Apple’s accomplishments during fiscal 2013

‘We are pleased to report the results of the final quarter of Apple’s fiscal year ’13 with record four quarter iPhone sales, driving our highest September quarter revenue ever’ - Peter Oppenheimer - SVP, CFO.

Overview

Customers had an incredible response to Apple’s product line up, buying a 150 million iPhone, 71 million iPads and 16 million Macs across the fiscal year.

The company expanded the breadth and depth of its ecosystem and generated over $16 billion revenue from iTunes software and services. The company also welcomed almost 400 million visitors to our retail stores and opened or remodeled 49 new stores and for the second year in a row, produced over $50 million in revenue per store.

Apple generated record total company revenue of $171 billion, earnings of $37 billion and operating cash flow of $54 billion. The company paid over $8 billion in capital expenditures to both to supply chain, expand infrastructure and increased its retail footprint and also completed 15 strategic acquisitions. That’s an average of one acquisition every three to four weeks.

Apple more than doubled the size of capital return program to a $100 billion, including the largest share repurchase authorization in history and became one of the largest dividend payers in the world.

In fact, the company returned over $36 billion to shareholders through dividend and share repurchases in the last five quarters alone. The management remains firmly committed to objective of delivering attractive returns to shareholders through both business performance and return of capital. The company is participating in large and growing markets.

Today smartphone penetration of the global handset market is only a little over 50%. The smartphone category is expected to grow significantly in the next few years from about 1 billion units per year this year to over 1.7 billion in 2017. And the tablet market is growing at an even faster rate from about 225 million units this year to over 400 million in 2017. Apple is continuing to invest in R&D and distribution, expanding its geographic coverage and building upon a phenomenal, but still very young retail store presence.

Revenue for the quarter was $37.5 billion, up $1.5 billion or 4% from the year-ago quarter, and slightly above the high end of the guidance range. Gross margin was 37% at the high end of the company’s guidance range, and operating margin was $10 billion, representing 26.8% of revenue. Net income was $7.5 billion translating to diluted earnings per share of $8.26.

Dividends:

The company paid $2.8 billion in dividends in the quarter and executed an additional $5 billion in repurchases up 10.4 million shares of Apple stock during the quarter. This brings to a cumulative total of $36 billion in payments for dividends and share repurchases over the last five quarters of which share buybacks were $23 billion.

This has resulted in cumulative retirement of almost 47 million shares and represents 5% of the total shares outstanding prior to the launch of the company’s repurchase program. More than 44 million of these shares have been retired in the past two quarters alone. Board of Directors has declared a dividend of $3.05 for common share payable on November 14, 2013 to shareholders of record on November 11, 2013.

Outlook:

The company anticipates that the additional deferral per device sold coupled with its sequentially greater unit volume expectations in the December quarter will result in about a $900 million sequential increase in the net amount of revenue deferred for software upgrade rights and non-software services.

In total, Apple expects revenue to be between $55 billion and $58 billion compared to $54.5 billion in the year ago quarter and expects gross margins to be between 36.5% and 37.5% reflecting approximately a $105 million related to stock-based compensation expense. The company expects OpEx to be between $4.4 billion and $4.5 billion including about $585 million related to stock-based compensation expense and expects OI&E to be about $200 million and the tax rate to be about 26.25%.

  

Results by Segments

iPhone:

The company sold 33.8 million iPhones compared to 26.9 million in the year-ago quarter, an increase of 6.9 million or 26% and a new September quarter record. iPhone sales were ahead of company’s expectations and grew stronger year-over-year in each of its geographic segments.

iPhone sales remain very robust in the U.S with comScore estimating that Apple was the leading smartphone manufacturer with a 40.7% smartphone subscribership for the three months ending in August.

The company exited the quarter with about 14.3 million total iPhones in channel inventory, which represented a sequential increase of 3.3 million from the June quarter and placed at the low end of its target range of 4 to 6 weeks of iPhone channel inventory on a look forward basis.

