be visible until the following quarter.

(Credit: James Martin/CNET)

The biggest change during the quarter however had nothing to do with anything that had a keyboard or a touch screen. Apple was one of several companies to lobby (successfully) for an accounting rule change that, if applied to the most recent quarter, will likely show much higher revenue for the iPhone.

The practice--in which Apple has been recognizing revenue for the iPhone and Apple TV over a two-year period--was put in place to avoid charging a fee for every product upgrade. It was something Apple was told it would need to satisfy accounting regulations that require companies to establish a value for product upgrades. The new rule won't change the amount of revenue coming into the company's coffers, but it will provide a more accurate picture of how much money the iPhone in particular is bringing in every quarter.

Check back Monday afternoon. Apple's results will be posted shortly after 1 p.m. Pacific.