Category: Economics – Media

OECD broadband statistics to December 2006. Over the past year, the number of broadband subscribers in the OECD increased 26 per cent from 157 million in December 2005 to 197 million in December 2006. This growth increased broadband penetration rates in the OECD from 13.5 in December 2005 to 16.9 subscriptions per 100 inhabitants one year later. [Creative Economy : Topic Articles]

Australia’s impending copyright laws. PODCAST

Apple Posts $1.21 Billion Profit for Q2 2009.

The weak economy is hurting Mac sales to professional and educational customers, but consumer sales and the iPhone and iPod touch have lifted Apple to another impressive financial quarter. Ending the second quarter of 2009, Apple reported a $1.21 billion profit on revenue of $8.16 billion, or $1.33 per diluted share (those numbers compare to a $1.05 billion profit on $7.51 billion in the year-ago quarter). Also contributing to the strong bottom line were low prices for components such as RAM, better freight and warranty costs, and better sales of high-margin products, all of which helped push Apple’s gross margin to 36.4 percent (up from 32.9 percent last year).

In a conference call with analysts, Apple Chief Financial Officer Peter Oppenheimer called it Apple’s “best non-holiday quarter in history.” The company reported $28.9 billion in cash on hand, noting that it’s focusing on “preservation of capital” with that cash (and presumably not looking at any major acquisitions).

Macs and iPods — During the quarter ending 31-Mar-09, Apple sold 2.2 million Macs, a 3 percent decline from last year. Apple attributed the drop to professionals, such as design firms, who are likely holding off purchases to save costs until the economy improves, and to educational customers who have seen state and federal funding dry up. Although U.S. educational sales dropped 11 percent, the company is optimistic that the recently passed U.S. stimulus package will help in future quarters. The desktop refresh in early March (which updated all of Apple’s desktop models) boosted sales.

As part of the discussion of Mac sales, the question of netbooks arose during the call. Chief Operating Officer Tim Cook expressed Apple’s opinion of the current netbook market, saying, “When I look at what’s being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience and not something that we would put the Mac brand on, quite frankly.”

As with his comments during the last quarter’s conference call, Cook pointed out that Apple has “some interesting ideas in this space.” He also pointed out that the features for which people are buying netbooks – Web browsing and email – can be accomplished with the iPhone or iPod touch.

Led by strong sales of the iPod touch, Apple racked up 11.01 million iPod sales during the quarter, a 3 percent year-over-year improvement. During the call, Oppenheimer and Cook reiterated the strength of the App Store and the iPhone OS (which also runs the iPod touch) as fueling those sales, and reminded listeners that they expected the App Store to mark its 1 billionth download sometime on Thursday. (The billionth app was indeed downloaded on Thursday, by a 13-year-old in Connecticut.) Apple claims it owns 70 percent of the market for music players in the United States.

iPhone 3G — The star of Apple’s financial results, once again, is the iPhone, with 3.8 million iPhones sold in 81 countries, a 123 percent growth over the year-ago quarter. Those numbers represent the GAAP (Generally Accepted Accounting Principles) results – Apple spreads the income for the iPhone and Apple TV over their expected lifespan. Non-GAAP results push Apple’s quarterly totals to a $1.66 billion profit on $9.06 billion in revenue (that’s money directly received during the quarter).

Apple is also delaying revenue recognition for sales of all iPhones after 17-Mar-09, which is when it announced the iPhone OS 3.0; current iPhones will be able to upgrade to the new operating system for free when it appears later this year.

Unlike the last earnings call, this one didn’t offer any incendiary questions or statements. Only one mention of Steve Jobs’s health came up, and that was as an aside: Oppenheimer said, “We look forward to Steve returning at the end of June.” Analysts also tried to elicit comments about possible legal skirmishes over the Palm Pre and whether it violates Apple’s intellectual property (or whether Apple is infringing on Palm’s patents), which prompted Cook to end the call with a generic statement about how competition is healthy for the industry and that “we think it’s best that other companies invent their own stuff.”

Copyright © 2009 Jeff Carlson. TidBITS is copyright © 2009 TidBITS Publishing Inc. If you’re reading this article on a Web site other than TidBITS.com, please let us know, because if it was republished without attribution, by a commercial site, or in modified form, it violates our Creative Commons License.

