Currys and PC World 2-in-1 Superstore | Image courtesy of Dixons

So today we got the answer to a question that we’ve been pondering for a number of months and we got Tim Cook’s first major hire as the official CEO of Apple. But I for one am a little skeptical.

Apple’s former chief of retail announced last year that he would be departing Apple to become CEO of J.C. Penney. The loss of Ron Johnson at the time seemed like a huge deal, Apple’s retail stores have been a shining example of retail success and many of the stores themselves are an amazing example of crossing the paths of old architecture and a contemporary company.

I for one am a huge Apple Store fan, and I’m lucky enough to live not too far from my favourite Apple store in London’s Covent Garden. To me Apple’s retail stores really define how the company has changed, their growing size and pervasiveness reflects Apple’s growing size and its sometimes unwelcome foray into unfettered markets. But also the diversity of these stores reflects Apple’s diversity, not just in products but also in its people and of course the efficiency and the technological boundaries pushed within the walls of an Apple retail store are admired the around the world—think Easy Pay and personal pickup as just two amazing examples.

This success which can be witnessed with your own eyes can also be witnessed in Apple’s financials, during the last reported quarter individual store quarterly revenue was up 43 percent year-over-year to $17.3 million and during the quarter, which included the busy holiday shopping season, each store hosted 22,000 visitors per week.

All of this was in part Ron Johnson’s vision, with a heavy dose of Steve Jobs, and he put it into reality.

Today Apple announced that Tim Cook had hired someone to take over Johnson’s role as head of Apple’s retail chain, in charge of the look and feel and operations of over 300 stores worldwide and also scouting out new stores, helping in their design and bringing them to fruition.

John Browett Apple's Senior Vice Present of Retail

The man Cook chose was John Browett and as a resident of the UK I’m all too familiar with Browett’s work. Browett is the CEO of British brand Dixons which holds a large chain of stores across the country in the same name but also have stores under different brands, namely PC World, Currys.digital, Equanet and Dixons Travel as well as running the online Dixons.co.uk. Dixons also produce computers under the Advent Computer brand.

Before joining Dixons in 2007 Browett was CEO of of Tesco.com another big retail player in the UK part of the huge Tesco group.

For us British these brands are everywhere, high streets in every single town across the country will feature at least one of Dixons’ stores and they’re awful.

Stores like Currys.digital and PC World are the epitome of what Steve Jobs did not want Apple’s retail stores to be like. These stores are full to the brim with low quality, over priced products forced upon customers by retail staff who will then try and unload a whole bunch of accessories and software that is neither required or of any quality.

But Browett was CEO of Dixons, not directly in charge of the look, feel or quality of its retail stores and to be fair these stores have been on high streets for decades. As CEO Browett was in charge of operating the company and whilst Browett was brought on board to help redefine the retail mission he was occupied with guiding the huge retail chain through a devastating recession watching the stock price erode and profits dry up. In 2011 the company reported a reduction in profits again and the forecast wasn’t pretty, not something Apple is familiar with.

Browett doesn’t depart from Dixons until April 20, leaving Apple without a retail chief for several months more. Cook’s decision to hire Browett is interesting to say the least, Browett has not shown strong leadership at Dixons, despite being described as a huge loss there, and the retail stores are far from an example of good retail stores.

We’ll just have to wait and see how Browett performs at Apple over the next couple of years.

Apple today announced financial results for its first fiscal quarter of 2012 which ran from September 25 until December 31. The Company posted revenue of $46.33 billion and net quarterly profit of $13.06 billion, or $13.87 per diluted share. These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $* per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

During the quarter Apple also sold 5.2 million Macs representing a 26 percent unit increase over the year-ago quarter. Apple also sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter as well as 15.4 million iPods during the quarter, representing a 21 percent unit decline from the year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”

Earlier this month I wrote a short piece on Apple’s first fiscal quarter of 2012. The quarter which ran from September 25 until December 31 looks likely to be an all round record breaker for Apple. In that post I focused on Apple’s quarterly revenue and remarked on just how incredible the quarter looks on paper.

