Apple Q2 Financial Report Analysis

All sequential quarterly sales dropped except for PowerBooks, a 64% increase, and for Japan, a 51% increase. In comparison with Q2 last year, all unit sales are down except for PowerBooks, a 87% increase, and retail store sales, a 75% increase.

Portable sales really shone with 42% of the total Macs sold, a record for Apple. Sales of the new 12" Powerbook surged with 82,000 sold in the quarter which supassed the 15" PowerBook sales of 70,000. The new 17" PowerBook had 14,000 sales with many backorders.

iPod sales were 78,000 with about half going to Windows customers.

There are now 53 Apple retail stores which had over 3 million visitors (4,400 per store per week). Sales were $135 million, down from $148 million during the previous quarter which included the holiday season. The third "large format" store will open soon. The on line store was still very important with 46% of US sales.

Educational sales were down 14% year to year but again portable sales shone with 39% of all sales. That's well above the industry average of 21%. The "X for Teachers" program successfully put over 400,000 free copies of Mac OS X in teachers hands.

The most disappointing aspect was the continued decline in Power Mac sales despite the recent increase in performance and decrease in price. Apple CFO Fred Anderson cited continued economic pressures in the creative industry for this.

All in all not a bad quarter given the background economic conditions. Anderson predicted flat revenue for the third quarter, a decline in costs and a small profit. Also, as expected, he refused to answer questions about the Apple music rumors.