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Amazon crushes estimates in Q1, posts $130 million profit on $13.18 billion in sales

Thursday, April 26th, 2012

Amazon on Thursday reported its financial results for the first quarter of 2012. Analysts were looking for a profit of $0.07 per share on $12.86 billion in sales, and Amazon posted earnings of $0.28 per share on revenue of $13.18 billion, crushing expectations. The retailer netted $0.38 per share on revenue of $17.4 billion this past holiday quarter, and $0.44 per share on $9.86 billion in sales during the first quarter last year. The nationwide retailer’s stock had been up and down all week as Wall Street’s concerns over margins continued to rattle investors. Amazon’s operating margin fell 3.7% to 1.5% of global revenue in the fourth quarter and in the first quarter a year ago, Amazon’s margins sat at 3.3%. In the first quarter of 2012, Amazon’s operating margins stayed flat at 1.5%. For the second quarter, Amazon forecasts a profit of $40 million, up from a loss of $260 million in the second quarter last year, on revenue of between $11.9 billion and $13.3 billion. Amazon’s stock was up more than 8% percent in after-hours trading on Thursday. The company’s full press release follows below.

AMAZON.COM ANNOUNCES FIRST QUARTER SALES UP 34% TO $13.18 BILLION; 16 OF THE TOP 100 BESTSELLING TITLES ARE EXCLUSIVE TO THE KINDLE STORE

SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2012.

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store”

Operating cash flow increased 1% to $3.05 billion for the trailing twelve months, compared with $3.03 billion for the trailing twelve months ended March 31, 2011. Free cash flow decreased 39% to $1.15 billion for the trailing twelve months, compared with $1.90 billion for the trailing twelve months ended March 31, 2011.

Common shares outstanding plus shares underlying stock-based awards totaled 464 million on March 31, 2012, compared with 466 million a year ago. During the quarter, the Company repurchased 5.3 million shares, or $960 million, under its previously announced authorization to repurchase up to $2 billion of the Company’s common stock.

Net sales increased 34% to $13.18 billion in the first quarter, compared with $9.86 billion in first quarter 2011. Excluding the $56 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34% compared with first quarter 2011.

Operating income was $192 million in the first quarter, compared with $322 million in first quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $4 million.

Net income decreased 35% to $130 million in the first quarter, or $0.28 per diluted share, compared with net income of $201 million, or $0.44 per diluted share, in first quarter 2011.

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store,” said Jeff Bezos, founder and CEO of Amazon.com. “If you’re an Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library. The Kindle Owners’ Lending Library is heavily used by Kindle owners, and it has extremely unusual features that both authors and customers love. Every time you borrow a book, the author gets paid – and we have an inexhaustible supply of each title so you never have to wait in a queue for the book you want. Kindle is the bestselling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”

Highlights

  • Kindle Fire remains the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since launch. In the first quarter, 9 out of 10 of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.
  • Amazon launched Kindle Touch Wi-Fi and Kindle Touch 3G on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it, and Amazon.es. The full line of Kindle e-ink readers is now available in over 175 countries around the world. Kindle Touch 3G is the most full-featured e-reader with an easy to use touchscreen and the unparalleled convenience of free 3G – no hunting for Wi-Fi spots, simply think of a book and download it. Kindle remains the bestseller on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es since their launches.
  • Amazon introduced a new version of its popular Kindle for iPad app, which is the #5 free iPad app of all time and the #1 free books app on iPad. Millions of customers are using the new Kindle for iPad app, which is optimized for the high resolution display of the newest iPad.
  • Amazon announced an In-App Purchasing service, making it easy for Amazon Appstore developers to offer digital content and subscriptions for purchase within apps and games that are available on millions of Kindle Fires and other Android devices. Amazon Appstore’s In-App Purchasing service is simple for developers to integrate and helps monetize their apps and games, while offering customers a seamless and secure 1-Click purchasing experience.
  • Amazon.com announced the launch of the Amazon Instant Video app for PlayStation 3 (PS3), making the PS3 system the first video game console system to offer Amazon Instant Video, and allowing PS3 users to stream Prime Instant Videos and rent or buy the latest movies and TV episodes directly from their PS3. Customers can also access Amazon Instant Video and Prime Instant Video from Kindle Fire, Mac or PC, or on a TV using either a compatible connected device such as a Blu-ray player or a Roku or directly on compatible Smart TVs.
  • Amazon continued to expand its catalog of title offerings for Prime Instant Video, announcing licensing agreements with Discovery Communications and Viacom. Among the programs added are Discovery Channel’s Dirty Jobs, TLC’s Say Yes To The Dress and Animal Planet’s Whale Wars, as well as thousands of TV episodes from MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo. These deals bring the total number of Prime Instant Videos to more than 17,000 movies and TV episodes from partners such as CBS, Fox, NBCUniversal, Sony, Warner Bros., PBS, Disney-ABC and many more.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.43 billion, up 36% from first quarter 2011.
  • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $5.76 billion, up 31% from first quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 32%.
  • Worldwide Media sales grew 19% to $4.71 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
  • Worldwide Electronics and Other General Merchandise sales grew 43% to $7.97 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 43%.
  • Amazon Web Services (AWS) announced that Amazon DynamoDB – the fastest growing AWS service ever – is now available in both the EU (Ireland) and Asia Pacific (Tokyo) Regions. Amazon DynamoDB is a fully managed NoSQL database service that provides extremely fast and predictable performance with seamless scalability.
  • AWS lowered prices for the 19th time in five years by reducing reserved instance prices for Amazon EC2 and Amazon RDS, as well as reducing on-demand pricing for Amazon EC2, Amazon RDS, and Amazon ElastiCache.
  • AWS launched AWS Marketplace, an online store that makes it easy for customers to find, compare, and immediately start using the software and services they need to build software systems and products, and run their businesses. With AWS Marketplace, software and SaaS providers with offerings that run in the AWS Cloud can benefit from increased awareness, simplified deployment, and automated billing. AWS Marketplace brings the same simple, trusted, and secure online shopping experience that customers enjoy on Amazon.com to software built for the AWS platform, streamlining the process of doing research and purchasing software.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of April 26, 2012, and exclude financial results of the Kiva Systems, Inc. acquisition which we expect to close in second quarter 2012. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Second Quarter 2012 Guidance

  • Net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011.
  • Operating income (loss) is expected to be between $(260) million and $40 million, or between 229% decline and 80% decline compared with second quarter 2011.
  • This guidance includes approximately $260 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

About Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV episodes, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