Based on the most recently published research, ChangeWave measured a 96% customer satisfaction rate among iPhone users and Kantar measured a 92% customer loyalty rate, significantly higher than the competition. And Apple believes that a great customer experience translates to much higher usage. In fact, Experian reported that iPhone users spend an average of 53% more time each day on their phone than android phone users.

iPad:

Apple sold 14.1 million iPads during the quarter compared to 14 million in the year-ago quarter. iPad sales exceeded the company’s expectations in the September quarter as the company approached its new product introductions. iPad sell-through was roughly equal to sell-in, so Apple exited the quarter with about 4.1 million units of iPad channel inventory within target range of four to six weeks on a look-back basis.

In an August survey by ChangeWave, consumers who intend to purchase tablets within 90 days, 55% indicated they find the purchase of iPads more than four times the rate of the next most popular alternative. And of those who already own iPads, the survey measured a 99% customer satisfaction rate. The momentum of iOS devices in enterprise also remains incredibly strong.

In its latest Mobility Index Report, Good Technology indicated that the iOS platform accounted for 95% of enterprise mobile app activations and 72% of all mobile device activations in the September quarter while iPad accounted for 90% of total tablet activations.

Mac:

Sales with 4.6 million Macs were above the company’s expectations, which is a 7% decline from the year-ago quarter. IDC estimates that the global personal computer market contracted by 10% during the September quarter indicating that Macs continues to gain share just as they have with 29 of the last 30 quarters.

In late September, the company updated iMac with fourth generation Intel quad-core processors, new graphics, next generation Wi-Fi and faster PCIe flash storage options. Last week Apple launched new versions of MacBook Pro with retina display featuring fourth generation Intel core processors, faster graphics, long rate battery life and a more affordable price.

Also last week the company launched Mavericks, the 10th major release of OS X with more than 200 new features. Mavericks brings iBooks and Maps to the Mac, includes the new version Safari, enhances multi-display support, introduces Finder Tabs and Tags and delivers core technologies for breakthrough power efficiency and performance and is now free. Apple ended the quarter with Mac channel inventory that was just below its four to five week target range.

iTunes Software and Services:

The management continues to be very pleased with the growth of iTunes software and services in the strength of the Apple ecosystem. iTunes Stores generated record billings of $4.4 billion in the September quarter thanks to continued strong growth in sales of apps. The quarter's iTunes billings translated quarterly iTunes revenue $2.4 billion, up 15% from the year-ago quarter. The strong iTunes sales combined with other software and service revenue resulted in total quarterly revenue 4.3 billion from iTunes software and services, an increase of 22% year-over-year.

Cumulative app downloads have reached 60 billion and app developers have now earned 13 billion from sales to the App Store, half of which they've earned in the last year. The company had a tremendously successful launch of iOS 7 last month with hundreds of millions of downloads in the first few days alone, making it the fastest software upgrade ever.

Apple Retail Stores:

The revenue for the quarter was 4.5 billion, up 6% from the year-ago quarter. The storage produced very strong iPhone sales with unit growth of 36% per store per week compared to the September quarter last year. The company completed the remodels of two stores and opened eight new stores during the quarter ending with a total of 416 stores including 162 outside the United States. The management is projecting a total of approximately 30 new store openings in fiscal year '14, about two-thirds of which will be outside U.S.

The company also plans to remodel about 20 stores over the course of fiscal year '14. With an average of 411 stores opened in the September quarter, average revenue per store was 10.9 million compared to 11.2 million in the year-ago quarter. Retail segment income was 709 million.

The company hosted 99 million visitors to stores during the quarter which translates to 18,500 visitors per store per week. Operating expenses were 3.8 billion and included 467 million in stock-based compensation expense. OI&E was 113 million and the tax rate for the quarter was 25.9%.

iPhone 5s Fingerprint Scanner Hacked

Yet another flaw in the iOS 7. A German group called Chaos Computer Club claims that the finger print ID on the iPhone 5S can be hacked. They have shown this demonstration through a video. If this proves to be true, then it would be a security concern for over a million people who own iPhone 5S. 

They have mentioned in their blog, the group says that their biometric team took a fingerprint of the user, photographed from a glass surface and then created a fake fingerprint which could be used with a real finger to unlock the phone.  They have supported their claim with a video which shows that after repeated failed attempts, the guy uses a thin film of the finger print and unlocks the phone with it.