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By jeffc@tidbits.com (Jeff Carlson). [TidBITS: Mac News for the Rest of Us]

High-speed Internet roll-out likely within 3 yrs, Coonan says. The Federal Communications Minister says she expects a new high-speed Internet network will start being rolled out within three years, without billions of dollars in public funding proposed by the Opposition. [ABC News: Breaking Stories]

Disney Cartoon Mashup Explains Copyright Law. A Stanford University documentary film project, A Fair(y) Use Tale, weaves snippets of classic animated films into a short short in which Disney characters explain the basics of fair use and argue against longer copyrights.

[Wired Top Stories]

Apple store update

Really long time readers might recall that perhaps my first blog post ever was about the Apple store.

Here’s an update, five years later:

I spent an hour or two on Saturday at the Soho store. The obvious difference, other than how incredibly jammed it was, was who was there.

Couples.
Fashionistas.
Women.

In fact, my guess is that more than half the people in the store were women. And they weren’t all buying iPods, that’s for sure. This is clearly
the result of an intentional multi-year strategy. Apple has succeeded in doing something that no one else in tech or even cars has done. They’ve crossed the gender barrier and made people of both genders passionate about what they sell.

Next project: hiring more people to work the registers! When you have a gross margin as high as they do, it’s a sin to make someone wait even one minute to hand you money.

– Seth Godin [Seth’s Blog]

Sony Reader Gets 500,000 Free Public Domain Titles from Google.

Google made a practical move with some of the 7 million books it’s scanned from academic collections by making 500,000 titles with no remaining copyright protection available to Sony for its electronic book device, the Reader. Reports indicate only books from 1922 or earlier were included, as 1922 is the latest date for which public domain status is entirely clear. (Many works published after 1922 are also in the public domain, but each work has to be researched individually to determine its status.)

Earlier this year, Google added an option to view but not download 2 million public domain books on the iPhone; see “More Ebooks Available for the iPhone/iPod touch,” 2009-02-09. Think of it like iTunes song purchases versus a Pandora stream.

Google’s program to scan books ran afoul of publishers and authors’ concerns about the right to scan and archive titles, and the legality of snippets being displayed from these scanned works. A preliminary settlement between Google and various interested parties should make millions of books available for viewing, printing, download, and purchase in the coming months; these titles could also wind up being previewable and for sale on the Reader. (See “Authors and Publishers Settle with Google Book Search,” 2008-10-29.)

It’s clear that Google has chosen a side (for now) between the two giants of electronic book readers, Sony and Amazon. The Wall Street Journal notes Sony said its Reader sales are at 400,000 and reported that Citigroup estimated Amazon Kindle sales at 500,000.

The Kindle 2, introduced in February, improves on the design of the original device and has a faster screen refresh. Amazon released Kindle for iPhone shortly after the Kindle 2 hardware. Amazon offers 245,000 books for sale along with subscriptions to dozens of magazines and newspapers, and hundreds of blogs. The iPhone software can download only books, not subscriptions. That may change with Apple’s iPhone 3.0 software, which now enables in-application subscriptions and purchases.

Lest we forget, Project Gutenberg‘s volunteers have been assiduously typing, scanning, and correcting out-of-copyright works for many years. Its catalog, now at 27,000 books, includes downloads in text and other formats, including a DRM-free ePub format that both the Reader and Kindle 2 can handle. Affiliated and partner projects bring a grand total to 100,000 titles.

While Project Gutenberg has a fraction of what Google has made available, the quality should be higher, as works have been prepared for accuracy instead of volume, and represent works of a great likelihood to be interesting to a modern audience instead of historians and researchers.

Copyright © 2009 Glenn Fleishman. TidBITS is copyright © 2009 TidBITS Publishing Inc. If you’re reading this article on a Web site other than TidBITS.com, please let us know, because if it was republished without attribution, by a commercial site, or in modified form, it violates our Creative Commons License.

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By glenn@tidbits.com (Glenn Fleishman). [TidBITS: Mac News for the Rest of Us]