Amazon and its affiliates operate websites, including www.amazon.comwww.amazon.co.ukwww.amazon.dewww.amazon.co.jpwww.amazon.frwww.amazon.cawww.amazon.cn,www.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
2012 2011 2012 2011
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 5,269 $ 3,777 $ 2,641 $ 1,844
OPERATING ACTIVITIES:
Net income 130 201 561 1,054
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of fixed assets, including internal-use software and website development, and other amortization 457 202 1,338 652
Stock-based compensation 160 110 605 448
Other operating expense (income), net 46 33 168 112
Losses (gains) on sales of marketable securities, net (2 ) 2 (8 ) 1
Other expense (income), net 15 37 (78 ) (36 )
Deferred income taxes (38 ) 15 83 38
Excess tax benefits from stock-based compensation (40 ) (46 ) (56 ) (219 )
Changes in operating assets and liabilities:
Inventories 747 343 (1,374 ) (997 )
Accounts receivable, net and other 746 359 (479 ) (170 )
Accounts payable (4,258 ) (2,649 ) 1,388 1,641
Accrued expenses and other (529 ) (183 ) 721 697
Additions to unearned revenue 397 210 1,252 709
Amortization of previously unearned revenue (269 ) (220 ) (1,070 ) (897 )
Net cash provided by (used in) operating activities (2,438 ) (1,586 ) 3,051 3,033
INVESTING ACTIVITIES:
Purchases of fixed assets, including internal-use software and website development (386 ) (298 ) (1,899 ) (1,138 )
Acquisitions, net of cash acquired, and other (50 ) (139 ) (615 ) (473 )
Sales and maturities of marketable securities and other investments 1,738 1,939 6,641 5,318
Purchases of marketable securities and other investments (852 ) (1,112 ) (5,997 ) (6,135 )
Net cash provided by (used in) investing activities 450 390 (1,870 ) (2,428 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation 40 46 56 219
Common stock repurchased (960 ) - (1,237 ) -
Proceeds from long-term debt and other 68 89 154 168
Repayments of long-term debt, capital lease, and finance lease obligations (153 ) (111 ) (483 ) (295 )
Net cash provided by (used in) financing activities (1,005 ) 24 (1,510 ) 92
Foreign-currency effect on cash and cash equivalents 12 36 (24 ) 100
Net increase (decrease) in cash and cash equivalents (2,981 ) (1,136 ) (353 ) 797
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,288 $ 2,641 $ 2,288 $ 2,641
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt $ 6 $ 3 $ 17 $ 12
Cash paid for income taxes (net of refunds) 19 7 45 79
Fixed assets acquired under capital leases 149 181 721 526
Fixed assets acquired under build-to-suit leases 17 69 207 182
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended
March 31,
2012 2011
Net product sales (1) $ 11,249 $ 8,698
Net services sales (2) 1,936 1,159
Net sales 13,185 9,857
Operating expenses (3):
Cost of sales 10,027 7,608
Fulfillment 1,295 855
Marketing 480 327
Technology and content 945 579
General and administrative 200 133
Other operating expense (income), net 46 33
Total operating expenses 12,993 9,535
Income from operations 192 322
Interest income 12 15
Interest expense (21 ) (12 )
Other income (expense), net (99 ) (18 )
Total non-operating income (expense) (108 ) (15 )
Income before income taxes 84 307
Provision for income taxes (43 ) (89 )
Equity-method investment activity, net of tax 89 (17 )
Net income $ 130 $ 201
Basic earnings per share $ 0.29 $ 0.44
Diluted earnings per share $ 0.28 $ 0.44
Weighted average shares used in computation of earnings per share:
Basic 453 451
Diluted 460 459
(1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.
(2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.
(3) Includes stock-based compensation as follows:
Fulfillment $ 37 $ 24
Marketing 12 7
Technology and content 85 61
General and administrative 26 18
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
Net income $ 130 $ 201
Other comprehensive income:
Foreign currency translation adjustments, net of tax of $(38) and $(7) 137 135
Change in unrealized gains on available-for-sale securities, net of tax of $(2) and $(5) 5 (11 )
Total other comprehensive income 142 124
Comprehensive income $ 272 $ 325
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
North America
Net sales $ 7,427 $ 5,465
Segment operating expenses (1) 7,078 5,175
Segment operating income $ 349 $ 290
International
Net sales $ 5,758 $ 4,392
Segment operating expenses (1) 5,709 4,217
Segment operating income $ 49 $ 175
Consolidated
Net sales $ 13,185 $ 9,857
Segment operating expenses (1) 12,787 9,392
Segment operating income 398 465
Stock-based compensation (160 ) (110 )
Other operating income (expense), net (46 ) (33 )
Income from operations 192 322
Total non-operating income (expense) (108 ) (15 )
Provision for income taxes (43 ) (89 )
Equity-method investment activity, net of tax 89 (17 )
Net income $ 130 $ 201
Segment Highlights:
Y/Y net sales growth:
North America 36 % 45 %
International 31 31
Consolidated 34 38
Y/Y segment operating income growth (decline):
North America 20 % 6 %
International (72 ) (25 )
Consolidated (15 ) (8 )
Net sales mix:
North America 56 % 55 %
International 44 45
100 % 100 %
(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
North America
Media $ 2,197 $ 1,885
Electronics and other general merchandise 4,772 3,303
Other (1) 458 277
Total North America $ 7,427 $ 5,465
International
Media $ 2,513 $ 2,073
Electronics and other general merchandise 3,203 2,285
Other (1) 42 34
Total International $ 5,758 $ 4,392
Consolidated
Media $ 4,710 $ 3,958
Electronics and other general merchandise 7,975 5,588
Other (1) 500 311
Total Consolidated $ 13,185 $ 9,857
Y/Y Net Sales Growth:
North America:
Media 17 % 18 %
Electronics and other general merchandise 44 63
Other 66 74
Total North America 36 45
International:
Media 21 % 13 %
Electronics and other general merchandise 40 54
Other 24 15
Total International 31 31
Consolidated:
Media 19 % 15 %
Electronics and other general merchandise 43 59
Other 61 65
Total Consolidated 34 38
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media 22 % 9 %
Electronics and other general merchandise 42 49
Other 26 12
Total International 32 27
Consolidated:
Media 19 % 13 %
Electronics and other general merchandise 43 57
Other 61 64
Total Consolidated 34 36
Consolidated Net Sales Mix:
Media 36 % 40 %
Electronics and other general merchandise 60 57
Other 4 3
100 % 100 %
(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional activities, co-branded credit card agreements, and other seller sites.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
March 31, December 31,
2012 2011
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 2,288 $ 5,269
Marketable securities 3,427 4,307
Inventories 4,255 4,992
Accounts receivable, net and other 1,813 2,571
Deferred tax assets 371 351
Total current assets 12,154 17,490
Fixed assets, net 4,653 4,417
Deferred tax assets 27 28
Goodwill 1,970 1,955
Other assets 1,535 1,388
Total assets $ 20,339 $ 25,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 6,886 $ 11,145
Accrued expenses and other 3,602 3,751
