2010 in review: Apple as a business

Today's Best Tech Deals

Picked by Macworld's Editors

Top Deals On Great Products

Picked by Techconnect's Editors

2010 was a great year for Apple the business. Though we won’t know the results of this holiday season until January, it’s worth taking a look back at Apple’s fantastic fiscal 2010 (which ran from October 1, 2009 through September 30, 2010).

Bottom line: Apple had about as good a year as any business can expect to have. The company recorded $65.2 billion in sales, an increase of 52 percent from the previous year. And profits were up, too: in fiscal 2010, Apple made $14 billion in profit, a 72 percent increase over fiscal 2009. Apple CFO Peter Oppenheimer quite rightly referred to it as “a monumental year for Apple.”

Look at a chart of Apple’s total revenue for its last six fiscal years, and you see a company that’s on a steady upward march, its year-over-year growth slowed only slightly by the global financial crisis and recession that hit during Apple’s 2009 fiscal year.

For the first fiscal quarter of 2011—that’s this current holiday season—Oppenheimer told analysts in October to expect revenue of $23 billion, which would be an increase of 47 percent over the previous year’s holiday quarter, but only a 13 percent increase over the last three months of fiscal 2010. Given Apple’s tendency to be remarkably conservative in its guidance, and given the tendency of Apple’s holiday quarters to improve on the quarter preceding them by between 25 and 50 percent when the economy isn’t imploding all around them, it wouldn’t be surprising for Apple to be at the end of a $30 billion quarter. We'll find out on January 18.

Product lines

This was a great year for both the iPhone and the Mac. In fiscal 2010, Apple sold 13.7 million Macs, by far the most it’s ever sold in a single year. That figure also represented a 31 percent increase in Mac sales from the previous fiscal year. And if you look over the past six years, it becomes clear that Mac sales are growing rapidly.

In the 2010 fiscal year, Apple sold 40 million phones, a 93 percent jump over 2009. During September, the company says it passed the 125 million mark for cumulative iOS sales of its iPhone, iPad, and iPod touch offerings.

Not all of Apple’s product lines are growing. The iPod segment continues to shrink, owing to a saturated MP3-player market. But the iPod’s share of the MP3 player market in the U.S. continues to top 70 percent, according to research firm NPD’s figures. With a new iPod nano and the beefed up iPod touch, the iPod is set up for a strong holiday 2010 quarter.

Overall, Apple is a collection of several different businesses, largely growing, but at different rates. If you plot a chart of total revenues across Apple’s different product lines, it’s apparent that for all the sturm and drang about the Mac’s role at Apple, the Mac business continues to grow in revenue, despite a dip during the recession year of 2009. Other revenue, including software sales and iTunes, is growing at a slower pace, but still growing. And the iPod line, after peaking in fiscal 2008, seems to have flattened out.

The two areas where Apple sees astronomical growth are in the iPhone and iPad lines. In just six months of sales, the iPad came close to eclipsing the iPod and “other revenue” categories. And in just four years, the iPhone’s sales have shot into the stratosphere, accelerating even more in 2010 and passing the $20 billion mark in revenue all on its own.

Apple retail stores

By all accounts, it was a great year for Apple's retail arm. Apple started the fiscal year with 273 stores, and finished it with 317, including 84 outside of the United States. Among the new showcase stores opened during the year were ones in Louvre in Paris, on New York’s Upper West Side, and in Beijing and Shanghai, China. Stores also opened in the UK, Germany, Australia, and Canada.

Look for the company to continue to expand internationally during 2011. It plans to open 40 to 50 stores during the coming fiscal year, with half of those slated for outside the U.S. The company also plans to start renovating several of its U.S. stores during 2011.

Quarter by quarter

Apple’s fiscal first quarter of 2010, covering the 2009 holiday season, was Apple’s best quarter ever, with sales of $15.68 billion and a profit of $3.38 billion. Apple forecast $11 billion in sales for the second quarter.

Just two days before the introduction of the iPad, Steve Jobs was quoted in a company press release as saying, “The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about.”

Three months later, the company revealed record non-holiday results for its second fiscal quarter, including sales of $13.5 billion and a profit of more than $3 billion. Company executives again credited the iPhone and the Mac for driving Apple performance. Since the iPad didn’t ship until April 3, the second quarter didn’t include any iPad revenue, but execs did mention that they were “shocked” at the level of demand for the iPad. Apple forecast $13 billion in sales for the third quarter.

In July, Apple’s third-quarter results set a company record for revenue, eclipsing the mark previously held by the first quarter of 2010. In the quarter, Apple generated $15.7 billion in sales and a profit of $3.25 billion. Mac sales hit record highs, and the iPad generated $2.17 billion in revenue during its first quarter of life. Apple forecast $18 billion in revenue for the forthcoming fourth quarter.

In October, Apple’s fiscal fourth quarter set yet another record, with $4.31 billion in profit and $20.34 billion in revenue. The numbers were so huge, Apple CEO Steve Jobs sat in on a conference call with analysts. “I couldn’t help dropping by for our first $20 billion quarter,” he said.

Apple will announced its fiscal first-quarter earnings for 2011, covering the holiday season of 2010, in mid-January. And as always, Macworld will be there to bring you the details.

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.
Shop Tech Products at Amazon