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Apple posts record quarterly earnings. Steve Jobs Rants.

|October 19 2010 |Industry News, Apple iPhone, Mobile OS

Apple announced fourth quarter earnings yesterday. The company posted revenue of $20.34 billion and net quarterly profit of $4.31 billion. The revenue is 66% higher compared to last year ($12.21 billion) and the quarterly profit is 70% higher compared to last year ($2.53 billon) - Source. This is the first time that Apple has made $20.34 billion in a single quarter.


When compared with Google, apple is way ahead. But Google seems to be following the same trajectory as that of apple while staying behind. Google reported revenue of $7.29 billion for the third quarter and a net income of $2.17 billion. The revenues are 23% higher compared to the third quarter of 2009 ($5.94 billion). The net income is 32% higher compared to the third quarter of 2009 ($1.64 billion) - Source

Steve Jobs took part in the analyst calls and was very positive and upbeat about the company's future. He was answering the questions of analysts ranging from company's strategy to android to smartphone market to tablet market. Some important comments are summarized below. Steve was making a strong case against Google's points. Google portrays Apple as a 'closed' system and android as an 'open' system and how 'open' is forward-looking than the 'closed' systems. Steve defended saying "Open systems dont always win". Jobs made a strong case against Android by pointing to 'fragmentation' levels among android phones. Every manufacturer customizes the OS with custom interfaces and this creates confusion among users. Users are not always going to have same experience in every handset.

We at 91mobiles also believe that Steve has a case. Two recent app launches symoblizes this. Tweet Deck (Twitter client) for Android was delayed. Because, the developer had to provide 100 different versions for 100 different versions of android on 244 different handsets! Rovio Mobiles, developer of Angry Birds - a very popular game also mentioned that they took so long to launch a final version because there were simply too many version of android spread across many handsets.

Steve was also very particular about the minimum size requirement for tablet screens. He says 10 inch is the minimum required and provided lot of relevent arguments for the case (which we have summarized below).

Steve Jobs on Earnings

"We sold 14.1 million iPhones in the quarter which represents a 91% unit growth over the year-ago quarter and was well ahead of IDC's latest published estimate of 64$ growth for the global smartphone market in the September quarter"

Steve Jobs On Android

"Last week, Eric Schmidt reiterated that they are activating 200,000 Android devices per day, and have around 90,000 apps in their app store. For comparison, Apple has activated around 275,000 iOS devices per day on average for the past 30 days, with a peak of almost 300,000 iOS devices per day on a few of those days. And Apple has 300,000 apps on its App Store."

"Google loves to characterize Android as “open,” and iOS and iPhone as “closed”. We find this a bit disingenuous, and clouding the real difference between our two approaches."

"Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same."

"Many Android apps work only on selected Android handsets, running selected Android versions. And this is for handsets that have been shipped less than 12 months ago! Compare this with iPhone, where there are two versions of the software, the current and the most recent predecessor, to test against."

"In reality, we think the open versus closed argument is just a smokescreen to try and hide the real issue, which is, “What’s best for the customer – fragmented versus integrated?” We think Android is very, very fragmented, and becoming more fragmented by the day."

"Unfortunately, there is no solid data on how many Android phones are shipped each quarter. We hope that manufacturers will soon start reporting the number of Android handsets they ship each quarter. But today that just isn't the case. Gartner reported that around 10 million Android phones were shipped in the June quarter and we await to see if iPhone or Android was the winner in this most recent quarter."

"The multiple hardware and software iterations present developers with a daunting challenge. Many Android apps work only on selected Android handsets running selected Android versions. And this is for handsets that have been shipped less than 12 months ago. Compare this with iPhone, where there are two versions of the software, the current and the most recent predecessor to test against."

"In addition to Google's own app marketplace, Amazon, Horizon and Vodafone have all announced that they are creating their own app stores for Android. So there will be at least four app stores on Android, which customers must search among to find the app they want and developers will need to work with to distribute their apps and get paid. This is going to be a mess for both users and developers. Contrast this with Apple's integrated App Store, which offers users the easiest-to-use largest app store in the world, preloaded on every iPhone. Apple's App Store has over three times as many apps as Google's marketplace and offers developers' one-stop shopping to get their apps to market easily and to get paid swiftly."

Steve Jobs On the Tablet Market

"I’d like to comment on the “avalanche” of tablets poised to enter the market in the coming months. First, it appears to be just a handful of credible entrants, not exactly an avalanche. Second, almost all of them use seven-inch screens, as compared to iPad’s near 10-inch screens."

"One naturally thinks that a seven-inch screen would offer 70% of the benefits of a 10-inch screen. The screen measurements are diagonal, so that a seven-inch screen is only 45 percent as large as iPad’s 10-inch screen... While one could increase the resolution of the display to make up some of the difference, it is meaningless unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one-quarter of their present size."

"Every tablet user is also a smartphone user. No tablet can compete with the mobility of a smartphone... The seven-inch tablets are tweeners: too big to compete with a smartphone, and too small to compete with an iPad."

"iPad now has over 35,000 apps on the App Store. This new crop of tablets will have near zero."

Steve Jobs On the smartphone market

"I think right now it’s a battle for the mindshare of developers and for the mindshare of customers, and right now iPhone and Android are winning that battle."

Steve Jobs On Blackberry

"We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company."

"I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android."

On Nokia (and developers)

"Nokia makes $50 handsets, and we don’t know how to make a great smartphone for $50. We’re not smart enough to have figured that one out yet, but believe me I’ll let you know when we do."

"Most of them [developers] will not follow you. Most of them will say, 'I’m sorry, but I’m not going to write down a watered-down version of my app just because you’ve got this phone that you can sell for $50 less, and you’re begging me to write software for it'."

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