Total current liabilities 10,488 14,896
Long-term liabilities 2,580 2,625
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none - -
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 474 and 473
Outstanding shares — 450 and 455 5 5
Treasury stock, at cost (1,837 ) (877 )
Additional paid-in capital 7,192 6,990
Accumulated other comprehensive loss (174 ) (316 )
Retained earnings 2,085 1,955
Total stockholders’ equity 7,271 7,757
Total liabilities and stockholders’ equity $ 20,339 $ 25,278
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Y/Y %
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change
Cash Flows and Shares
Operating cash flow — trailing twelve months (TTM) $ 3,033 $ 3,205 $ 3,114 $ 3,903 $ 3,051 1 %
Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 1,138 $ 1,374 $ 1,589 $ 1,811 $ 1,899 67 %
Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 1,895 $ 1,831 $ 1,525 $ 2,092 $ 1,152 (39 %)
Free cash flow — TTM Y/Y growth (18 %) (8 %) (17 %) (17 %) (39 %) N/A
Invested capital (1) $ 7,931 $ 8,551 $ 9,147 $ 9,680 $ 10,006 N/A
Return on invested capital (2) 24 % 21 % 17 % 22 % 12 % N/A
Common shares and stock-based awards outstanding 466 468 469 468 464 -
Common shares outstanding 452 454 455 455 450 -
Stock-based awards outstanding 14 15 14 14 13 (4 %)
Stock-based awards outstanding — % of common shares outstanding 3.1 % 3.2 % 3.2 % 3.0 % 2.9 % N/A
Results of Operations
Worldwide (WW) net sales $ 9,857 $ 9,913 $ 10,876 $ 17,431 $ 13,185 34 %
WW net sales — Y/Y growth, excluding F/X 36 % 44 % 39 % 34 % 34 % N/A
WW net sales — TTM $ 36,931 $ 40,278 $ 43,594 $ 48,077 $ 51,404 39 %
WW net sales — TTM Y/Y growth, excluding F/X 39 % 39 % 39 % 37 % 37 % N/A
Operating income $ 322 $ 201 $ 79 $ 260 $ 192 (40 %)
Operating income — Y/Y growth, excluding F/X (20 %) (36 %) (77 %) (48 %) (38 %) N/A
Operating margin — % of WW net sales 3.3 % 2.0 % 0.7 % 1.5 % 1.5 % N/A
Operating income — TTM $ 1,334 $ 1,265 $ 1,076 $ 862 $ 732 (45 %)
Operating income — TTM Y/Y growth, excluding F/X 7 % (7 %) (25 %) (44 %) (50 %) N/A
Operating margin — TTM % of WW net sales 3.6 % 3.1 % 2.5 % 1.8 % 1.4 % N/A
Net income $ 201 $ 191 $ 63 $ 177 $ 130 (35 %)
Net income per diluted share $ 0.44 $ 0.41 $ 0.14 $ 0.38 $ 0.28 (35 %)
Net income — TTM $ 1,054 $ 1,038 $ 871 $ 631 $ 561 (47 %)
Net income per diluted share — TTM $ 2.30 $ 2.26 $ 1.89 $ 1.37 $ 1.22 (47 %)
Segments
North America Segment:
Net sales $ 5,465 $ 5,406 $ 5,932 $ 9,902 $ 7,427 36 %
Net sales — Y/Y growth, excluding F/X 45 % 50 % 44 % 37 % 36 % N/A
Net sales — TTM $ 20,392 $ 22,208 $ 24,014 $ 26,705 $ 28,667 41 %
Operating income $ 290 $ 214 $ 144 $ 285 $ 349 20 %
Operating margin — % of North America net sales 5.3 % 4.0 % 2.4 % 2.9 % 4.7 % N/A
Operating income — TTM $ 972 $ 986 $ 943 $ 933 $ 991 2 %
Operating income — TTM Y/Y growth, excluding F/X 17 % 9 % 1 % (2 %) 2 % N/A
Operating margin — TTM % of North America net sales 4.8 % 4.4 % 3.9 % 3.5 % 3.5 % N/A
International Segment:
Net sales $ 4,392 $ 4,507 $ 4,944 $ 7,529 $ 5,758 31 %
Net sales — Y/Y growth, excluding F/X 27 % 36 % 33 % 29 % 32 % N/A
Net sales — TTM $ 16,539 $ 18,070 $ 19,580 $ 21,372 $ 22,737 37 %
Net sales — TTM % of WW net sales 45 % 45 % 45 % 44 % 44 % N/A
Operating income $ 175 $ 172 $ 116 $ 177 $ 49 (72 %)
Operating margin — % of International net sales 4.0 % 3.8 % 2.4 % 2.4 % 0.9 % N/A
Operating income — TTM $ 922 $ 888 $ 790 $ 640 $ 515 (44 %)
Operating income — TTM Y/Y growth, excluding F/X 4 % (7 %) (23 %) (41 %) (49 %) N/A
Operating margin — TTM % of International net sales 5.6 % 4.9 % 4.0 % 3.0 % 2.3 % N/A
Consolidated Segments:
Operating expenses (3) $ 9,392 $ 9,527 $ 10,616 $ 16,969 $ 12,787 36 %
Operating expenses — TTM (3) $ 35,037 $ 38,404 $ 41,860 $ 46,504 $ 49,899 42 %
Operating income $ 465 $ 386 $ 260 $ 462 $ 398 (15 %)
Operating margin — % of Consolidated sales 4.7 % 3.9 % 2.4 % 2.7 % 3.0 % N/A
Operating income — TTM $ 1,894 $ 1,874 $ 1,734 $ 1,573 $ 1,505 (21 %)
Operating income — TTM Y/Y growth, excluding F/X 10 % 1 % (11 %) (21 %) (22 %) N/A
Operating margin — TTM % of Consolidated net sales 5.1 % 4.7 % 4.0 % 3.3 % 2.9 % N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
Y/Y %
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 1,885 $ 1,585 $ 1,927 $ 2,562 $ 2,197 17 %
Media — Y/Y growth, excluding F/X 18 % 19 % 21 % 8 % 17 % N/A
Media — TTM $ 7,170 $ 7,430 $ 7,767 $ 7,959 $ 8,270 15 %
Electronics and other general merchandise $ 3,303 $ 3,496 $ 3,635 $ 6,881 $ 4,772 44 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 63 % 67 % 56 % 51 % 44 % N/A
Electronics and other general merchandise — TTM $ 12,277 $ 13,683 $ 14,992 $ 17,315 $ 18,784 53 %
Electronics and other general merchandise — TTM % of North America net sales 60 % 62 % 62 % 65 % 66 % N/A
Other $ 277 $ 325 $ 370 $ 459 $ 458 66 %
Other — TTM $ 945 $ 1,095 $ 1,255 $ 1,431 $ 1,613 71 %
Supplemental International Segment Net Sales:
Media $ 2,073 $ 2,075 $ 2,226 $ 3,447 $ 2,513 21 %
Media — Y/Y growth, excluding F/X 9 % 20 % 17 % 18 % 22 % N/A
Media — TTM $ 8,247 $ 8,772 $ 9,238 $ 9,820 $ 10,261 24 %
Electronics and other general merchandise $ 2,285 $ 2,398 $ 2,681 $ 4,032 $ 3,203 40 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 49 % 53 % 51 % 41 % 42 % N/A
Electronics and other general merchandise — TTM $ 8,162 $ 9,162 $ 10,199 $ 11,397 $ 12,314 51 %
Electronics and other general merchandise — TTM % of International net sales 49 % 51 % 52 % 53 % 54 % N/A
Other $ 34 $ 34 $ 37 $ 50 $ 42 24 %
Other — TTM $ 130 $ 136 $ 143 $ 155 $ 162 26 %
Supplemental Worldwide Net Sales:
Media $ 3,958 $ 3,660 $ 4,153 $ 6,009 $ 4,710 19 %
Media — Y/Y growth, excluding F/X 13 % 20 % 19 % 14 % 19 % N/A
Media — TTM $ 15,417 $ 16,202 $ 17,005 $ 17,779 $ 18,531 20 %
Electronics and other general merchandise $ 5,588 $ 5,894 $ 6,316 $ 10,913 $ 7,975 43 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 57 % 62 % 54 % 47 % 43 % N/A
Electronics and other general merchandise — TTM $ 20,439 $ 22,845 $ 25,191 $ 28,712 $ 31,098 52 %
Electronics and other general merchandise — TTM % of WW net sales 55 % 57 % 58 % 60 % 60 % N/A
Other $ 311 $ 359 $ 407 $ 509 $ 500 61 %
Other — TTM $ 1,075 $ 1,231 $ 1,398 $ 1,586 $ 1,775 65 %
Balance Sheet
Cash and marketable securities $ 6,881 $ 6,355 $ 6,326 $ 9,576 $ 5,715 (17 %)
Inventory, net — ending $ 2,888 $ 3,229 $ 3,770 $ 4,992 $ 4,255 47 %
Inventory turnover, average — TTM 11.6 11.3 10.8 10.3 10.4 (10 %)
Fixed assets, net $ 2,902 $ 3,470 $ 3,999 $ 4,417 $ 4,653 60 %
Accounts payable — ending $ 5,540 $ 5,721 $ 6,552 $ 11,145 $ 6,886 24 %
Accounts payable days — ending 66 69 72 74 62 (5 %)
Other
WW shipping revenue $ 330 $ 331 $ 360 $ 531 $ 461 40 %
WW shipping costs $ 786 $ 820 $ 918 $ 1,466 $ 1,129 44 %
WW net shipping costs $ 456 $ 489 $ 558 $ 935 $ 668 47 %
WW net shipping costs — % of WW net sales 4.6 % 4.9 % 5.1 % 5.4 % 5.1 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 37,900 43,200 51,300 56,200 65,600 73 %
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

