Three Guys and a Podcast: Apple News & Analysis
Apple released their 2013 fiscal third quarter earnings this past Tuesday, and within Apple's report a surprisingly strong number emerged – iTunes revenue grew to $4 billion USD.
The iTunes figure was stronger than analysts had expected, and year over year sales growth climbed a solid 25%. At the same time Apple's China sales drew in a disappointing $4.9 billion.
During Apple's conference call, CEO Tim Cook pointed to iTunes and services frequently, while carrying a muted tone on China. Several factors in China may limit Apple growth in the future, not the least of which may be the Communist government themselves, repeatedly hammering Apple via their state run media during the last two quarters. Propaganda or not, the China's continued negative coverage appears to be taking a toll on Apple's sales in the region.
iTunes content sales for Apple is a different story. Apple's $4 billion consisted of iTunes software and services. Apple CFO Peter Oppenheimer pointed out that over 800,000 TV shows, and 350k movies were being downloaded per day. Considering Apple TV is not offering all-you-can-eat monthly services, the figures are impressive.
The barriers for Apple's continued growth in China could quickly become onerous, with situations well out of Apple's control. But the barriers for Apple growing its content and services wing of the company are limited only to what Apple chooses to spend. Apple ended the quarter with $146.6 billion in cash. A large portion of that cash resides outside the U.S. borders, but Apple can easily leverage their holdings to purchase any cable or content studio/s they wish should they meet any resistance.
If Apple chooses to dominate content distribution, through their own new methodology, they can do so. China, looms as a larger question mark with each passing quarter, and the smart money (and effort) for Apple is on a direction they can best control.
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