First, let’s get the numbers out of the way. For their first fiscal quarter ending on December 25, 2010, Apple – a small American tech company who you may have heard makes a phone, computers (and some kind of ‘pad’?) – earned a profit of $6 billion on $26.74 billion of revenue.
To put that into perspective, their sales of 4.23 million Macs, 16.24 million iPhones, 19.45 million iPods and 7.33 million iPads produced more revenue in one quarter than the annual gross domestic product of Iceland, Paraguay or Cyprus. It also means Apple pulls in more revenue than the GDP of nearly two-thirds of the world’s countries.
Don’t get too excited though! Gross margin dipped, moving to 38.5% from 40.9%… Ha! For the record, those kinds of gross margins for people who make traditional computers are completely unheard of. It also means those teardowns that suggest the iPad only costs around $260 to make are probably true. But it also means that Apple strength continues to lie in producing high-margin hardware that is itself fueled and sustained by low-margin services like iTunes and the App Store.
More to the point though, it means that when Steve Jobs said “We are firing on all cylinders”, he really meant it. Apple are in a formidable position as a company, who can seemingly do no wrong.
But with Jobs possibly gone from the company, what’s clear is that Apple cannot afford to continue to simply tweak its existing line-up. Stay tuned to Techi for our thoughts on where Apple needs to go next.