Amazon.com, Inc.

Certain Definitions

Customer Accounts

  • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

  • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

  • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

Units

  • References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide – for example as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

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Verizon’s vitals: quarterly revenue up five percent to $28 billion, earnings of $1.7 billion

Thursday, April 19th, 2012
Verizon quarterly financials for Q1 2012

Verizon is rembering how to turn to subscribers into cash, reporting consolidated revenues up 4.6 percent year-over-year to $28 billion, and earnings of $1.7 billion — boosting earnings-per-share by 15 percent. By comparison, revenues were $27 billion in Q1 2012, and a mere $18 billion last quarter, which resulted in a $2 billion net loss. Big Red’s performance is now as strong as ever, with subscriber numbers up five percent to 93 million, and with 47 percent of those customers using insanely profitable devices called smartphones. And that new $30 upgrade fee hasn’t even kicked in yet.

Continue reading Verizon’s vitals: quarterly revenue up five percent to $28 billion, earnings of $1.7 billion

Verizon’s vitals: quarterly revenue up five percent to $28 billion, earnings of $1.7 billion originally appeared on Engadget on Thu, 19 Apr 2012 07:33:00 EDT. Please see our terms for use of feeds.

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‘iPhone frenzy’ to drive huge Q1 for Apple

Wednesday, January 18th, 2012

By all accounts, Apple is preparing to report the biggest quarter in the company’s storied history on January 24th, fueled by solid Mac sales, strong iPad demand and unprecedented iPhone sales. And despite Wall Street’s high expectations, a number of analysts are still expecting Apple to beat the Street when it reports its first fiscal quarter earnings next Thursday. RBC Capital Markets’s Mike Abramsky on Wednesday told clients that an “iPhone frenzy” in Apple’s December quarter will result in a solid first-quarter beat, and the analyst raised his target on Apple stock as a result. Read on for more.

Abramsky sees Apple reporting revenue of $40.2 billion for the first fiscal quarter, representing 50% growth over the December quarter in 2010, with earnings of $11.00 per share. Wall Street is expecting Apple to report $38.7 billion in revenue and EPS of $9.95.

RBC estimates that Apple shipped 32 million iPhones in the first quarter, including 8.5 million iPhones shipped to AT&T, 4.2 million shipped to Verizon and 1.5 million units shipped to Sprint, and another 17.8 million iPhone shipped internationally. Abramsky notes that end user sales were solid as well, with “unprecedented iPhone sell-through,” and “stockouts in multiple regions.”

The firm also sees Apple having shipped 13 million iPads in the first quarter along with 5.1 million Mac computers. In the second fiscal quarter, Abramsky is looking for guidance of $32 billion in revenue and earnings of $8.00 per share while the Street’s consensus sits at $31.8 billion and $7.94. He also reiterated his Outperform rating on Apple stock and raised his price target to $525 from $500.

