Tuesday, 23 October 2007

Juicy Apple

Apple’s Q4 figures, released last night, beat all expectations. Revenues for FY07 rose 24% to $24b and profits were up a staggering 75% at $3.5b. Apple is benefiting from the ‘halo effect’ as iPod devotees realise that the same style can be found in the iMac too. iMac sales rose 34% in Q4 to 2.16m units (7m for the year) and now represent 50% of Apple’s revenues. Apple sold 52m iPods in FY07 – up 30% on FY06. Even the very recently introduced iPhone exceeded expectations with 1.12m units sold in the quarter; 1.39m sold since the launch on 29th June 07.

As I wrote last week, Apple shares had already doubled this year and were the best performer (by far) in the ‘Holway Portfolio’. After a 2.3% rise before the bell, Apple shares surged another 6.8% in after hours trading to $186.21; that’s a rise of 115% since the start of the year. Interestingly, if that price is maintained today, Apple’s market value at $163b will exceed IBM’s ($156b) for the first time.

Most readers will know I have been an ardent Apple fan since 1983 when Apple UK lent me a pre-release Lisa for the weekend. It blew my mind away. When the Mac was released in 1984 I tried (unsuccessfully) to get Hosykns (and the corporate world in general) to adopt it. But “real men didn’t do mice or gui’s”. When I formed Richard Holway Ltd in 1986 (where we were totally Mac driven for 14 years) my first assignment was with Apple UK. I well remember that they presented me with a market research report which showed Apple with a 1.5% share of the UK corporate PC market. This report had “subject to a margin of error of + or – 3%” in small print at the bottom!)

I’m not sure what share of the corporate market Apple now has – maybe it is little changed. But according to figures from Gartner yesterday, Apple now has an 8.1% share of the US PC market trailing only Dell (29.1%) and HP (25.7%). That’s a remarkable achievement.

The all-important holiday season is just starting. In the Holway household, the debate is hotting up. “Do you want an iPhone or an iPod Touch?” Whatever, Apple should be in for a good Q1 too.

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