Apple released its Q2 results this afternoon after the markets closed. It was another great quarter. Summary:
You can read their full earnings report here.
In after hours trading, Apple is up $43, to 604.
Disclosure: I am long AAPL.
As it turns out, almost anything.
Chitika offers a very interesting chart comparing the mobile data usage of Apple’s iOS devices and Android devices in the US. iOS traffic consistently exceeds Android. Could be because iOS is a more elegant or useful platform, given that there are more Android devices in the field and iOS in the United States.
Since [Apple] rolled out the iPhone in 2007, its P/E has shrunk, notes Horace Dediu, a former telecom analyst at Nokia and founder of Asymco, a data-analysis firm in Helsinki. In 2007, Apple’s P/E based on the next 12 months of earnings was about 30; now it is about 12.8, compared with the S&P 500′s average of 12.5.
During that same period, Apple’s stock price has soared sevenfold—but its profits have increased by 1,200%.
One reason why Apple’s P/E is so reasonable, experts say, is that the technology sector is especially fickle, and investors are unsure of future profits. “This is a technology company in a world where technology changes quickly,” says John Goltermann, a portfolio manager at Obermeyer Asset Management in Aspen, Colo. “Now, it’s the incumbent, but that’s not necessarily going to be the case forever.”
– Wall Street Journal. No one can predict the future value of Apple, and Apple’s fiscal year 2012 second quarter earnings will be announced next Tuesday after the markets close.
Disclosure: I am long AAPL.
According to Verizon, the company sold 6.3 million smartphones in the first quarter of 2012. Of those sales, 3.2 million were iPhones, and 3.1 million were other smartphones. So, at least at Verizon, the iPhone outsold all the Android phones combined.
This is interesting in that the current iPhones do not support LTE, the high-speed wireless data technology that Android manufacturers tout as a major feature. It seems that the attractiveness of the iPhone without LTE is enough to beat out Android with LTE.
And the next iPhone will likely add LTE functionality.
Disclosure: I am long AAPL.
Yesterday, Greenpeace released a report titled How Green Is Your Cloud. In the report, Greenpeace claimed that Apple’s North Carolina datacenter was using 100 megawatts of power, and it downplayed Apple’s 20 megawatt solar array and 5 megawatt biogas facilities at the datacenter.
This is probably no surprise, but Greenpeace’s estimates were wildly off-base. Apple released a statement gutting the claims:
Our data center in North Carolina will draw about 20 megawatts at full capacity, and we are on track to supply more than 60% of that power on-site from renewable sources including a solar farm and fuel cell installation which will each be the largest of their kind in the country. We believe this industry-leading project will make Maiden [North Carolina] the greenest data center ever built, and it will be joined next year by our new facility in Oregon running on 100% renewable energy.
So it appears that Greenpeace overstated the total power use at the facility by a factor of five.
Disclosure: I am long AAPL.
(via The Loop)
Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open… Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90 percent to roughly 60 percent… Brick-and-mortar bookstores are starting to compete through their partnership with Google, so loyal customers can buy e-books from them at the same price as they would from Amazon. Direct-selling authors have also benefited, as Amazon more than doubled its royalty rates in the face of competition… The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.
– Scott Turow, president of the Authors Guild.
The best analysis I have found is at The Verge. You can read the complaint here. Apple is apparently willing to fight this out in court, even though several publishers have settled with the DOJ.
How are Apple’s competitors doing in terms of disclosing or reducing worker abuse at their plants in China?
None too well, according Nick Bilton in the New York Times.
Over the past week I have asked Hewlett-Packard, Samsung, Microsoft, Dell, Amazon, Barnes & Noble and Lenovo about their reports on labor conditions. Many, if not all, of these electronics makers also use Foxconn.
Most responded with a boilerplate public relations message. Some didn’t even respond. The answer from Barnes & Noble, the maker of the Nook e-reader, was typical. Mary Ellen Keating, a senior vice president, said only, “We don’t comment on our supply chain vendors.” Ms. Keating wouldn’t say why Barnes & Noble does not discuss its manufacturing.
