MacDailyNews - Where Mac news comes first

Jan 24, 08 - 10:17 am Comment from: Connor MacBook

tv, that is

chump change I wish i had more money to buy a bag of Apples right about now :(

-Pi

Jan 24, 08 - 10:21 am Comment from: mike_in_helsinki

I have stated this very fact to many-a-friend. It is very, very important to consider it.

If Apple were like other companies and recognized it all in the same quarter, Apple would have blow away both earnings and forecasts considerably more.

When the market wakes up to this, it will matter.

Jan 24, 08 - 10:21 am Comment from: TowerTone

I also deferred a billion.....dreams.

Jan 24, 08 - 10:21 am Comment from: Ampar

Stephen Rosenman refers to TV as iTV several times in the original article. Has he been in a coma? Similarly, Jennifer Westhoven on CNN kept referring to "Apple Computer" several days ago. There is a lot of sloppy reporting in mainstream media and even more sloppiness on blogs which keep getting more attention.

Jan 24, 08 - 10:29 am Comment from: TowerTone

Amp
Now you know how those serving in Iraq feel.
First requirement of reporting: get the facts.
Second requirement: relay them honestly.

Jan 24, 08 - 10:37 am Comment from: Buster

So what! Big deal. I am currently working on my second billion!




(I gave up on the first).

...AAPL did 1 billion dollars of deferred revenue, money that will be gradually added in quarter after quarter over a 2 year period...

2 years is also the AppleCare extended warranty coverage.

Beleive me, Apple shells out a lot of money in repairs and Apple Care workers salaries.

This is mainly the reason why Apple sticks to all in one devices, has been closing off sections of the Mac Pro to reduce customer tampering.

You see with PC's there is a whole industry of third party support buisnesses. With Mac's there isn't, although it is growing somewhat.

So Apple does everything it can to eliminate/reduce repairs and support costs. It is in it's best interests to make a safe and secure OS, reliable hardware etc. Unlike Windows PC's.

Now only if OS X could run Windows in a "shell", safe from the internet and the results of malware attacks.

Jan 24, 08 - 10:49 am Comment from: Demon

NBC reported that Apple had a bad holiday quarter with slow sales. I sent them a copy of Apples record breaking sales numbers and recommend they fire their financial reporter for getting the facts all wrong.
But, Apple breaking sales records and having the best holiday quarter didn't play into there doom and gloom recession story so, they had to skew it so, it did.

Jan 24, 08 - 10:54 am Comment from: Ampar

"Now you know how those serving in Iraq feel."

I really don't but I get your point. Ratings over accuracy is shameful. I have no doubt that some misreporting (on both sides of the fence) is deliberate especially with regards to politics.

So NBC has an agenda to make things look a lot worse than they really are. Gee, imagine that. You'd think we were on the verge of the Great Depression by listening to what these biased morons in the media are spouting off these days.

This writer types APPL as well???! Crazy! Do these guys know what they are talking about?

Isn´t deferred revenue such as this a negative?
Apple is acknowledging problems with its product and keeping money (lots of it) in reserve to handle returns and other repairs and defects.
On the flip side if Apple knew it was going to have no major problems with its products why not claim it all on the current balance sheet?
Not good.

Jan 24, 08 - 11:05 am Comment from: Ampar

And I could have done without seeing Heath Ledger or Anna Nicole Smith in a body bag. Was that really necessary in reporting the story? The networks would probably broadcast autopsies if they thought they could get away with it.

Jan 24, 08 - 11:12 am Comment from: Macromancer

"You'd think we were on the verge of the Great Depression by listening to what these biased morons in the media are spouting off these days."

It's funny how people consistently call the media 'liberal' or biased when ALL media is owned by huge multinational corporations, that have a lot to lose if the economy sinks.

"Isn´t deferred revenue such as this a negative?
Apple is acknowledging problems with its product and keeping money (lots of it) in reserve to handle returns and other repairs and defects."

Actually, what you are looking is Tax law, tax rules, and trying to maximize your real profit. I do not believe defered income is taxable until you "realize" it. Just a thought.

en

Jan 24, 08 - 11:17 am Comment from: MACAcctProf

Deferring revenue of this type is not Apple's choice, but is required of all publicly traded C\corporations by the Financial Accounting Standards Board and the SEC. They can only recognize revenue that for which the earnings process has been completed.

A new TV Show - Autopsies of the Rich and Famous. Brilliant.

Jan 24, 08 - 11:34 am Comment from: ron

"Macromancer, It's funny how people consistently call the media 'liberal' or biased when ALL media is owned by huge multinational corporations, that have a lot to lose if the economy sinks."

The M.S. media is very lib biased, as are the unholywood crowd, who also have a lot to lose in a bad economy. I hope the writers' strike continues, so that some of the vile and violent crap being spewed out takes longer to hit the airwaves.

Jan 24, 08 - 11:46 am Comment from: DogGone

@Old Man - Virtualization lets you run windows in a shell already. It can't touch the Mac OSX base system. If it goes bad you can always have a back up image to work from.

One advantage of deferred revenues is that in 1.5 years time, Apple will receive revenues for the previous two years (ie 24 payments x 1/24 revenue for each month). This could turn out to be a sizable chunk of change and guarantee Apple revenue for services sold in the past. As more iPhones and TVs etc are sold the value of this is increase substantially.

Jan 24, 08 - 11:53 am Comment from: Ampar

"Autopsies of the Rich and Famous"

But sadly, you might get D or Z listers volunteering to be on the show just to get publicity. Next up, the cast of Saved By The Bell and Survivor: All-Stars as you've never seen them before.

