TV-PGOctober 13, 2004: Apple posts a nine-figure profit on its biggest Q4 revenues in nine years. Meanwhile, the company announces that six retail "mini-stores" will open this Saturday, and iPod mini clones are coming fast and furious just in time for the holidays...
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Break Out That Bubbly (10/13/04)
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Here's a question for you all: when Apple revealed its fourth-quarter financial results this afternoon, which '60s-era Batman show onomatopoeic onscreen sound effect did it make? Because when the news of Apple's astonishing profit first smacked us all upside the noggin with two tons of black ink in a sock, we were pretty sure we saw a "ZOK!", but in hindsight now we're thinking it may have been more of a "KAPOW!" sort of thing. Need an instant replay to refresh your memory? Then clear your mind, reread the original press release, and let us know which word flashed on the screen when it first sunk in that Apple hadn't just beaten analyst expectations, but had actually pummeled them into a fine paste that goes great on a Triscuit.

Yes, faithful viewer wavedancer was first to notify us that whereas the analysts had been expecting Apple to post a Q4 profit of about $70 million, the actual numbers came in at a whopping $106 million, up from $61 million last quarter and $44 million in the same quarter a year ago. Better still, that $106 million takes into account a one-time "after-tax restructuring charge of $4 million," which means that Apple's actual profit from recurring items this past quarter was $110 million. That's roughly 57% higher than the analyst consensus, and about 35% higher than even the single highest estimate of all 21 analysts who wagered a guess.

Believe it or not, though, Apple's profit is actually among the worst news the company revealed today. You know how Apple commonly posts a higher-than-expected profit and then its stock price tanks anyway? Well, not this time, kiddies; in after-hours trading, at least, AAPL was up an additional $2.66 a share to $42.41, and we expect at least some of that gain will carry over tomorrow. Why the additional vote of confidence from Wall Street, you ask? Well, mostly it's a revenue thing, we expect; revenue for the quarter was $2.35 billion, which represents a 37 percent increase from the same quarter a year ago, and according to Steve Jobs himself (yes, he's even back to being quoted in the press releases-- take that, pancreatic cancer!) it was Apple's "highest fourth quarter revenue in nine years."

On top of that, the company sold over two million iPods last quarter, retail store revenue almost doubled, Mac sales increased 6 percent from a year ago, iBook and PowerBook sales in particular are up 74 percent and 21 percent respectively, and the only Mac models that actually declined in units shipped were ones that now use a G5 processor; Apple cites availability problems from IBM as the culprit and expects all G5-based products (with the possible exception of the dual 2.5 GHz Power Mac) to reach a supply-demand balance before the year's up. No wonder Wall Street's all giddy for AAPL tonight.

But back to that profit, because there's the little matter of our quarterly Beat The Analysts contest to resolve. Would you believe that Apple's results even surpassed the typically overoptimistic guesses of the AtAT faithful? Of the 259 last-minute entries, only 9 predicted a Q4 profit higher than Apple actually reported, and three of those were guesses of over $7 billion by entrants who either can't count zeros or can't control their alcohol intake. No one hit the $110 million figure on the nose, but faithful viewer John O'Mara came closest with his prediction of $112 million, so that makes him our Grand Prize Winner. (Yes, we know his guess was higher than Apple's actual reported value. Who do we look like, Bob Barker? Don't answer that.) Congrats and kudos to John, whom we'll be contacting shortly to see about shipping him an AtAT shirt or a Golden Moldie software title from our Baffling Vault of Antiquity™.

Many thanks to all 259 viewers who managed to sneak in an entry before the ten-and-a-half-hour window closed on our Lightning Round, and if you aren't John O'Mara, well, you can always start crunching numbers now for next quarter's contest. Or just look at the new value of your AAPL holdings and giggle.

 
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Awww, Wookit How Cute! (10/13/04)
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Do you prefer the iPod mini over its big brother in spite of its much lower storage capacity not because its more portable, but just because it looks "cuter"? Does any visit to a supermarket or drug store require twenty minutes of oohing and aahing over the eensy trial-size shampoos and bottles of Scope? Are you the president of your local Verne Troyer fan club? Then good news about money wasn't the only fun stuff to emerge from Apple's Q4 earnings conference call tonight; for fans of all things diminutive, Apple also finally formally acknowledged its long-rumored plans to add mini retail stores-- and the first six are opening this weekend.

He was maddeningly vague when it comes to details, but yes, CFO Peter "Stop Calling Me Fred" Oppenheimer revealed that Apple is about to unveil "an entirely new retail design for a store that is half the size of our smallest store to date." Unfortunately he offered no insight into just what that design might be like, stating only that it will allow the company to establish a retail presence in "a variety of interesting new locations." But what interesting new locations? On an orbiting space station? In a bus station men's room? The mind reels. We know the first six will open "this Saturday across the U.S.," but ol' Pete neglected to mention exactly where.