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‘iPhone frenzy’ to drive huge Q1 for Apple

Wednesday, January 18th, 2012

By all accounts, Apple is preparing to report the biggest quarter in the company’s storied history on January 24th, fueled by solid Mac sales, strong iPad demand and unprecedented iPhone sales. And despite Wall Street’s high expectations, a number of analysts are still expecting Apple to beat the Street when it reports its first fiscal quarter earnings next Thursday. RBC Capital Markets’s Mike Abramsky on Wednesday told clients that an “iPhone frenzy” in Apple’s December quarter will result in a solid first-quarter beat, and the analyst raised his target on Apple stock as a result. Read on for more.

Abramsky sees Apple reporting revenue of $40.2 billion for the first fiscal quarter, representing 50% growth over the December quarter in 2010, with earnings of $11.00 per share. Wall Street is expecting Apple to report $38.7 billion in revenue and EPS of $9.95.

RBC estimates that Apple shipped 32 million iPhones in the first quarter, including 8.5 million iPhones shipped to AT&T, 4.2 million shipped to Verizon and 1.5 million units shipped to Sprint, and another 17.8 million iPhone shipped internationally. Abramsky notes that end user sales were solid as well, with “unprecedented iPhone sell-through,” and “stockouts in multiple regions.”

The firm also sees Apple having shipped 13 million iPads in the first quarter along with 5.1 million Mac computers. In the second fiscal quarter, Abramsky is looking for guidance of $32 billion in revenue and earnings of $8.00 per share while the Street’s consensus sits at $31.8 billion and $7.94. He also reiterated his Outperform rating on Apple stock and raised his price target to $525 from $500.

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Origin PC boosts Genesis factory clock to 5.7GHz, reveals new EON gaming laptop design

Tuesday, January 10th, 2012

Origin PC has been spitting out 5.2GHz Genesis desktops for a few months already, but apparently some people wanted more. Thanks to a new ‘Phase Change’ cooling system that’ll be available from late Q1, they’re about it get it: a Core i7 2700K system factory clocked to 5.7GHz. Cooling controls and temperature displays will help you to establish the proper balance of power and pollution, while lifetime technical support (which now applies to all Origin PCs in the US) is just a phone call away in case you need to share the rush. There’s even an X79 mobo inside, offering scope for a Sandy Bridge E upgrade, plus NVIDIA’s GeForce GTX 580 in four-way SLI. Origin has a little something for portable gamers too: a refreshed A-panel on the EON17-S and EON15-S laptops to help you strike the right note of grinning malice in front of your LAN victims. It’s not yet clear how these updates will affect pricing, but there are plenty of clips on YouTube that’ll show you how to smear thermal paste on your credit cards. Full PR after the break.

Continue reading Origin PC boosts Genesis factory clock to 5.7GHz, reveals new EON gaming laptop design

Origin PC boosts Genesis factory clock to 5.7GHz, reveals new EON gaming laptop design originally appeared on Engadget on Wed, 11 Jan 2012 00:01:00 EDT. Please see our terms for use of feeds.

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Samsung may exit netbook business in 2012

Tuesday, November 29th, 2011

Samsung is considering an exit from the low-margin netbook business as soon as next year according to a recent report. French CNET blog Blogeee claims to have obtained an email sent by the South Korea-based electronics giant to several of its partners. “Following the introduction of our new strategy in 2012, we stop the product range in 10.1” (Netbook) in Q1 2012 for the benefit of Ultraportables products (11.6 and 12 inches) and ultrabooks to be launched in 2012,” the email reportedly stated (machine-translated). The matter could be one of semantics, however — Samsung’s “ultraportable” class may include low-cost notebooks driven by inexpensive ATOM processors. Samsung did not immediately respond to a request for comment.

Read

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HTC Edge may be the first quad-core smartphone to market

Monday, November 7th, 2011
Color us skeptical on this one, but rumors are coming down the pipeline about an HTC phone called the Edge. It’s supposedly going to be the first Tegra 3-powered smartphone. According to Pocketnow, the device will supposedly offer a quad-core 1.5GHz CPU, 4.7-inch 720p HD display, 1GB of RAM, an 8MP rear camera with f/2.2 lens and Beats Audio. Curiously, no LTE capability was mentioned specifically, though 21Mbps HSPA+ appears to be good to go, and there’s a slight possibility of Sense 4.0 being included — which given its proposed launch window of late Q1 / early Q2 2012, wouldn’t be a huge surprise. We’d love to start seeing more quad-core goodness headed our way, so we’re definitely keeping our fingers crossed to see a lot more of the above show up at CES and MWC.

HTC Edge may be the first quad-core smartphone to market originally appeared on Engadget on Mon, 07 Nov 2011 20:53:00 EDT. Please see our terms for use of feeds.

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Nielsen: AT&T smartphone users more likely to be satisfied than users on other carriers

Wednesday, September 28th, 2011

A recent Mobile Insights report from research firm Nielsen suggests that AT&T customers are more satisfied with their phones than any other carrier customer in the United States. “Nielsen’s results reinforce that our customers have the highest device satisfaction compared to all carriers,” AT&T Mobility chief marketing officer David Christopher said. “Our data shows that as of the second quarter this year, about half of our postpaid customers had smartphones — more than any other wireless provider — and this trend shows no signs of slowing down.” Christopher attributed AT&T’s success to its wide selection of smartphones, the ability to talk and surf at the same time, a large network of Wi-Fi hotspots and its developing HSPA+ “4G” network. Read on for the full press release from AT&T.

Study Reveals AT&T Smartphone Customers More Likely to be Satisfied With Their Devices

DALLAS, Sept. 27, 2011 /PRNewswire/ — More smartphone customers choose AT&T* and now a study from market research leader Nielsen shows that across the nation AT&T smartphone owners are more satisfied with their handsets than similar subscribers of other major wireless carriers. The findings are reported in the Nielsen Mobile Insights Study, Q1 and Q2 2011, and are consistent with other independent, third-party smartphone research.

“Our data shows that as of the second quarter this year, about half of our postpaid customers had smartphones — more than any other wireless provider — and this trend shows no signs of slowing down,” said David Christopher, chief marketing officer, AT&T Mobility and Consumer Markets. “Nielsen’s results reinforce that our customers have the highest device satisfaction compared to all carriers. Whether a customer is upgrading to a new model or selecting their very first, they can depend on us for a superior smartphone experience.”