Jan 24, 08 - 12:04 pm Comment from: DLMeyer

ron said, The M.S. media is very lib biased, as are the unholywood crowd, who also have a lot to lose in a bad economy. I hope the writers' strike continues, so that some of the vile and violent crap being spewed out takes longer to hit the airwaves.
You mean like the ultra-left-wing "24" and such? Or anything spewing out of "Fox Noise"? Maybe you mean the commies on ESPN?
Comments such as yours indicate your own personal lack of depth, lack of understanding, lack of empathy for others. Our enemies count on your weaknesses to win for them. And they DID win - the minute the "Patriot Act" was passed into law. And again every time some Jack Bauer wanna-be turned away from established American principles to perform senseless acts of torture on the guilty and innocent alike. YOU, sir, are The Enemy of Freedom and Justice we need to be fighting. You are The Enemy Within.
</rant>

Jan 24, 08 - 12:10 pm Comment from: ron

DLMire,
"YOU, sir, are The Enemy of Freedom and Justice we need to be fighting. You are The Enemy Within."
</rant>

Hahahahahaha!

Jan 24, 08 - 12:12 pm Comment from: Zune Tang®

@ ron

Why don't you start a blog? You have really witty, insightful and interesting things to say. Keep posting too. Good stuff.

Your potential. Our passion.™

Jan 24, 08 - 01:23 pm Comment from: blucaso

Best Zune Tang post EVER! :D

Jan 24, 08 - 02:00 pm Comment from: MCCFR

ZT,

The reason Ron hasn't started a blog is because he's only allowed access to a computer when there's a mental health professional who can supervise.

The idea that, after the "mainstream media" acted as a cheerleader for this administration's illegal and unwarranted invasion of Iraq or the travesty that was ABC/Disney's "The Road To 9/11" (or whatever it was called), that the MSM is dominated by liberals is, with the best will in the world, utter balderdash.

It took at least six years for this administration's press corps to finally start asking some probing questions about the honesty and integrity of this administration (esp. Cheney and Rove), which coincided with the turning of public opinion in the run-up to the mid-terms.

No administration of whatever stripe should have a lick-spittle media that has less curiosity and intellect than a King Charles Cavalier Spaniel; in the absence of real checks and balances, the media – as was proven by Watergate and Murrow's opposition to McCarthy - is the only safeguard when the Executive Branch tries to manipulate support by using fear and hysteria.

I've been pointing out Apple's deferred revenues in a number of posts here, since earnings. They are NOT to cover red rings of death, like MS's Xbox 360, they are to meet the new accounting standards. Revenues where services are provided over time, must have revenue recognized over time. So, an iPhone generally comes with a 2-yr contract. The revenue is then recognized over 2 years, etc. This is also why the iPod Touch requires $20 for the upgrade why the AppleTV and iPhone do not. The Touch's revenue is not being recognized over time, while the others are. Accounting rules require that new services be paid for.

Now, look at the iPhone. If you sell 2.3M units this past quarter, that should add just over $1B in revenue, but it didn't. It added only 1/8th of that amount. The other 7/8ths are recognized in the next seven quarters.

Can you imagine if Apple had reported $10.5B in revenues and not $9.6B? Because $10.5B is what they sold.

And, he's right, Apple added $3B to its cash position, while only adding $1.6B in income. The $900M in deferred income is a large part of the gap. It's only $900M, as that's 7/8ths of the $1B. Apple recognizes 1/8th.

The other tidbit you can pick up from Apple's conference call and financials is that based upon the deferred income number from this quarter and last, you can figure that Apple gets $450 for each iPhone, including fees from AT&T;, over the two years.

Jan 24, 08 - 02:17 pm Comment from: ron

MDN, frequented and fermented by libs. Only a few here who are on the 'Right' track.

Jan 24, 08 - 03:24 pm Comment from: Bluefin

@ Wallace

No, GAAP (Generally Accepted Acct Principles) require that in tech, if you expect software upgrades, you must book aportion of the sales price to cover the value of the upgrade.
There was a stink about having hidden features, and sending an upgrade to unlock the features, without accounting for it.

Apple is trying to account for it.

Jan 24, 08 - 07:00 pm Comment from: MCCFR

Presumably, that's the "Right" track that saw the the US public debt increase to $9 trillion from $5.6 trillion at the end of the Clinton administration.

Remind me, Ron. When Clinton left office, what was the public debt's percentage of GDP? How come Truman through Carter (including Ford and Nixon) managed to wipe out the debt caused by WWII (despite fighting the Korean and Vietnam wars) and the administrations that followed – including Reagan and Bush Jr. – have wound it back up again to around two-thirds of GDP?

What was that about Republicans, conservatives and small government?

Maybe all of that doesn't matter if someone else's children are going to land up paying for it; over $28,000 for every man, woman and child in the US as it currently stands.

Is it the "Right" track that around 30% of general taxation goes on defence spending, and 19% goes on interest? Is it the "Right" track that the Federal government now routinely "steals" money from the Social Security trust fund (leaving IOUs that will never be paid back).

So that deals with the myth of Republican fiscal conservativism.

The truth is that the Republican "Right" is taking the US to fiscal bankruptcy, whilst being morally bankrupt itself: it has allowed the US to become associated with illegal wars, torture, environmental ignorance, contempt for science. In itself, it has used FUD to manipulate the population into accepting an erosion of personal liberties that would make the Founding Fathers spin in their graves.

Jan 24, 08 - 08:11 pm Comment from: LorD1776

MCCFR,

Well said. Thank you.

MCCFR,

Gloom and Doom, Gloom and Doom

I like pie

mw: college
apt, as usual

Jan 25, 08 - 01:06 am Comment from: ron

Go Romney!