Thank heaven for ifo Apple Store, then, who fills in most of the missing puzzle pieces. On the design front, reportedly the mini-stores will look the same as their larger siblings on the outside (only maybe a little smaller-- duh), but inside they'll have "flat, epoxy floors, stainless steel wall panels, wooden counters for hardware displays, and metal shelving for software and accessories." The walls themselves are said to be "back-lit photographs of people and activities," the ceiling is a "one-piece, translucent, back-lit membrane" (cooool), and there'll be a single counter at the rear of each store staffed by only a single pair of Wonder Twins. Most interestingly, ifo Apple Store reports that the mini-stores are apparently going to operate as satellite locations for nearby "full" Apple retail stores (which will obviously stock a lot more merchandise), and the mini-staff will be in constant communication with the personnel at the "main" location via AirPort-compatible Vocera Communications Badges.

As for where these puppies might open come Saturday, ifo Apple Store's got that, too: it lists seven locations, six of which-- three in northern California, two in Jersey, and one in the Seattle area-- are no more than forty miles away from an existing Apple retail store. The seventh, Carousel Center in New York, is "the one that does not open this weekend," presumably because it's 143 miles away from the closest existing Apple store and therefore doesn't have a nearby Big Brother to hook up with. More info may well be available by the time you read this, since Apple has reportedly called a Thursday press event at the mini-store at the Stanford Shopping Center, just down the road a few blocks from Apple's Palo Alto store. Prepare for cuteness!

 
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Send In The Clones (Again) (10/13/04)
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In light of the recent revelation that Apple's various iPods and minis hold a disgustingly high 92.1 percent of U.S. market share among sales of hard drive-based portable music players, faithful viewer Jonathan Zhan notes that apparently Apple's rivals have declared this to be Ugly iPod Competitor Week. We've already mentioned the newly-announced Virgin Player in passing, which, at the iPod mini's $249 price point, adds an extra 1 GB of storage space, an FM radio tuner, a little less weight, and, apparently, two headphone jacks; while Virgin's banking on its better feature list and the name recognition of the Virgin brand, the thing looks like a cheap plastic remote control that shipped with a sub-$50 silver-plastic commodity DVD player, and frankly, we can't see it as much of a threat to miniPod mania. But the "iPod mini killers" are popping up out of the ground like mushrooms, now, and at least two other pretenders to the throne are debuting this week.

First up: the Creative Zen Micro, which, as pictured at The Register, comes in some truly alarming colors and which Creative claims will "outshine all the others." Like the Virgin Player, the Zen Micro has an FM radio tuner and a 5 GB hard drive, but also boasts built-in voice recording and a 12-hour removable battery (so you can carry a spare). It's also 6 millimeters shorter than the mini (but .2 ounces heavier) and syncs contacts, calendar events, and a to-do list. Are its extra features worth its $280 price tag? That depends, but it's nice to know that the folks who have always wanted a bright orange MP3 player that glows blue can finally die happy.

The other "mini-killer" might not technically be announced this week, but faithful viewer mrmgraphics notes that, according to CNET, it's already made a public appearance as a Bill Gates prop during Microsoft's digital media event yesterday: yes, apparently Dell isn't satisfied having one flop on its hands, so in addition to the woefully sucktastic iPod clone known (to the three people who bought one) as the Dell Digital Jukebox, it seems that Dell is planning to roll out a "Pocket DJ" to go up against the miniPod. Since it's as yet unannounced, details from Dell are nonexistent, but Engadget has a teensy low-res photo and claims that the player will be a 5 GB model and will undercut the miniPod's price (surprise, surprise) by $50. We can't wait.

So clearly there'll be a pretty hefty selection of mini-class players available when the holiday-driven consumer frenzy kicks into high gear, and we'll just have to wait and see how much-- if any-- these 5 GB devices eat into Apple's 92.1 percent market share. Personally, we're not worried, but we wouldn't mind seeing Apple at least kick the mini's drive up to 5 GB, just to eliminate the most obvious feature discrepancy. Then again, Apple will most likely sell all the units it can make this quarter even at 4 GB, so why bother? Remember how crazy iPod sales were last Christmastime? That was, what, 733,000 units? Last quarter Apple sold over two million, and we doubt many people were buying them as Independence Day presents. Heck, reducing miniPod demand slightly this quarter might be just the thing to keep Apple from physically catching fire before New Year's...

 
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