Today Apple will announce the results of Q112 and it’s not just revenue that will impress Wall Street. Apple is set to dazzle even the casual onlookers as the numbers are released.

Recapping the quarter is easy, as the period covers the holiday season the number of product releases are slim. During the quarter Apple began selling the iPhone 4S and by the end of the quarter was selling the iPhone in 61 countries including on three major carriers in the U.S. and for the first time ever available in the U.S. without a carrier contract. Software wise both iCloud and the associated iTunes Match service became available.

During Q112 Apple gave the iPod nano and iPod touch a minor update and gave a speed-bump to the MacBook Pro.

These changes to products led Apple into a strong holiday season and the sales look like they’ll match that expectation.

As ever, Fortune’s Apple 2.0 blog has given an excellent summary of what the professional and amateur analysts have been predicting.

The full table of number’s is available in today’s post “Our Apple Whisper Numbers”. Here’s a summary of those figures:

Apple offered guidance last quarter of $37 billion in revenue on EPS of $9.00. Gross margin was guided to be 40%.

Estimated and actual quarterly Apple sales revenue

Averaging analysts across the board the expectations are for revenue around $40 billion but could be as high as $45 billion on EPS of between $10 and $12.80.

When it comes down to actual product sales they shape up as follows:

• iPad: 11.7 to 19.5 million
• iPhone: 30 to 35 million
• Mac: 4.7 to 6.3 million
• iPod: 9 to 18 million

The figures are even more jaw dropping if you take in mind that Apple has never reported quarterly revenue over $30 billion, never mind $40 billion. Apple hasn’t sold over 5 million Macs before, the current record sits at 4.89 million.

Apple’s Q112 results will be available at the closing bell at 4.30 PM Eastern time, 1.30 PM Pacific or 9.30 PM in London. Apple will then host a conference call, which can listened to here, starting at 5 PM Eastern time, 2 PM Pacific or 10 PM in London.

iBooks Textbooks Category on iBookstore

Apple’s education-focused event held today in the Guggenheim Museum in New York City is over and it’s now time to take stock of what the company announced. What we saw today was almost exactly as we expected, some of the more nuanced details such as application names and such were off the mark but beyond that we saw nothing we didn’t expect and got everything we did.

Phil Schiller got up on stage and immediately began talking about how education is deep within Apple’s DNA and the iPad is starting to show that it can be a great tool for helping children learn. Schiller said that Apple constantly hears from teachers and parents about how the iPad is with special needs children.

There are already 1.5 million iPads within the U.S. education system, some 1,000 of them in one-to-one deployment. There are also over 20,000 education and learnings apps in the App Store for the iPad.

Apple is looking to further its involvement with education, Schiller paid particular attention to improving education for children of the U.S. noting that high school students in the U.S. that enter as freshman have only a 70 percent chance of graduating with that dropping closer to 60 percent in urban areas.

Schiller spent the hour long presentation laying out two initiatives to get iPads in the hands of more students to aid in their learning.

The first and most notable initiative is that Apple, as expected, is to enter the digital textbook market. With the release of iBooks 2 as a free download from the App Store for iPhone and iPad, students can now download textbooks from the iBookstore. These textbooks are highly interactive containing video, photos, and interactive diagrams but with iBooks 2 notation and highlighting has taken a big leap forward including a new feature allowing flash cards to be automatically made from notes.

iBooks 2 is a welcome improvement, upon initial use it appears quicker and smoother. The under-the-hood changes are clearly in place to allow compatibility with the textbooks and books that can downloaded from the iBookstore which can now feature content from Keynote, videos, audio, HTML5 and Javascript.

iBooks Author running on iMac | Image courtesy of Apple

To create these textbooks and interactive books (note that Apple never uses the term eBook) Apple has released for free via the Mac App Store a new application called iBooks Author. Looking like a cross between Pages and Keynote, iBooks author allows anyone to start creating a book or textbook. As you’d expect iBooks Author includes a number of templates and has Apple’s ease of use feel about it; elements snap in place, multimedia content is easy to insert and so on.