Though physical access to the phone is required and also a clean fingerprint, but it still does increase the risk of security breach. Though the fingerprint sensor is a very cool addition to the newest version of the iPhone, an important question that arises, Is Apple sacrificing its most important factor, security, to catch up with the plethora of features being introduced by its rival Android phones?

This is the third time in less than a week of its release, that we are seeing flaws in Apple’s latest iOS 7. It started with the flaw that was found in the control center. The second was a bug that was reported wherein the emergency call screen could be used to call any number and now this; Apple Inc. is still to respond to the Touch ID observations and I am eagerly waiting for their reply.

This is only the first week of iOS 7 and we are already seeing three major flaws, can’t wait to see what happens in the coming weeks. An apple update would probably fix the first two issues. But the Touch ID is a hole in the security feature and this flaw will create concerns for businessmen who keep sensitive data on their phone.

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Apple iPhone 5S & 5C

iPhone 5S & 5C

It is that time of the year again, the time when Apple introduces their new iPhone 5S and we are all waiting excitedly for the launch of the next iPhone. All the rumors about the iPhone Event seem to be somehow have been true. Yes, we do have iPhone coming in two variants now, the iPhone 5S and the iPhone 5C. Let’s look at some of the highlights from this year’s Apple’s iPhone event.

1.  iOS 7: Tim Cook started off the event by talking about the iOS 7. iOS 7 will be available in all the new iOS devices, and all iPhones after the iPhone 4, Second Gen iPad or newer, iPad Mini and also Fifth Gen iPod Touch. Tim cook also enlightened us that Apple will be shipping its 700^th million iOS device next month. iOS 7 features were the same that we have seen earlier in the year at WWDC, so no need to get into the details of those.

2. iPhone 5C: Yes, it’s true, and for all the jealous iPhone haters out there, the C stands for Color, not Cheap. The iPhone 5C will have the same hardware as the one we have seen in the iPhone 5, only with an upgraded bigger battery on the iPhone 5C.

(i.)       The iPhone 5C comes in five vibrant colors, green, white, blue, yellow and pink. Though it is made out of plastic, it looks stunning.

(ii.)      The iPhone 5C comes with Apple’s A6 processor and 4 inch Retina Display, same as the one seen on the iPhone 5.

(iii.)     The camera for the iPhone 5C will be a 8MP snapper with BSI sensor, and the front camera will be 1.9 ultra pixels which will be able to record 1080p videos effortlessly.

(iv.)     The iPhone 5C will come in 16/32/64 GB variants, priced at $99, $199 and $299 respectively for a two-year contract.

(v.)      The iPhone 5C will be available for pre-order in the U.S. as early as September 13, and around the world at September 20.

3. iPhone 5S: This year’s iPhone 5S comes with a new processor, A7  SoC chipset with a 64-bit architecture. This is the first smartphone to come up with a 640-bit architecture. Nobody saw this coming; I am surprised as I did not think that Apple would change the processor on the 5S. The A7 chip is twice as fast as the A6 chip. The iOS 7 has been restructured for the 64-bit architecture, but 32-bit apps will run just fine.

·  Also the iPhone 5S will come in three different colors, black, grey and gold, something that was rumored earlier.

·  The Graphics on the iPhone 5S has also been upgraded to OpenGL ES 3.0.

·  Along with Apple’s A7 chip, you also have the M7 chip on board, which handles data from the accelerometer, compass and other sensors. The M7 chip is used to track your moves, so something like the fitness apps will have more of an accurate measurement than before.

·   The battery also seemed to have been bumped up from before. You will find the details regarding the battery on the snapshot.

Camera: This is something that we have been looking forward to. After looking at some excellent camera phones from the competition, Apple just had to upgrade their camera. We’re still not sure how many Mega Pixels the iPhone 5S camera has, but we know that they have changed the sensors. The sensors on the camera are 15% larger, which would mean more light. The camera also comes with dual-LED flash, along with the sensors and the dual-LED; get ready for some amazing low-light photography.

