How Apple sliced its pie in 2009

The Mac and iPod slices shrank between '08 and '09. iTunes grew a bit. iPhone grew a lot.

[Originally posted Oct. 28 at Fortune.com.]

Steve Jobs likes to describe Apple's (AAPL) business model as a stool built on three-legs: the Mac, the iPod and the iPhone.

But a quick glance at the 2009 Form 10-K, which Apple filed on Tuesday, shows that it is now more like a four-leg chair, with a couple of wedge-shaped pillows on the side.

The Mac and iPod still bring in the biggest part of Apple's total sales revenue -- 37.7% and 22.1%, respectively -- but their shares of the pie are shrinking.

The iPhone, meanwhile, is rapidly catching up, thanks to unit sales that grew 78% and GAAP revenue (swelled by deferred revenue dating back to 2007) that grew 266%. The iPhone now accounts for 18.5% of Apple's sales, just behind the iPod.

The fourth leg of the chair is the line item Apple calls "other music related products and services" but which is mostly iTunes Store sales -- music, video and apps. It continues to grow at a steady pace and now represents about 11% of Apple's net sales.

Spreadsheets summarizing Apple's revenue streams are pasted below the fold. Apple's 2009 Form 10-K is available as a pdf file here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Steve Jobs is $300 million richer

His net worth shot up to $5.4 billion Wednesday, only partly thanks to Apple


[Originally posted Oct. 21, 2009 on Fortune.com]

In September, Steve Jobs' $5.1 billion earned him the No. 43 spot on Forbes' list of the 400 richest Americans. Since then, Apple's shares have rocketed to a new all-time high, closing Wednesday at $204.92.

So Jobs was a lot richer Wednesday than he was in September -- $300 million richer, at least on paper -- but only 3/5 that increase is thanks to Apple (AAPL). The rest is Disney's (DIS) doing.

[Jobs was even richer before the market gave up most of its gains in the last hour of trading. See below.]

According to the two companies' proxy statements, the bulk of Jobs' net worth is in the form of preferentially owned stock:

• 5.426 million shares of Apple (most of it from a 2003 grant of 10 million shares, later reduced to pay taxes)
• 138 million shares of Disney (from when Disney acquired Pixar)

In the six weeks since Forbes took its financial snapshot, Apple has gained 32.42 points (as of Wednesday's close) while Disney inched up 87 cents. But because Jobs' net worth is so much more closely tied to Disney than to Apple, those 87 cents carry a lot of weight in his portfolio. Bottom line: by Wednesday night, Jobs' holdings had increased in value ...

Apple earnings: How the analysts got it so wrong

Everybody failed to predict Cupertino's blowout quarter, but some failed worse than others

[Originally posted Oct. 20, 2009 on Fortune.com]

"Well, that was quite embarrassing!" writes "deagol," a widely read amateur analyst whose estimate of Apple's (AAPL) fourth quarter earnings fell 16% short of the record profits the company reported Monday.

The irony is that deagol, who filed a long post-mortem mea culpa on his website Monday night, had less to be embarrassed about than 18 of the 19 Wall Street analysts we polled in advance of Apple's fiscal 2009 4Q earnings report. (See The Street awaits Apple's earnings.)
Once again, the amateurs and independents out-performed the professionals in our quarterly Apple analyst bake-off. The color-coded spreadsheet is pasted below the fold.

But first, some general comments about why everybody failed to predict that Apple's profits would grow 46% or that the company would sell a record 3 million Macs -- up 17% in a quarter in which its competitors, selling cut-rate Windows boxes at razor-thin profit margins, grew an anemic 2%. (See here.)

The key misses:

Verizon vs. AT&T: There's a map for that

[Originally posted Oct. 11, 2009 on Fortune.com]

UPDATE: Since this was posted, AT&T has sued Verizon in a U.S. District Court, claiming false advertising and petitioning for restraining orders that would keep this ad off the air. See here.

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Borrowing a line from Apple's (AAPL) "There's an app for that" TV ad campaign, Verizon (VZ) launched a high-profile attack on rival AT&T (T) last night in the middle of Monday Night Football's Viking-Packer game.

"If you want to know why some people have spotty 3G coverage," goes the voice over, as a scruffy-looking character frowns at his iPhone. "There’s a map for that."

A YouTube version of the ad -- captured, ironically, on an iPhone 3GS -- is pasted below the fold.
The campaign begins at a moment of high drama in the smartphone wars. It was launched on the eve of a Tuesday morning press conference at which Verizon discussed its plans to compete against Apple with devices running Google's (GOOG) Android operating system. (See here.)

And it follows both a new wave of complaints about AT&T's sluggish service and a widely-read estimate by Morgan Stanley that if Apple were to sell the iPhone through both AT&T and Verizon, its share of the U.S. handset market could rise from less than 5% today to more than 12%. (See here.)

Below: Verizon's new TV ad.