Three Numbers from Apple’s Earnings That Should Scare Competitors
By now you have probably heard that Apple had the best quarter of their existence in the previous earnings period. Ben has given the basic details in his post but I wanted to share with you three other numbers that came from the call with their COO, Tim Cook, after the earnings were released-numbers that should keep Apple’s competitors up at night.
The first is their cash horde. It now sits as $76.2 billion. In my PC Mag column this week I wrote in detail how Apple uses this cash to its advantage and I suggest you read it and see how Apple “invents” products of the future with this cash reserve, making it very hard for competitors to keep up with them. A reader pointed out that if you subtract current liabilities from this cash position, they actually have about $60 billion in free cash to work with. This is still a pretty big reserve to work with.
The second scary number is that Cook said that 86% of the Fortune 500 in the US are testing iPads and looking at deploying them within their enterprise solutions. We already know that SalesForce.com has bought iPads for their entire work force and are seeing major benefits from its use. And Cook also said that it is being tested in many US government organizations as well. If Apple gains a lot of traction with major US enterprises it could make it hard for any other tablet makers to make any serious inroads given Apple’s huge head start with the iPad.
But the third number should really cause the major PC companies with WW reach to be concerned. Tim Cook said that 49% of the Global 500 are testing iPads for use in global enterprise solutions. I am aware of at least two Global 500 companies that are in the final stages of their tests and could buy thousands of iPads for WW deployment by early next year. This kind of interest from Global IT bodes well for Apple and means that their large head start over competitors could serve the very well in this WW market for enterprise-based tablets.
Although the main audience that is driving iPad sales is clearly coming from consumer’s, this interest in iPads within corporate America and WW IT could possibly increase demand more for iPads by a third of what it already is today from consumers. While the big tablet vendors are also eyeing IT markets for their tablets, they better get a serious offering into their IT customers hands soon or they risk the possibility that Apple could “iPod” them in this market the same way Apple innovated around the iPod and pretty much wiped out any competitive threats along the way.
If I was an Apple competitor, I would be amazed at the monster earning numbers. But the three numbers I listed above should have me shaking in my boots.