Anyone who watches the company has to assume that the governance is so low-balled as to be rolling into the Marianas Trench. But even with more than 20.3 million iPhones, 9.2 million iPads, and 3.9 million Macs â€"- let's not mince words, an amazing performance -- there are two interesting issues.
Who runs the show next?
Although Apple would never publicly speculate about this issue, CEO Steve Jobs can't last forever. No one can, and he's had a worse string of bad health than most people can imagine, let alone experience.
According to the WSJ, some Apple board members are considering BWJ: business without Jobs. It's not the whole board acting, reportedly, and there's isn't a hunt for a new chief executive. But the independent directors take succession seriously, as they should. And, apparently, this is a topic of discussion at every board meeting and has been for years.
COO Tim Cook is a leading candidate -- as you would expect. Interestingly, the Journal said that Jobs replied to an emailed request for a comment and called the notion "hogwash." That suggests one of three situations brewing (assuming that the report is accurate):
- Jobs is unaware of the discussions and is out-of-touch and naÃ¯ve.
- Jobs is unaware of the discussions because the independent directors are worried about his famously mercurial temper, which would be a worse sign than the previous one.
- Jobs is playing mind games with reporters.
Average selling prices
To follow what's happening with product prices, here's Apple's summary data table (click to enlarge):
Notice that in some cases, unit growth is always higher than the corresponding revenue growth. When that happens, products are going for a lower average selling price (ASP) over time. This is clearly the case in the sequential quarterly movement of iPhones: 9 percent increase in units, 8 percent in revenue. It represents maybe about a percent in average price per phone.
As ChannelPartners noted earlier today, AT&T (T) dropped the 3GS price to $9. No, that isn't a special. It's likely a sign of an upcoming iPhone 5 in the fall as AT&T and Apple try to clear old inventory. That could explain the drop, particularly with a year-over-year increase of about 6 percent in iPhone ASP.
The iPod is a declining product, but still represents more than $1 billion in quarterly revenue. Again, there's the same pattern of revenue dropping faster in sequential quarters than the number of units. But year-over-year, price held up better compared to units, so ASP increased.
Perhaps it's a seasonal drop, as both desktop and laptop Mac ASPs dropped sequentially, but were up year-over-year.
The iPad showed the opposite trend. ASP went up by over 16 percent in sequential quarters. But year-over-year, ASPs dropped by about 2.2 percent. The jump was likely because constrained supply forced people to buy more expensive units than they might otherwise have so they could get at least some version of the product. However, in the long term, yes, the price will come down. But don't expect any big drops. Apple is particularly good at maintaining the prices it wants.
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