Article From The Sydney Morning Herald:
http://business.smh.com.au/business/recession-be-damned-as-apple-bucks-sales-trend-20090122-7nvo.html
SUMMARY
I found this article from The sydney Morning Herald and it talks about the earnings and sales trend of the famous Apple Inc. While other major electronic corporations (Sony, Fujitsu, etc) are experiencing low income due to the on-going major recession, Apple's profit during the last year has actually exceeded the expections of analysts. In the period ended December 27, 2008, sales has increased by 5.8 percent to $US 10.2 Billion. The first-quarter net income also rose by 1.5 per cent to reach $US 1.61 billion. It is reported that Apple managed to sale 4.36 million Iphones, 22.7 million Ipods, and 2.52 Macs in the quarter, despite that period being the worst US holiday shopping season in the last few decades. Apple also rose to $US 92.70 on the Nasdaq Stock Market recently, which is a significant $US 9.87 increase. Another thing to point out is that the shares fell 57 per cent last year. Analysts claim that Apple is running very successfully while selling huge quantities of its premium quality products. Upon its release, The Iphone has contributed a significant portion of Apple's profit. Analysts states that it is still at an early stage of its cycle and will continue to have more growth in the future. Chief operating officer Timothy Cook denied the rumors about offering a stripped-down version of the Iphone in the future and is has a good feeling about the their competition with other major corporations. Apple Inc is currently running without the management of CEO Steve Jobs, who is on medicare leave and is expected to be back in June.
CONNECTION
The part of the articles that talks about the increase of decrease in net income, sales, and stock shares between different quarters is related to some of the concepts I learned in Chapter 15. Analysts use the trend analysis technique to estimate the earnings and sales of the company in the future. They record and use the major sales and income figures from the past quarters as well as other information they gathered to predict the amount of impact the recession can have on the new figures. After the results are announced, they use comparative financial statements to compare the new figures with those in the past to determine the performance of the company. They also use percentage charts to convert the increase or decrease into percentages for better and easier understanding. Insiders of the company also use comparative financial statements to determine the current status of the company, which will then help them to decide on future plans.
REFLECTION
I was not really surprised when I read that Apple overcame the worst holiday shopping season during the most severe recession since the great depression. I have always thought that Apple is most successful entertainment electronics corporation. The quality of their products is probably somewhere on the top among hundreds of other companies. Their products have really creative features and sleek designs that really distinguish Apple from the other competitive brands. Apple also have great ways to promote and advertise their products, such as the CEO, Steve Jobs holding a conference to unveil new products. The insiders of Apple also make really great decisions to increase the profit. As we know, major Apple products such as Ipods, Macbooks, and the Iphone almost evolve every one or two years. Each time new features and designs are developed to encourage owners of the previous models of the product(s) to buy the new one. There are lots of other strategies Apple uses to stand out in the competitive industry. But just by looking at some of the points listed above, we can see why Apple has the strength to overcome the recession while other companies are suffering from great loss in profit.
3 comments:
Hi Shunzhi
It is quite amazing to find out that Apple has such a high profitability during this recession. I think one thing that makes the business successful is its products. Without any doubt, Apple's products have a very high technonolgy. Not only the functions and its design aslo makes the product very attractive. However, I personally think that the price of its products (like iphone and mac book) are a bit too high. If Apple can fix its price reasonably, its sales will increase a lot more.
Hi Shunzhi!
First, thanks for your comment on my Chapter 15 blog. I appreciate that!
Yeah, I agree with you that some companies overcame the economy depression successfully, and absolutly Apple Inc. will be one of them. Personally, I do not have a lot Apple's products, but most of my friends love Apple's products because they contain high qualities and functions. I also think one of the reason that Apple can run so well during the hard situation is its success maketing management. Before the economy fall so low, they already began to advertise their iphones. And this plan will definitely help them to do well during economy depression although the US has their worst shopping period now. In addition, i think the increasing of their sales and net income will help them operates better since they have more financial bases. Anyway, congratulation to Apple Inc.
LEon Su
HI ShunZhi. I am surprised that apple is still profiting in this quarter. As you know many Electronic Companies
in the world have gone bankruptcy or
not doing too well including Sony,Panasonic and etc. Most of them have drop their product price. Its very vary to see this happening. i mean with the price apple offer, i couldn't imagine they are still making profit and is able to meet the expectation.
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