Also the iPhone 5S takes several shots and pick the best one for you, I’m sure we have heard this before, not sure if it has been patented.  The camera can take 120 fps slow motion video at 720p recording. The Apple iPhone 5S is certainly one of the best camera phones out in the market and I cannot wait to get my hands-on the phone’s camera.

Fingerprint Sensor: Just as we thought that the event was about to be concluded, the rumors have come true once again, the iPhone 5S does come with a fingerprint sensor which has been embedded on the home button. It is called the Touch ID Sensor. It scans the sub-epidermal skin layers. You can unlock your phone with the fingerprint sensor and also set it as the password for iTunes. Finally, after a long time, we see Apple come up with something innovative.

The iPhone 5S will be available in 3 models, 16/32/64 GB priced at a healthy $199/$299/$399 respectively. Also now, the iPhone 4S is free on contract. The Iphone 5S will be available on September 20 in the U.S. and around the world.

Though there are not many revolutionary upgrades to the iPhone 5S, I still think that Apple has managed to do well with their iPhone 5S version, fingerprint scanner, a faster processor, the camera and iOS 7 are the key highlights of this year’s iPhone 5S.

Please leave a comment for your feedbacks and suggestions.    

Samsung Galaxy Note 3 has arrived

Samsung Galaxy Note 3 Features 

Samsung has finally unveiled the Galaxy Note 3 to the world today at their Unpacked Event at IFA in Berlin. Amidst a ton of speculations and rumors, we finally have a look at the much awaited Samsung Galaxy Note 3.

First let’s take a look at some of the hardware specifications:

1.     Compared to the previous version of the Note, the Note 3 has more squared corners than the rounded corners we saw on the Note 2. The Note 3 weighs in at 168 gms and much like the Samsung Galaxy S4, it has a thin metallic bezel surrounding the four sides of the phone.

2.     The galaxy note 3 comes with a 5.7 inch 1080p SUPER AMOLED Display. We have all seen the 1080p on the S4, but with a 5.7 screen, we are in for a visual treat from Samsung. Also as we had speculated in our earlier article Samsung has managed to keep the width of the Note 3 same as the Note 2, while increasing the size of the screen at the same time. Another great piece of design engineering from Samsung.

3.     The processors as we had predicted earlier are the 2.3 GHz quad core snapdragon 800 processor for the U.S. version of the Note 3 and for the International version we have the supercharged 1.9 GHz Exynos 5 Octa-core processor.

4.     Samsung have also pumped up the battery for the Note 3 with 3200 mAh battery. Because of the stunning SUPER AMOLED 1080p screen, and the Octa-core processor, a large battery was inevitable and Samsung guarantees video playback of upto 13 hrs, almost 4 hrs more than its predecessor, the Galaxy Note 2.

5.     The Note 3 comes with a 13 Mega Pixel back camera and a 1.9 MP front facing camera. Also Samsung has introduced the 4K recording in their camera, alongwith a HIGH CRI LED flash which produces more light than its predecessor. They have also made changes to the audio with the Introduction of UHQA (Ultra High Quality Audio) which promises to play high quality audio of 24 bit at 192 KHz.

6.     Also squatting earlier rumors of 2.5 GB of RAM, the Note 3 comes with 3 GB RAM to power your device. The Samsung Galaxy Note 3 comes in three colors, the Classic White, Jet Black and Blush Pink. After a little hands-on, I have to say the Jet Black looks absolutely amazing.

7.     Also Samsung is promising to introduce a lot of accessories, like the S-view cover, with a bigger view, the flip covers in more than 8 colors and it has been designed by Moschino and Nicholos Kirkwood.   

The Note 3 will be available in the U.S. and Japan in early October and for the rest of the world, they can get their hands on this amazing piece of device as early as the end of September.

Now for some of the software features of the Samsung Galaxy Note 3:

1.     Though there is not a tremendous change in software as compared to the S4, there are some software tweaks that I would like to discuss. The Note 3 as I had mentioned in the earlier article have designed the software according to the implementation of the S-pen. The S-pen is more smarter than ever, apart from recognizing handwriting and symbols, it also remembers if you had written something down earlier and forgot to save it.