From the help file in iBooks Author here is the full list content that can be included:

• Gallery: Add a sequence of images your readers can swipe through, each with its own custom caption.
• Media: Add a movie or audio file readers can play.
• Review: Add a sequence of interactive multiple-choice or drag-to-target questions.
• Keynote: Add a Keynote presentation (exported as HTML).
• Interactive image: Use labels (sometimes called callouts), panning, and zooming to provide detailed information about specific parts of a graphic.
• 3D: Add a 3D COLLADA (.dae) file readers can rotate.
• HTML: Add a Dashboard widget (.wdgt).

Authors can publish their books or textbooks straight to the iBookstore from iBooks Author or can be previewed on the iPad without publication. Apple also says that you can distribute the book in “iBooks format” which doesn’t look like it is any form of recognised standard like ePub. A more detailed FAQ on publishing has been posted by Apple.

Of course iBooks 2 and all these changes and aspirations for education mean nothing without actual textbook makers being on board. Apple has as you’d expect delivered a handful of partners who have begun making textbooks and distributing them through the iBookstore.

There are already eight of these textbooks available for free on the iBookstore from Pearson, McGraw Hill, Houghton Mifflin Harcourt, DK Publishing, and E.O. Wilson. With these textbooks containing long video and impressive iteractive 3D diagrams they are of course large in size, the smallest of the current available textbooks Pearson’s Environmental Science weighs in at 793MB and Pearson’s Biology is an astonishing 2.77GB.

Apple says that textbooks will be priced from $14.99 or less and in fact imposes this price as the upper limit for self-publishers too.

E.O. Wilson's Life on Earth textbook

The transparent plan from Apple today is to help improve the education of children by encouraging the creation of more engaging and interactive learning tools in the form of textbooks. Of course with these iPads in the classroom other tools will be at the fingertips of those students. But let’s not forget that Apple requires to make money to survive as a company, whilst it is taking the 30% cut from the sales of textbooks on the iBookstore the more veiled tactic here is to sell more iPads into education.

The critics have of course come out all guns blazing, arguing that the price of iPad is prohibitive for widespread use, Joshua Schell over at Macgasm claims that they’ll only end up in “rich white kid schools”. Apple clearly thinks different, Schiller told The Verge that it could work out favourably for schools if weighed against the cost of buying textbooks. Apple already offers volume purchase pricing of hardware which isn’t open disclosed to the public.

From my point of view Apple will need to work hard at this, it’s in a real precarious position where these textbooks will end up in the hands of a few thousand students at a handful of schools and be unable to penetrate the mainstream U.S. education system. Apple will need to keep the authoring software as up-to-date as possible and try and bring on more publishers and constantly encourage them to publish their latest textbooks and keep the pricing low.

The incentive is there for schools but the initial outlay from the district education board will need sweetening by Apple for sure.

The focus of Apple’s first education initiative was K-12 (primary and secondary education), the second moved onto higher levels and brought iTunes U back into the spotlight.

Apple has made available an iTunes U app for iPad and iPhone and iPod touch giving access to the huge educational resources from the likes of Cambridge, Duke, Harvard, Oxford and Stanford. Apple also announced that K-12 institutions can now begin distributing their content through iTunes U.

iTunes U allows access to books, presentations, lectures and assignment lists as well as having built-in push notifications for the latest class information.

iTunes U Store in the iTunes U iPad App

As Schiller said right at the start of today’s event, education is in Apple’s DNA. Ever since the 1980s Apple has been pushing computing in schools and encouraging mass deployment of Macs to all age groups. With this latest move Apple hopes to use its experience of working with content partners and having excellent tools to distribute textbooks as easily as it distributes billions of apps and music downloads.

The simplicity that iBooks Author brings to teachers and lecturers to create their own custom textbooks for their classes empowers the teacher who knows the students best rather than a nationwide system that tries to cater for the majority.

You can watch today’s Apple event online.

Apple's Education-based Special Event Invite

On Thursday Apple will hold its first event of 2012. The event which will be held in New York City early on Thursday morning is guaranteed to be focused solely on the education market. Thankfully Apple clarified this intention with the actual event invite itself leaving no room for speculation on 50-inch Apple branded television sets or Apple TV boxes that can have Siri-type commands shouted at them.