Christopher said more smartphone customers are choosing AT&T for its:

  • Smartphone selection: AT&T offers award-winning Android smartphones – including the Motorola ATRIX™ 4G (named the best smartphone at CES) and the LG Thrill 4G (among the best smartphones in the CTIA E-Tech awards) – and the largest lineup of BlackBerry and Windows Phone devices. Since February, AT&T has introduced 10 Android smartphones and two new Android tablets, including the first smartphone with a 4.5-inch display and dual-core processor, with more planned in 2011.
  • International roaming: AT&T’s wireless customers enjoy a robust selection of world phones and discounted data, messaging and voice packages, along with the broadest global coverage of any U.S. wireless provider. With voice service in more than 220 countries, AT&T customers can travel around the globe and make and receive calls on the same wireless number they use at home.  AT&T also offers data roaming service (email, web browsing) in more than 205 countries, including 3G in more than 145, including Japan and South Korea. AT&T customers can also choose a service on more than 140 major cruise ships. In fact, AT&T has more than twice as many smartphone customers using phones that enable calls outside the U.S. than other major wireless carriers.
  • Talk and surf: The ability to talk and surf at the same time on a smartphone is one of the key advantages of the AT&T mobile broadband network, providing customers the convenience of simultaneously talking with friends and family while checking Facebook or looking for directions to a restaurant. For enterprise customers, it enables employees to be more efficient and responsive to clients and colleagues while on-the-go.
  • Mobile To Any Mobile: AT&T offers unlimited mobile calling to any mobile number in America to customers with an unlimited messaging plan and a qualifying voice plan. Introduced in February, Mobile To Any Mobile brings added value and flexibility to the lives of customers and helps them stay connected to the people they want to talk to, when they want to talk, without the hassle of tracking minutes remaining. Additionally, when you include Rollover Minutes — a benefit available exclusively from AT&T that lets customers keep their unused minutes for all domestic calls, including to landline numbers — it’s clear that AT&T offers the most value in the industry.
  • 4G: AT&T has deployed HSPA+ across its network and is currently deploying LTE to provide much faster mobile broadband speeds to customers with compatible devices, including the recently launched HTC Jetstream.  As additional 4G devices are introduced, AT&T customers will have even more opportunity to take advantage of the network – already recognized by leading industry analyst firm Frost & Sullivan with the 2011 North American Product Line Strategy Award in the Mobile Network Market, stating, “AT&T’s wireless network strategy will undoubtedly benefit its customers, who will have access to faster speeds, even when outside an LTE coverage area.”  A recent analysis of AT&T’s new LTE network was proclaimed, “The fastest cellular connection we’ve ever seen.”
  • Nation’s largest Wi-Fi network**: With nearly 27,000 hotspots in the U.S. and with access to more than 190,000 hotspots globally through roaming agreements, AT&T supports more Wi-Fi capable smartphones than any other major carrier. Customers with qualifying smartphone, broadband and LaptopConnect plans can connect at no extra cost and automatically switch between AT&T’s mobile broadband network and AT&T Wi-Fi.
  • Specialized customer care: AT&T has a history of offering excellent customer service. To ensure customers experience success and ease-of-use with their smartphone, AT&T has initiatives in place to quickly and directly address the smartphone customer’s needs – from the point of purchase to continuing support. For example, Retail representatives are required to complete extensive training on AT&T’s device portfolio, including all major operating system improvements and changes. Additionally, programs such as ‘Quick Start’ provide remote access support for all smartphones, netbooks, tablets and microcells sold in AT&T stores.

For more information visit att.com.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

** Largest based on company branded and operated hotspots. Access includes AT&T Wi-Fi Basic. A Wi-Fi enabled device required. Other restrictions apply. See www.attwifi.com for details and locations.

4G speeds delivered by HSPA+ with enhanced backhaul. Available in limited areas.  Availability increasing with ongoing backhaul deployment. Requires 4G device. Learn more at att.com/network.

Source: The Nielsen Company estimation based on an independent survey of 135,469 mobile phone users in 103 markets between January 2011 and June 2011. Copyright 2011 The Nielsen Company

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Report: Foxconn’s Brazil factory ready for business, will begin shipping iPads in December

Friday, September 16th, 2011

It appears that Apple is about to expand its manufacturing operations to Brazil, where a new Foxconn factory is already in place and ready to churn out iPads, according to a report from national media outlet UOL. Aolizio Mercadante, the country’s minister of science and technology, confirmed the news this week during a hearing held by the Commission of Economic Affairs. “At first many doubted, but it will be the first time that [Apple] will produce iPads outside Chinese territory,” Mercadente said. “We are taking a big step for digital inclusion in the country.” Located in Jundiaí, the new facility was constructed under a joint venture between Foxconn and the Brazilian government, with the former reportedly contributing $12 million to the initiative. Rumors of a South American expansion began circulating earlier this year, with many expecting Foxconn’s Brazil-based operations to get underway during Q1 of 2012, according to DigiTimes. Construction, however, appears to have wrapped up ahead of schedule, with Mercadante claiming that iPad shipments will begin in December. Apple, for its part, has not commented on the report.

Report: Foxconn’s Brazil factory ready for business, will begin shipping iPads in December originally appeared on Engadget on Fri, 16 Sep 2011 06:15:00 EDT. Please see our terms for use of feeds.

Permalink DigiTimes, PC Mag  |  sourceUOL (Portuguese)  | Email this | Comments

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ASUS Eee Slider update: 16GB gone, 32GB model in September, 3G edition in 2012

Monday, August 1st, 2011

You know, it wouldn’t even bother us if it didn’t look so amazing. But alas, the Eee Slider from ASUS is easily one of the most anticipated Honeycomb tablets around, and our unending love for the since-departed HTC Advantage ensures that the flame for this guy will keep burning, too. Just a few weeks after hearing from ASUS’ UK branch that the Slider was being delayed until ‘autumn,’ in flies word from The Netherlands that we may be able to fix our gaze on September. Based on reports from Tablets Magazine, the 16GB model will be canned altogether in favor of a lone 32 gigger, which should sell for €499 across the pond. As for the 3G-enabled variant? We aren’t apt to see that surface until Q1 2012. It’s tough to pinpoint the reason for the holdup, but our guess is software — earlier in the week, a hands-on video emerged showcasing the Slider with Android 3.1, paying particular attention to the newfound USB accessory support. Have a gander at the video just past the break, and feel free to console one another in comments.

