Apple’s Unstoppable Revenues - It is Myth or Real

Apple’s holiday performance showed signs that the company’s not unstoppable in 2008. In particular, Apple’s cautious outlook, weakness in U.S. iPod growth and the unpredictability of iPhone sales left pessimists plenty of reason to doubt.

Apple turned in revenue of $9.6 billion and profit of $1.6 billion for the holiday quarter, blowing past the average analyst estimate. The company shipped a record 2.3 million Intel (INTC)-based Macs during the period, and actually sold as many iPhones as computers. In the process Apple generated $2.7 billion in cash, bringing its war chest to $18.4 billion.

On the conference call with analysts, Chief Financial Officer Peter Oppenheimer admitted that iPod sales merely met the company’s expectations, rather than exceeding them. Part of the reason, he said, was that U.S. iPod sales weakened in December - it took overseas sales to make up the difference. “In the U.S., in the gift-buying season, we saw a slightly different curve, that was made up for in our very, very good growth internationally.” - he said.

It was clear that Apple executives weren’t sure what to make of the iPod slowdown. Maybe it’s the U.S. economy. Maybe the presence of the higher-priced iPod touch convinced people to save up and buy one iPod instead of two, they suggested. And then there’s the possibility that the iPhone is starting to eat into iPod sales. “In the U.S., where iPod unit sales were flat year over year, it could have been one of the factors, but other factors played into that as well, so it is very difficult to say with any precision whether there was cannibalization or not,” - said Chief Operating Officer Tim Cook. Cannibalization would be a bad thing. It would mean that iPhone growth doesn’t purely add to Apple’s results — it also takes away from the iPod.

For this current quarter that will end in March, executives promised revenue of $6.8 billion and earnings of about $850 million. And while ordinarily analysts would take that number with a wink and expect Apple to easily beat it, this year they’re not so sure Apple can.

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Has Apple Forgotten People With Disabilities?

Well, it seems so. At least, Apple has forgotten that there people with ear disabilities out there. When iPhone is held up to a cochlear implant and or a hearing aid it gives out a loud buzzing interference.

Due to this problem, a group representing people with a hearing loss filed complaints with the U.S. Federal Communications Commission last month. The group is accusing Apple Inc. of not making its iPhone compatible with hearing aids.

This complaint may turn pretty expensive for Apple. Results may vary from paying refunds to customers with disabilities to redesigning the device altogether. However, according to documents posted on the FCC's Web site, Apple may not be required to make changes to the iPhone. "Handset manufacturers that offer two or fewer digital wireless handsets in the U.S. need not comply with the hearing aid compatibility compliance obligations," the FCC states.

Photo source: BusinessWeek.com

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