Instead the little speculation that has led us up to this week has focused on the iPad and textbooks. When I say the iPad I don’t mean a refresh of the iPad hardware, that’s not likely to happen until April, I’m talking about how Apple will use the iPad to dominate the education market.

It’s somewhat ironic that the biography of Steve Jobs written by Walter Isaacson contains a number of hints at future products and directions for Apple but the two that stick out are Jobs’ mention of cracking the problem of TV interfaces and the education textbook market. Ever since the release of the biography the furore of rumours have surrounded the Apple TV or sometimes crazily referred to as the iTV.

I’ll come back to these Apple TV rumours in another piece as we’ve reached the stage where the number of rumours and their detail is indicating some change in Apple’s approach to the market. In the mean if you want to read something that seems like it was picked right out of my brain I suggest you have a read of Richard Gaywood’s piece over at TUAW.

But for now let’s focus on the upcoming event.

For those that haven’t read the biography or skipped over this particular piece in Isaacson’s book, here’s the quote from page 509-510:

In fact Jobs had his sights set on textbooks as the next business he wanted to transform. He believes it as an $8 billion a year industry ripe for digital destruction. He was also struck by the fact that many schools, for security reasons, don’t have lockers, so kids have to lug a heavy backpack around. “The iPad would solve that,” he said. His idea was to hire great textbook writers to create digital versions, and make them a feature of the iPad. In addition, he held meetings with the major publishers, such as Pearson Education, about partnering with Apple. “The process by which states certify textbooks is corrupt,” he said. “But if we can make the textbooks free, and they come with the iPad, then they don’t have to be certified. The crappy economy at the state level will last for a decade, and we can give them an opportunity to circumvent that whole process and save money.

The quote speaks for itself, to give it some context just before this particular extract Jobs had been having dinner with Rupert Murdoch who had also begun to focus on education. Based on my knowledge of Newscorp and some research I’ve done, it would appear that Murdoch’s grasp on the massive textbook industry is limited and by the sounds of it he wants in.

Apple evidently wants into this industry too, whether the company has worked with Newscorp like it did with The Daily early last year or not is not known but I wouldn’t be surprised if that was the case.

It would appear that Apple is going to make use of its experience of creating great tools for publishers and developers and offering fantastic methods of distribution to revolutionise the textbook market. Chris Foresman over at Ars Technica writes that Apple has created a tool to help in the production of interactive eBooks (and presumably textbooks) or as Foresman puts it “the Garageband for eBooks”.

Such a piece of software designed for the textbook industry is right up Apple’s street. For many of the same reasons that eBook readers have become popular the iPad could easily become the de facto textbook reader in schools across the world.

Foresman’s piece on Ars discusses the precise advantages that Apple has over many other companies who may wish to enter this particular market. Most notably Apple has experience of working closely with content partners to distribute their content, it does it with music, TV, books and movies to great success.

Philip Elmer-DeWitt of Apple 2.0 whilst mainly taking aim at the sensational headlines that have been formed following Foresman’s post writes that a former Apple executive said that “This whole event is being blown out of proportion.” PED notes that the goal of Apple’s entrance into the textbook industry is to sell more iPads not to destroy the physical textbook industry.

So on Thursday we’re guaranteed to hear about how Apple has partnered with the massive textbook companies like Pearson, McGraw-Hill, Houghton Mifflin Harcourt, Wiley and Thomson to distribute their textbooks as brand new interactive editions via the iTunes store onto the iPad. Rather than using iBooks Apple will most likely have the textbooks as individual apps or into a folder that is reminiscent of Newsstand.

A number of critics of the idea suggest that these publishers will be unhappy with Apple’s policy of taking a 30-percent cut but those who follow the industry have said that the inability to resell these new digital textbooks will easily cover the cost of distributing through Apple’s platform.

Foresman also makes mention of a number of sources who suggested that Jobs had been working on this project for several years and a release was expected during Fall last year but was delayed for unknown reasons. Clayton Morris makes a similar sentiment adding that he had learned of the event last September.