Continue reading ASUS Eee Slider update: 16GB gone, 32GB model in September, 3G edition in 2012

ASUS Eee Slider update: 16GB gone, 32GB model in September, 3G edition in 2012 originally appeared on Engadget on Mon, 01 Aug 2011 03:34:00 EDT. Please see our terms for use of feeds.

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Ultrabooks to start arriving in September, more expensive than expected

Wednesday, July 27th, 2011
ASUS UX21

Looks like those skinny Ultrabooks Intel was trying to sell us on at Computex will all be hitting the market at roughly the same time. Despite earlier suggestions that HP would beat ASUS’s planned September launch, DigiTimes reports the Palo Alto company’s Air competitor may not actually ship until as late as Q1 of 2012, thanks to LCD supply issues. Those problems scoring enough panels are also holding up similar systems from Acer and Dell. To make matters worse, it seems those promised sub $1,000 price points were a bit optimistic. ASUS told the Taipei Times that its UX line would only be able to hit such a price using slower Core i3 chips — upgrading to a Core i5 and sticking in an SSD would push the price towards the $2,000 mark.

[Thanks, Marco]

Ultrabooks to start arriving in September, more expensive than expected originally appeared on Engadget on Wed, 27 Jul 2011 15:54:00 EDT. Please see our terms for use of feeds.

Permalink Notebook Italia (translated)  |  sourceTaipei Times, DigiTimes  | Email this | Comments

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IMS: Annual smartphone sales to reach 1 billion units by 2016; Apple, Samsung winners so far

Wednesday, July 27th, 2011

More than 420 million smartphones will be sold around the world in 2011, accounting for 28% of total cell phone sales according to market research firm IMS Research. The firm sees the recent surge of more affordable smartphones as playing a major role in the continued growth of the market, and IMS analysts estimate that global smartphone sales will reach 1 billion devices by 2016 thanks to entry-level smart handsets. In recent months however, IMS’ data shows that Apple has made some of the largest gains in the space, accounting for 19% of global smartphone sales in the first quarter of 2011 compared to 16% in the same quarter last year. Of course Apple’s share continued to climb in the second quarter as well, as the company reported industry-leading sales of 20.4 million smartphones. The only company that made more impressive unit sales gains year-over-year in the first quarter was Samsung according to IMS; the South Korea-based vendor accounted for 13% of smartphones sold in the first quarter compared to just 3% in the same quarter in 2010. The biggest losers in the first quarter were Nokia, which slid from a 40% share in the first quarter last year to 24% in Q1 2010, and RIM, which dropped from 20% to 15% over the same period. The firm’s full press release follows below.

Global Smartphones Sales Will Top 420 Million Devices in 2011, Taking 28 Percent of all Handsets, According to IMS Research

Apple and Samsung see Strongest Growth as Nokia Fades

Austin, TX, July 27, 2011 – Sales of smartphones will exceed 420 million devices in 2011, accounting for nearly 28 percent of the entire global handset market, according to IMS Research, the leading independent provider of market research and consultancy to the global electronics industry. With the introduction of more affordable “entry-level” smartphones, IMS Research predicts that annual sales will surpass one billion devices by the end of 2016, accounting for one of every two mobile handsets sold.

“But despite the higher margins for smartphones, and the seemingly insatiable consumer appetite for converged devices, it is clear that not all OEMS are equally positioned to capitalize on this market trend,” says Josh Builta, analyst in IMS’ Mobile Technologies Group. “For instance, LG, despite being the third largest OEM in the world, has offered a fairly limited smartphone portfolio in recent years, a factor that resulted in the company reaching less than a three percent share of the total smartphone market in 2010.”

At the same time Nokia saw its portion of smartphone market decline so dramatically that in early 2011 the company dropped the Symbian platform in favor of Microsoft’s Windows Phone OS. In 2Q 2011, Nokia reported smartphone sales fell to 16.7 million, down 34 percent from the same period in 2010.

“Clearly one of the key dynamics of the mobile handset competitive environment in recent years has been the inability of many traditional market leaders to recognize and adjust to the growing smartphone tier,” adds Builta, “The reasons for these failures vary and include everything from poorly designed and manufactured devices, unsatisfactory user interfaces, and portfolios that don’t offer products with a differentiating feature. These lapses have created opportunities for newer entrants to the market, which they have aggressively pursued.”

In recent years, no company has flourished in this environment as much as Apple. Apple’s 2Q 2011 results in which it reported record sales of more than 20 million iPhones indicates it can be expected to remain an influential presence in the market despite the increased competition.

However, Apple is not alone in its success. Of the traditional handset manufacturers, Samsung has demonstrated the best results in recent years. Capitalizing on its diverse portfolio – which includes devices using the company’s own bada operating system along with Android and Windows Mobile – as well as its highly popular Galaxy series, Samsung smartphone market share increased from about three percent in 1Q 2010 to over 13 percent in 1Q 2011. At the same time smaller, dedicated smartphone vendors such as HTC have seen their position rise dramatically.

According to Builta, “These companies are well positioned to benefit from the projected growth of the smartphone market in the future. Though the other OEMs are stepping up their efforts in the space, companies such as Apple, HTC and Samsung have a considerable amount of momentum. Catching them will not be an easy task.”

IMS Research examines and tracks quarterly handset and smartphone market shares in its Mobile Handset Market Intelligence Service & Database. A valuable tool for companies requiring 24/7 access to the most up-to-date information on the mobile market, this service also provides up-to-date information on cellular subscribers, handset shipments, and mobile handset feature penetration. Provided with the database access is the Quarterly Market report, which offers subscribers additional insight and analysis on recent developments in the mobile handset market.

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AMD earnings continue to drop despite record CPU sales, GPU business loses $7 million

Thursday, July 21st, 2011

AMD Earnings
Poor AMD. While Chipzilla just keeps shattering its own earnings records, the little company that could from Sunnyvale is struggling to chug its way uphill. Its total revenue of $1.57 billion represents a two-percent drop from the last quarter and five percent from the same time last year. Total profits fell from half a billion in Q1 to just $61 million. News was particularly bad at the graphics division which saw revenues plummet 11 percent from Q1. In total, the former ATI brand lost $7 million. It’s not all bad news, though — the company did ship a record number of mobile CPUs, won some awards, and increased its presence on the top 500 super computer list by 15 percent. That’s gotta count for something right?

[Thanks, Matt]

AMD earnings continue to drop despite record CPU sales, GPU business loses $7 million originally appeared on Engadget on Thu, 21 Jul 2011 18:02:00 EDT. Please see our terms for use of feeds.

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Nexflix coming to Spain and the UK next year?

