Apple Q2 Earnings Report: The Aftermath

v-1.pngWe don’t cover earnings reports that much simply because the news sequestered therein is usually geared more towards the folks who get paid $100K to cover earnings reports, a stalwart band to which we do not belong.

That said, here goes: Apple sold 1,517,000 computers (36 percent more than last year’s Q2) and 10,549,000 iPods this quarter (24 percent growth). They saw revenue of $5.26 billion with a quarterly profit if $770 million. What does this mean? It means you should have bought Apple stock last Friday.

It also means that Apple is at a crucial point in the game. Apple is currently stagnant. They have two best-selling lines, the iPod and the Macintel, but only the iPhone can pop them up to that next level of profitability and, presumably, cool-gadget-that-we-want-to-ownability.

Apple TV and its ilk are currently too young to count in that mix and they need another break-out product, even with profits and revenue as high as they are. The iPod juggernaut will not be stopped, but the laptop and PC markets are traditionally quite unforgiving. There are laptops out there selling for $399, so a pretty OS and a magnetic power adapter won’t cut it anymore.

What’s my prediction? Apple stock price will hit about 150 when the iPhone launches to great fanfare. It will precipitously drop near the end of the summer as the first reviews roll in describing it as “a cool phone.” Then what? They will shore up the iPod line with touch- and widescreen models and try to hang on to high desktop and laptop sales as iPhone owners start flocking to the Apple store for accessories and, more importantly, compatible hardware.

Like so many bloggers, almost all of us at CG love Apple. The company rarely shares that love with us, embargoing stuff until 5 seconds before launch and treating the press like animals unfit to sup at the PR troughs of Cupertino, but I’m not bitter. They capture the imagination like few companies are able and are fodder for such flights of fancy that we can’t help but be swept up. This latest announcement vindicates our love — Mac is getting it’s market share.

Apple Reports Second Quarter Results [PRNewswire]