2008 in review: Apple

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The last 12 months have been very good for Apple, perhaps some of the most significant in the company’s history. From the high-flying iPhone to record sales of the Mac and strong financial results, 2008 was a year of success for Apple.

The iPhone makes its mark

When Apple reported its first quarter results in January, the company left no doubt that the iPhone was a consumer success. More than 2.3 million iPhones were sold in the previous three months—and that was the first generation iPhone, not the faster iPhone 3G. In the last fiscal quarter of the year, iPhone sales were 6.8 million.

Perhaps the most significant announcement surrounding the iPhone in 2008 was the release of the Software Development Kit (SDK) and the App Store. Using the SDK, Apple would allow third-party developers to make applications and sell them on Apple’s store.

While everyone thought the App Store would be successful, nobody could fathom the tremendous impact the store would have in the coming months. It started off with 500 apps, but by December, the App Store had more than 10,000 applications and customers had downloaded more than 300 million apps.

Apple also met its goal of selling 10 million iPhones by the end of 2008 three months early, as demand for the device continued to grow.

Apple is rolling in money

How about these for numbers: $1.58 billion, $1.05 billion, $1.07 billion, and $1.14 billion. Those are the quarterly earnings Apple reported for fiscal year 2008.

During the fourth quarter conference call, Apple CEO Steve Jobs said the company had $25 billion in cash and no debt. However, the company’s stock the day Apple reported its fourth quarter results was trading at $91.49, a far cry from the $155.64 it was trading at during the first quarter results.

Mac sales continue to grow

I remember when Mac sales were counted in the hundreds of thousands per quarter, not millions. In the first quarter of 2008 Apple shipped 2.3 million Macs, up 44 percent over the same quarter in 2007; the second quarter was up 51 percent at 2.2 million; in the third quarter, Apple shipped 2.4 million, up 41 percent; and in the fourth quarter Apple 2.6 million Macs, up 21 percent.

That’s pretty incredible growth, no matter how you look at it.

Apple’s notebooks received the majority of attention in 2008. The MacBook line was updated in February and again in October with faster processors and upgraded graphics. The company also introduced the MacBook Air in January, which appealed to executive-type users who wanted a lightweight Mac for traveling.

The Mac Pro was updated early in the year and hasn’t been updated since. The Mac mini didn’t even do that well—it hasn’t been updated since 2006. The iMac saw its only update of the year in late April.

The lack of updates began to show by the end of the year as analysts said the older machines were in “need of a refresh.”

However, research throughout the year clearly showed Apple was onto something really good with its notebooks. According to market-research firm NPD Group, Apple’s U.S. retail notebook market share for June 2007 was 17.6 percent, an increase of 2.2 percentage points over the same period last year, when Apple posted a 15.4 percent market share.

Research from IDC (a subsidiary of IDG, which also owns Mac Publishing and Macworld) showed that Apple’s continued rise in computer sales put it in third place overall among all computer makers in the U.S. This is the first time since 1996 that Apple finds itself this high on the list of top-selling manufacturers.

iPod and iTunes continue to grow

You can’t look at Apple these days without factoring in the success of the iPod and iTunes. 2008 was a big year for both products.

By April, Apple claimed the top music retailer spot in the U.S. It even beat out Wal-Mart, which is a difficult thing to do when you look at consumer spending.

In total, customers have purchased more than four billion songs from iTunes, which maintains a catalog of more than six million songs.

iTunes also gained movie rentals in 2008, giving users another movie-watching option. In the latter part of the year, Apple brought NBC back to the iTunes Store and released HD TV shows from many of the networks.

Apple also used iTunes as the storefront for the immensely popular App Store for the iPhone. What started off as simple jukebox software years ago had become a giant content-selling machine for Apple by the end of 2008.

Apple released a new iPod touch in early February, but it was at a special event later in the year that the iPod would take center stage. It was then that Apple introduced a new iPod touch and a completely redesigned iPod nano.

In 2008 alone, Apple sold more than 54 million iPods. The iPod continues to be one of Apple’s most successful product introductions in its history.

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