Friday, July 15th, 2011

File this one in the unconfirmed-but-hopeful file, as Variety has it on good authority that Netflix could be making its first foray into European waters as early as Q1 2012. After taking Latin America by storm (and subsequently storming the wallets of plain ‘ole Americans), the company is purportedly lining up Spain and the United Kingdom for its next trick. Unnamed sources at “leading European film distributors” have confirmed that representatives from the company were looking to “put roots down” in both of those nations as soon as next year, and while Netflix itself is refusing to comment, it’s certainly a tale that’s easy to believe. ‘Course, breaking into the UK market won’t be as easy as it has been in other nations — Lovefilm already has a firm grip on the local rental market, but as your favorite capitalist always says, there’s never not room for increased competition. We’ll keep you posted.

[Thanks, Eric]

Nexflix coming to Spain and the UK next year? originally appeared on Engadget on Fri, 15 Jul 2011 15:41:00 EDT. Please see our terms for use of feeds.

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IDC: tablet shipments drop 28 percent in Q1 2011

Tuesday, July 12th, 2011
IDC: tablet shipments drop 28 percent in Q1 2011

Whether you believe we’re living in a post-PC world or not, there’s no denying the overwhelming growth of tablets in the past few years. Just this March, IDC put out figures saying 2010 saw the sale of 18 million tablets, but despite the recent boom, the outfit’s now reporting a 28 percent drop in tablet shipments in Q1 2011, bringing first quarter worldwide shipments to 7.2 million. IDC’s latest report points to “slower consumer demand, overall economic conditions, and supply-chain constraint,” but nonetheless estimates that total tablet sales will reach 53.5 million by year’s end, up from IDC’s original estimate of 50.4 million. Once again, Apple’s come out on top of the slate game, with the iPad 2 leading the market, despite its own dip in shipments. E-readers have apparently also seen a decline in the first quarter, with shipments dipping to 3.3 million units. Despite a slow start to the year, however, IDC’s optimistic about future sales, but you don’t have to take our word for it — full PR awaits you after the break.

Continue reading IDC: tablet shipments drop 28 percent in Q1 2011

IDC: tablet shipments drop 28 percent in Q1 2011 originally appeared on Engadget on Tue, 12 Jul 2011 21:03:00 EDT. Please see our terms for use of feeds.

Permalink Tech Digest  |  sourceIDC  | Email this | Comments

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RIM responds to open letter published by BGR

Thursday, June 30th, 2011

RIM on Thursday released its response to an open letter published exclusively by BGR. The letter, which was written by a senior RIM executive, pleads with the company’s upper management to make some drastic changes if it is to regain the mind share and market share it has lost in recent years. After questioning the authenticity of the letter — and we assure you, it is indeed genuine and its author has been vetted — RIM said the company is “fully aware of and aggressively addressing both the company’s challenges and its opportunities.” The response goes on to take an extremely defensive stance, listing various reasons that RIM is still in a strong position. The company also says its management is taking its current challenges seriously during this transitional period. “The company is thankfully in a solid business and financial position to tackle the opportunities ahead with a solid balance sheet (nearly $3 billion in cash and no debt), strong profitability (RIM’s net income last quarter was $695 million) and substantial international growth (international revenue in Q1 grew 67% over the same quarter last year). In fact, while growth has slowed in the US, RIM still shipped 13.2 million BlackBerry smartphones last quarter (which is about 100 smartphones per minute, 24 hours per day) and RIM is more committed than ever to serving its loyal customers and partners around the world,” the response concludes. RIM’s statement can be read below in its entirety.

An “Open Letter” to RIM’s senior management was published anonymously on the web today and it was attributed to an unnamed person described as a ‘high level employee”. It is obviously difficult to address anonymous commentary and it is particularly difficult to believe that a “high level employee” in good standing with the company would choose to anonymously publish a letter on the web rather than engage their fellow executives in a constructive manner, but regardless of whether the letter is real, fake, exaggerated or written with ulterior motivations, it is fair to say that the senior management team at RIM is nonetheless fully aware of and aggressively addressing both the company’s challenges and its opportunities.

RIM recently confirmed that it is nearing the end of a major business and technology transition. Although this transition has taken longer than anticipated, there is much excitement and optimism within the company about the new products that are lined up for the coming months. There is a fundamental business reality however that following an extended period of hyper growth (during which RIM nearly quadrupled in size over the past 5 years alone), it has become necessary for the company to streamline its operations in order to allow it to grow its business profitably while pursuing newer strategic opportunities. Again, RIM’s management team takes these challenges seriously and is actively addressing the situation. The company is thankfully in a solid business and financial position to tackle the opportunities ahead with a solid balance sheet (nearly $3 billion in cash and no debt), strong profitability (RIM’s net income last quarter was $695 million) and substantial international growth (international revenue in Q1 grew 67% over the same quarter last year). In fact, while growth has slowed in the US, RIM still shipped 13.2 million BlackBerry smartphones last quarter (which is about 100 smartphones per minute, 24 hours per day) and RIM is more committed than ever to serving its loyal customers and partners around the world.

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Vizio extends its LCD HDTV sales lead; new 3D, VIA Plus and ultrawidescreen TVs are on the way

Wednesday, June 22nd, 2011

We already took a fresh look at the Vizio Tablet due this summer, but the company’s main business is HDTVs and there it’s on top of US LCD sales again, with more than 20 percent of the market in Q1. Of the top five selling TVs in Q1, four are Vizios priced at $698 or less, while the other is a $1,699 MSRP Samsung LCD. Vizio launched its lower end E3D line earlier this year, the next series on the way are edge-lit M3D models due in August and September that up the refresh rate to 240Hz, come with four pairs of passive 3D glasses instead of two and have a Bluetooth remote. Up next, the 21:9 ultrawidescreen sets we saw at CES are real and will ship in October as the Cinemawide series in 2560×1080 58- and 50-inch models. Finally, the top of of the line XVT 6 series will feature the new VIA Plus Google TV platform and are going to be available in 47- and 55-inch sizes, but won’t ship until December There’s still no prices for any of these yet, but we’re going to guess they’ll go low as they usually do. Check the press release for all the details after the break including a glancing mention of the Vizio Phone.

Continue reading Vizio extends its LCD HDTV sales lead; new 3D, VIA Plus and ultrawidescreen TVs are on the way

Vizio extends its LCD HDTV sales lead; new 3D, VIA Plus and ultrawidescreen TVs are on the way originally appeared on Engadget on Wed, 22 Jun 2011 10:52:00 EDT. Please see our terms for use of feeds.

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