2.     Air Command: While hovering the stylus over the screen, you will notice a small dot and if you click on the dot, a pop-up will appear letting you access 5 commands which you can perform quickly, like taking down notes, etc. it can be accessed from anywhere, anytime on the screen.

3.     Action Memo: this S-pen feature will allow you to store notes and numbers and also automatically save it to Cloud network. You can use the information on the memo and use it for some action, like sharing or saving contacts etc. without personally having to type in a word.

4.     S Finder: something that I have always wanted on my phone. S-finder is something that Microsoft provides in their desktop software’s. In simple words, it is a search tool; it can search keywords from the file or the file name itself and retrieve the information from your phone. Enough of going into My Files each time and searching stuff manually. Something as simple as this, and we have never seen it on any other phone before, very helpful tool.

5.     Advanced Multitasking: if you were impressed with the multitasking feature on the previous version of the Note, get ready to be blown away because this time you can open the same app on two different windows. It can be used while chatting simultaneously with two different people. Super Cool!!

6.     Scrapbook: The scrapbook is as it seemed on first look as Samsung’s reply to the HTC Zoe that we saw on the HTC One. In the Scrapbook introduced by Samsung, you can store your images, videos, and web content, everything in an organized and collective manner. It looks and feels like Samsung version of the Flipboard and HTC Zoe all integrated into one.

7.     Multi-Vision: This is what I love about Samsung; they put everything out on the table. If you thought Group Play was an original concept and connecting different S4 handsets and converting it into a surround system was too much, think again. In Multi-Vision, using Group Play, you can connect two or more than two screen and convert it into one large screen. Though it sounds gimmicky and not something that we would use a lot, but How Cool is that?

With some amazing software upgrades, the Samsung Galaxy Note 3 has surely set the bar high for the likes of HTC, Sony, LG who are also due to announce their Phablets at IFA. Also with so many upgrades to the Note 3, should Apple be worried with its iPhone launch just later in the month? Will Note 3 eat Apple’s share of the pie yet again?

  

Keep reading ViralBond for more articles on IFA 2013. I will write a full hands-on and review article of the Samsung Galaxy Note 3 later on. Please like and Subscribe to our Blog and follow us on Google Plus.

Please leave a comment for suggestions and feedbacks.

Carl Icahn's recent exploits

The recent news of Mr. Carl Icahn placing his big bet on Apple Inc. was something we couldn’t afford to miss, and while we sit tight thinking that any day Mr. Icahn may send out a tweet about firing one of the key personnel of Apple, I personally feel that this time, it’s going to take time for the Investor Activist, as he likes to call himself, to turn Apple management’s world upside down. The only reason I believe for the delay is because he is presently busy in giving Michael Dell, CEO of Dell Inc. a tough time.

Michael Dell did not foresee Carl Icahn’s arrival, not even in his weirdest dreams and I bet at this point in time, he wished he had a crystal ball. Now if I were to take a firm like Dell private, it would definitely create a buzz, and on top of it, if I were to underpay my stockholders for every share they owned, I would definitely be expecting a Carl-o-storm.

So what could possibly be driving Mr. Icahn to always be upping his game? While many people would conveniently say that he is money driven, I’d beg to differ. I feel that he wants to be known today the same he used to be in the past, a Corporate Raider (can be one of the few names). That’s the only thing he has been doing, a thing which he is undoubtedly good at. He might have no doubt started off as being money driven, but I feel he is now more pleasure driven, for lack of a better word.

He would always want to be remembered as a nightmare for the company executives who sit on huge salaries, great bonuses and are unable to deliver value to their shareholders. Who knows, he may even retire after his Apple gig, but I seriously wouldn’t want that. I would love to see what he can get delivered from the already delivering Google Inc., or even Microsoft; in case he intends to retire in his late 80’s.

Since only Carl Icahn can tell what’s up his sleeve and on his mind, there’s no point in brainstorming or wasting time, predicting his next move. I suggest let’s just sit back and enjoy our drinks because the Master is in no hurry.