Thoughts on WWDC 2011 keynote

Apple began their annual developer conference yesterday and held a keynote where they previewed OS X 10.7, iOS 5 and iCloud cloud service offering. Overall the keynote was not that exciting with no new hardware, no information on the next smartphone hardware, iOS release months away just like the iCloud service that was presented like it would replace google apps and definitely did not live up to my expectations, but it being free helps. Upgrading to 10.7 will be a no-brainer come this July and I’ll appreciate wifi-sync, notifications, and some of the cloud services especially if Microsoft would decide to build a proper office version for the iPad with iCloud integration assuming the APIs allow for this. But nothing here will stifle Android’s rise, which appears rather pronounced considering HTC’s announcement that they more than doubled May sales.

WWDC Preview

Apple is holding their annual worldwide developers conference next Monday and yesterday they came clean about the fact that they will be introducing Mac OS X Lion, iOS 5 and most importantly the previously unannounced iCloud cloud service.

Mac OS X new features are mostly known as Apple has previewed it already and seeded builds for developers. There is plenty to like about although I am not in agreement over the iPadification of the OS. Though this is probably smart on Apple’s behalf as they are trying to turn the iOS user base into Mac user base.

iOS 5 is more covered in secrecy. There are rumors about system wide voice recognition and further cloud service integration, but mostly its under wraps. The release is actually rather interesting as thus far Apple has been building features that are more or less catching up with what Symbian was capable of or simply obvious to average customers. This time we will see just what Apple has come up with when they are leading the industry development.

iCloud service might be the most interesting part of the event. At this point we know the name, the fact that it will most likely replace MobileMe and that Apple has been hunting streaming licenses for music and possibly movies and tv shows from the usual suspects. I am not really interested in the music part and knowing movie studios it will take quite a bit of time before we will be seeing anything outside US. I hope the service is not Apple’s give us all your personal information scheme and I am hoping to see Apple adopt a stricter privacy policy, but I am not holding my breath as that very thing went from bad to worse just a while ago with Apple tracking your location “anonymously”.

We’ll see on Monday.

The smartphone race and Microsoft’s Mango update

On 19th of May Gartner released their quarterly report on the state of the mobile phone market. Here’s the press release.

The smartphone front looks like this as of Q1:


Android has had a phenomenal success over the last year going from 9.6 per cent market share to 36 per cent currently. It is starting to seem like Android is forming into another Windows. Symbian has gone to the other direction losing 17 percentage points. In total the smartphone market has doubled over the last year, which is frankly the only thing that has kept Symbian and Nokia barely profitable. But the really interesting part of the market is Microsoft and their new Windows Phone platform, which is going to get its first major update later this year. 3.6 million devices shipped with a Microsoft OS, though only 1.6 million of these were those new WP7 devices according to Gartner. I have discussed Microsoft’s ventures here.

I personally like the Windows Phone UI and the whole concept, but as I stated before they were late to the game and made some mistakes in their execution. Plus, everyday they are giving more advantage to Android and iOS. The fact that they only shipped 1.6 million WP7 devices against Apple’s 17 million and 36 million Androids spells, if not doom for the platform, then at least serious problems for Nokia. The platform will not get any boost from latest generation hardware this quarter and future seems murky at least when compared to the already shipping latest generation Androids. I expect the platform’s market share to drop further although some Symbian shoppers may have jumped ship.

The WP7 platform’s current state seems very problematic for Nokia who is supposed to go all in next year with Microsoft. It is not going to be easy to start with a platform that is closing in on zero in terms of market share while one’s own Symbian is doing the same. Android should be benefiting from this and I expect its market share to grow steadily in the next two quarters especially as the next iPhone is rumored to ship only after summer.

Microsoft today showed of its Mango or 7.1 update for the Windows Phone platform. See here Engadget’s liveblog from the event. Overall it seems like a very solid package for .1 update and will bring the OS closer to feature parity with its closest competitors, but the key take-away from the event is that there is not going to be new hardware or software until this fall. Moreover, Nokia states that this is the version that their first WP device will use raising the expectations that they will actually ship something for the holiday quarter.

Disclosure: I am a Mac/iPad/iPhone user

Some thoughts on the tablet market

Introduction

While tablets (or whatever you want to call them) have existed for a long time both in the current iPad form factor of varying sizes and in the convertible PC tablet form factor, the market for them was arguably created by Apple roughly a year ago when Apple introduced the iPad. The story goes that Apple had been developing this product for a long-time and iOS operating system and graphical user interface were initially thought for iPad-like device and only later Apple realized they could make a smartphone out of it.

After the launch we have seen competitors flock the market space with similar products led by Samsung in late 2010 alongside several Chinese cheap-manufacturers. The second generation of products has now started to ship all over the world with Apple leading the industry with the iPad 2.

Continue reading

AAPL results are in, net income $5.99 billion, up 95 per cent, INTC also breaks records

Apple today reported its Q2 earnings and net income came in at $5.99 billion, an increase of 95 per cent year-over-year. EPS $6.40. Revenues were up by 83 per cent to $24.67 billion. Very positive report. iPhone units higher than what I expected, iPad units less. Overall product line sales volumes were as follows:

  • Macs: 3.76 million, 28 per cent growth
  • iPods: 9.02 million, 17 per cent growth
  • iPhones: 18.65 million, 113 per cent growth
  • iPads: 4.69 million

Apple easily beat its own expectations. This is what Apple said at the end Q1 about their expectations.

Looking ahead to the second fiscal quarter of 2011, we expect revenue of about $22 billion and we expect diluted earnings per share of about $4.90.

Other figures of interest:

  • Gross margin: 41.4 per cent, down from 41.7
  • Operating cash flow: $6.2 billion
  • Cash: $65.8 billion
  • International revenue share: 59 per cent
  • Asia-Pacific revenue growth: 151 per cent

For its part, Intel reported record EPS and revenues earlier posting $12.8 billion in revenues and a net income of $3.2 billion, up 25 and 28 per cent year-over-year, respectively. Gross margin was down 2 percentage points to 61. Revenue were up across the board and ASP for microprocessors was up as well probably due to Sandy Bridge launches. PC Client Group revenue was up 17 per cent relieving some doubts about Intel’s fate as ARM chips rule the mobile space. For what its worth, Intel did say they were in process of making Android and Intel chips compatible.

Apple and Intel aren’t exactly the best companies to judge the overall economy due to their monopolist market position and nature, but at least increasing revenues tell something positive about the economy.

Follow

Get every new post delivered to your Inbox.