Lenovo e-mailed an off-topic report on sustainability.
Samsung, which sells far more cellphones than Apples does, gave no response.
Although some technology companies share some information about their audits, none go into detail about the violations they find or what they are doing to fix problems.
“When violations exist, they don’t follow up nearly as well as Apple does,” said Li Qiang, executive director of China Labor Watch, which monitors and investigates labor conditions in China.
Disclosure: I am long AAPL.
What are the most popular cellphones for photos on Flickr? C’mon guess.
Yes, you are right. Flickr’s most popular cellphone cameras are, in order, the iPhone 4, iPhone 4S, iPhone 3G and the iPhone 3GS.
Android is winning.
(via Daring Fireball)
Disclosure: I am long AAPL.
82% of the users of the new iPad are “very satisfied.” This is even higher than for the users of the prior iPad 2.
Disclosure: I am long AAPL.
The Fair Labor Association has released its report on the treatment of workers at Foxconn‘s plants in mainland China. The major conclusion of the report is that the workers are putting in too many hours on the job. The FLA concludes that worker hours should be limited to 49 hours per week, including overtime, which is the maximum number of hours allowable under Chinese law. [They will not suffer a pay reduction as a result of less hours.] Apparently, there is no local enforcement mechanism for such limitation in China, and pressure from Apple was necessary to get Foxconn to agree to take this action. [As an aside, have any of the other manufacturers who subcontract to Foxconn taken any action regarding worker protections?]
Of course, it is not clear that most workers at Foxconn’s plants want fewer hours. The report indicates that over a third of the workers want to work for longer hours and only 18% said they felt they were being overworked. For example:
“We are here to work and not to play, so our income is very important,” said Chen Yamei, 25, a Foxconn worker from Hunan who said she had worked at the factory for four years.
“We have just been told that we can only work a maximum of 36 hours a month of overtime. I tell you, a lot of us are unhappy with this. We think that 60 hours of overtime a month would be reasonable and that 36 hours would be too little,” she added. Chen said she now earned a bit over 4,000 yuan a month ($634).
Keep in mind that many Americans routinely work more than 49 hours per week, in order to earn additional funds from overtime.
Finally, from the FLA report, comes this good news:
Our assessments did not find issues related to child labor, forced labor or payment of the legal minimum wage.
Update: The New York Times reports today that there are significant shortages factory labor in China and that this, in part, accounts for high levels of overtime. The article also describes the desire of some in the existing work force to work more hours, not less.
In interviews with The New York Times over the last several years, workers at other factories in southeastern China have frequently said that they wanted long hours because they were young, had little to do during free time in their factory dormitories and were eager to make as much money as quickly as possible so as to return to their home villages.
When China imposed its current laws limiting overtime four years ago, the regulations set off considerable complaints from workers and companies alike. There is a limit of three hours a day of overtime and six days of work a week.
“The law is very restrictive about what it allows,” a foreign businessman in southeastern China said Friday. He insisted on anonymity lest his comments be construed as criticism of the government or of labor advocates. Labor laws in the United States are actually less restrictive, in some ways, in allowing workers to put in even longer hours than in China. Generally speaking, as long as American workers receive time and a half pay for anything over 40 hours a week, there are no limits on total hours.
A new survey by CNBC shows that half of all US households own at least one Apple product. (You can watch a CNBC video on this survey here.)
That is an amazing statistic in and of itself. But the real advantage to Apple is the consistently high ratings that users give the Apple products they purchase. A taste of Apple design and functionality very, very often leads a consumer to buy more Apple products. This characteristic of Apple products even has a name: the “halo effect.” And more Apple products connect to each other and function together, further encouraging additional purchases.
And the half of all US homes currently without any Apple products is a huge reservoir of future growth.
Disclosure: I am long AAPL.