A relatively unknown area of the iTunes Store is known as iTunes University. iTunes U already acts as an extensive distribution platform of lectures, audiobooks and language lessons amongst other things. I say relatively unknown but what I mean is relatively unknown to those who aren’t in education, for those who are then the resource is incredibly helpful.

In Morris’ post he mentions that Thursday’s announcement will also involve iTunes U. I suspect that the platform will be the distribution method for textbooks and the content that already exists will be expanded although the majority of big name universities are already on board.

Thursday’s announcement is likely to be of little interest to the average consumer and the excitement around the event already suggests that with no chance of a hardware announcement the interest is dimmed somewhat. However it shouldn’t be underestimated in terms of the effect that this will have on the textbook industry. With some big publishers likely to be on board the pressure on schools, colleges and universities to buy iPads for students will increase exponentially. The benefits for Apple are obvious and this could very quickly become a big part of Apple’s financial statements.

For textbook publishers it looks like they could also benefit, not only to their bottom lines but also in simplifying distribution methods and removing much of the bureaucracy that blights many curriculums across the US.

The event will kick off in New York City at 10am Eastern time (7am Pacific time or 3pm London) on January 19.

Alex Brooks artistically illuminated by an iPad | Photo by Merry Phillips

There’s no easy way to say it, 2011 was a bad year for this website. Such a statement isn’t easy for me to write because it isn’t easy for me to hear; in July World of Apple will be seven years old and anyone who has ever run a website will know that it’s not all dissimilar to bringing up a child. And this child is now at the ripe old age of seven. What follows is a short reflection of those seven years, the lessons learned and the experience garnered and a hopeful punt at where I’m heading.

Those seven years taught me a lot but the last 12 months taught me so much more than all of those years put together. In my personal life I excelled in areas that are vital to my future life, I gained knowledge, experience and friends that will see me go far. I was featured on TV and in magazines for the first time, I completed my first major political campaign, I started renting my first house and I went from thinking I was grown up to knowing I was growing up, a key distinction in decision making. In fact, all age does is make you realise the decisions you’ve made today may not be the right ones later. But, you never know until it’s done.

Whilst I, myself was doing all this changing this child was suffering. This child that has been nurtured with thousands of hours of my life. This child that has seen me slave all day and all night, ruin relationships, make holidaying impossible but also the same child that has seen me at my happiest, flown me around the world, seen beautiful places and products and made some amazing friends. It’s incredible to suggest that this non-material collection of words, code and pictures can have such incredible power never mind being able invoke such emotion in me.

It took me too long to realise that I was neglecting this child and it took me even longer to realise what I was doing wrong. With the benefit of hindsight it seems obvious now and I’ve outlined it clearly above, this child grows only with dedication and time and in 2011 I supplied neither of those things. But there is a third ingredient and that ingredient is me.

I started this website in 2005 for the simple reason that I wanted a website that reported on Apple in a sensible, objective and concise fashion. Put simply I wrote the website for me and by doing that everything else came naturally. Then came the growing pains and I’ve only realised now that this is where the trouble began. A website with thousands of uniques a day needs powerful servers, developers and designers and the only viable option to pay for that is advertising, ugly and ineffective advertising—the ineffectiveness can be combatted with a dose of quantity.

Success brings many things and greed is certainly one of them and being young certainly makes it worse. A simple formula for a website running advertising is that the more people who turn up on a single day then the more money the website will make on that day, so the website quickly goes from two lengthy, well written posts a day to six short and badly written posts.

The best way to know how much money a website is making is to watch the stats and watch them like a hawk I did. The first time I got linked from Slashdot (remember that place?), Digg and many other big sites, the rush was incredible. That child of mine had benefited from the work I put in, had flourished and went to its first school play and was a huge success. I couldn’t have been a prouder parent.

But I had cheated.

Instead of carefully crafting my child’s outfit for the school play I took the easy route, I went out and bought the best outfit I could find. On stage in front of an audience of onlookers it looked fantastic and the applause and words of congratulations from other parents felt incredible but it wasn’t real.

I never realised though, I just loved the high and relished the attention. Problem is, the highest high never comes again and day after day I began seeking the same feeling, only it was duller every time. So the tactics got worse.

