Jobs Has Sharp Words for Google and RIM During Apple Earnings Call

By Tracey E. Schelmetic

TMCnet Contributor

 

Yesterday, Apple held its quarterly call on earnings, releasing figures for the company's fourth quarter fiscal year 2010. 

The news was good for Apple: Chief Financial Officer Peter Oppenheimer reported that the company broke the $20 billion mark for a quarter for the first time. "Revenue for the quarter was $20.34 billion, an increase of more than $8.1 billion over the prior September quarter's result, representing growth of 67 percent," said Oppenheimer. "The very strong growth was fueled primarily by record iPhone (News - Alert) sales, the tremendous popularity of iPad and our best Mac quarter ever."

The company reported a net income of $4.31 billion, which exceeded the company's previous quarterly earnings record by $930 million and translated to 70 percent growth over the same quarter last year. The results translated to earnings per share of $4.64. 

From a product sales perspective, there was good news almost all around. The company set a new quarterly record for sales of Macs, selling almost 3.9 million of their desktop and laptop computers. This translates to 27 percent year-over-year growth and is more than double IDC's predictions of 11 percent growth. The company's iTunes Store also had another strong quarter with revenue over $1 billion. The sales of iPods were slightly off from last year's quarter, 9.1 million iPods sold this quarter compared to 10.2 million in the year-ago quarter. 

But the iPhone was where it's all at, so to speak. Apple sold 14.1 million iPhones this quarter, compared to just under 7.4 million in the previous September quarter. This represents 91 percent year-over-year growth and is well ahead of IDC's estimate of 64 percent growth for the global smart phone market overall in the September quarter. 

Good earnings news aside, the call was noteworthy because it included as a participant CEO and front man, Steve Jobs (News - Alert), who seldom participates in the calls. Jobs celebrated the company's earnings, but also used the call to direct some criticism at competitors, namely Google and Research in Motion (News - Alert) (RIM).

"We sold 14.1 million iPhones in the quarter which represents a 91 percent unit growth over the year-ago quarter and was well ahead of IDC's latest published estimate of 64 percent growth for the global smartphone market in the September quarter," said Jobs. "And it handily beat RIM's 12.1 million Blackberrys sold in their most recent quarter ending in August. We've now passed RIM, and I don't seem them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort into the unfamiliar territory of trying to become a software platform company." 

Jobs' strongest words, however, were reserved for Google and its Android (News - Alert) phone platform. Jobs noted that estimates that more Android-based handsets were shipped last quarter than iPhones were useless, since no one is currently keeping precise track of the number of Android phones shipped. But his harshest words were for the platform itself.

"Google (News - Alert) loves to characterize Android as open, and iOS and iPhone as closed. We find this a bit disingenuous and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word open is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same app, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The users will have to figure it all out. Compare this with iPhone, where every handset works the same."

Jobs noted that this fragmentation is ultimately where Android will fall down at Apple's feet. "We...think our developers can be more innovative if they can target a singular platform rather than a hundred variants. They can put their time into innovative new features rather than testing on hundreds of different handsets."

Finally, Jobs addressed the new entrants to the tablet market by stressing the strengths of Apple's iPad tablet, including its larger screen and wide selection of apps available in the Apple App Store.