Today Apple released their 2010 Q4 earnings, which surpassed the expectations of analysts. Here’s a brief breakdown of the important numbers:
- Record revenue of $20.34 billion (year ago quarter: $12.21 billion)
- Net quarterly profit: $4.31 billion (year ago quater: $2.53 billion)
- International sales accounted for 57% of Q4 revenue.
Apple Products Sold
- 3.89 million Macs (27% increase over year ago quarter)
- 14.1 million iPhones (91% increase over year ago quarter)
- 9.05 million iPods (11% decline over year ago quarter)
- 4.19 million iPads
The number of iPads sold surpassed Mac sales! It’s evident that the iPad is making waves in the tablet/PC industry, as its popularity is only going to grow.
During the conference call, Steve Jobs surprised everyone by chiming in. Normally he doesn’t participate in these live calls, other than his quotes in official PR releases. This time around, Steve Jobs had a lot to say about Google, RIM, and tablet competitors. Here is the part of the transcript that’s relevant to iPad users:
Second, 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 7-inch screens, as compared to iPad’s near 10-inch screens. Let’s start there.
One naturally thinks that a 7-inch screen would offer 70 percent of the benefits of a 10-inch screen. Unfortunately, this is far from the truth. The screen measurements are diagonal, so that a 7-inch screen is only 45 percent as large as iPad’s 10-inch screen. You heard me right – just 45 percent as large.
If you take an iPad and hold it upright in portrait view, and draw an imaginary horizontal line halfway on the screen, the screen on the 7-inch tablets are a bit smaller than the bottom half of the iPad’s display. This size isn’t sufficient to create great tablet apps, in our opinion.
Once you increase the resolution of the display to make up some of the difference, it’s meaningless unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one-quarter of their present size. Apple has done extensive user testing on user interfaces over many years, and we really understand this stuff. There are physical limits on how close you can put elements on a touch screen before users can not reliably tap, flick or pinch them. This is one of the key reasons we think that 10-inch screen size is the minimum size required to create great tablet apps.
Third, every tablet user is also a smartphone user. No tablets can compete with the mobility of a smartphone. It’s the ease of fitting into your pocket or purse. Its unobtrusiveness when used in a crowd. Given that all tablet users will already have a smartphone in their pocket, giving up precious display area to fit a tablet in their pocket is clearly the wrong tradeoff. The 7-inch tablets are tweeners – too big to compete with a smartphone, and too small to compete with an iPad.
Fourth, almost all of these new tablets use Android software, but even Google is telling these tablet manufacturers not to use their current release, Froyo, for tablets and to wait for a special tablet release next year. What does this mean when your software supplier says not to use your software in their tablet, and what does this mean when you ignore them and use it anyway?
Fifth, iPad now has over 35,000 apps on the App Store. This new crop of tablets will have near zero.
And sixth and last, our potential competitors are having a tough time coming close to iPad’s price point, even with their far smaller, less-expensive screens. The iPad incorporates everything we’ve learned about building high-value products… for iPods and Macs. We create our own A4 chip, our own software, our own battery chemistry, our own enclosure, our own everything. And this results in an incredible product at a great price.
The proof of this will be in the price of our competitors’ products, which will likely offer less, for more. These are among the reasons that we think that the current crop of 7-inch tablets are going to be DOA: Dead on Arrival. Their manufacturers’ will learn the painful lesson that their tablets will be too small, and increase the size next year, thereby abandoning both customers and developers who jumped on the 7-inch bandwagon with a …product. Sounds like lots of fun ahead.
Looks like another classic Steve Jobs ‘shoot from the hip’ rant about upcoming tablet competitors. Jobs may seem very arrogant in his rant, but it’s true. We’ll wait and see for competitor tablets to emerge and watch their sales closely. The RIM PlayBook is still vaporware, and the Samsung Galaxy Tab seems like the only viable “competition” to the iPad.
What do you think of Steve’s tablet rant? Do you agree or disagree with what he said?
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Posted under: iPad News