Those of you familiar with this author will have witnessed some of those very tactics. From the likes of posting NDA screenshots and details to raving about the number of cease and desists I’d received. They were great for the pocket and those line graphs showing uniques leaped month after month.

As the bars on the chart grew higher the content got worse, its effects on my reputation and on Apple became stronger each time and it was damaging behaviour. Then the charts began to level out, the previous behaviour was having effect and I and this website were now suffering. 2009 saw two million uniques, 2010 saw one and a half million and last year saw just over 500,000. I grew out of love with the stats when they no longer fed my hunger, if I hadn’t then maybe I would have noticed before.

The stats weren’t the answer though and they never should have been. The big charts were merely an extension of big money, the real happiness was in the content. The whole experience is actually a reflection of a wider problem in online publications across the entire internet and maybe I’m flattered to have made it out the other side but I’m by no means unscathed.

So the solution?

As many of my friends would tell you and thankfully a lot of advisers will also contest I didn’t know the answer to the problem because I couldn’t see the problem. By the time I realised that the charts were flat and the money had all but dried up it seemed too late to reverse the trend. Should I just pump out more content? Should I take on more writers to help? Maybe I’ll run some giveaways to bring in quick rushes of traffic, I thought. All of this is time consuming though and time is not something I had, I needed a quicker solution. Frankly, I needed a miracle.

“I’m going to pull the plug” I said somewhat teary-eyed to a number of friends. I had the excuses to hand when they vehemently encouraged me to stick with it. I’d tell them that an explosion of sites and big media corporations interested in Apple had fragmented the audience too much and competing with $100 million corporations with hundreds of writers was impossible. Honestly it was just a fancy way of covering up my own faults and self-defeat.

The content began slowing up before October but the death of Steve Jobs helped put it all in perspective. I was deeply touched by Steve’s death, as I remarked at the time it felt strange to feel grief for someone you couldn’t even call an acquaintance. How can you miss someone you’ve had the briefest of encounters with? It opened up some questions on life and death, and fed my philosophically inquisitive mind. The coverage of Steve’s death was often moving and many reflected on his genius, his vision and other talents related to Apple and technology. I noted that he had another talent, one often overlooked, the talent of thought. The best example of such is his Stanford commencement speech that he made in 2005. There are some fantastic points to relish in those 15 minutes but here’s one of my favourite takeaways and something I now subject myself to:

I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “no” for too many days in a row, I know I need to change something.

Steve Jobs delivers Stanford Commencement speech in 2005

October saw the last post I made to World of Apple for 2011, the days and weeks that followed were some of the strangest I’ve ever experienced. Whilst my life progressed in ever greater ways an invisible force was eating away at me. Whilst it had been staring me in the face for a long time the answer to how to feel happy about this website was working its way to the surface.

The real answer to the problem had in fact been obvious all along; it all began floating to the surface at WWDC in June when respected Apple-veteran Jim Dalrymple (originally of MacCentral, now running The Loop) offered some on-key words of wisdom to me over some greatly enjoyed Heineken.

Put simply, World of Apple is a brand but more succinctly an extension of me, my thoughts and my opinions. These words are my voice, these pages are my work. And my happiness isn’t about the money, the traffic or even the trips around the world and playing with Apple’s latest and greatest. The happiness is in hitting the publish button on 1,000 words of my branded content. The feeling of producing and watching others enjoy quality, original thought is one of the greatest I could ever experience. Engaging in conversation with those who agree or disagree, exploring individual ideas and producing original content is what makes me look into the mirror and make me want to do it all.

The conclusion wasn’t easy, the changes go against what I’ve seen as natural but it all fits with the original concept I thought up seven years ago which was to produce a site I would want to read.

The site I want to read doesn’t churn out the same news and rumours that thousands of other sites have, the site I want to read doesn’t post fanatical rumours from idiotic sources. To make matters worse this churn effect often comes with a form of chinese whispers, led mainly by eccentric, traffic seeking asshole bloggers who are unable to distinguish fact and fiction, unable to pick up the phone to a public relations team to check a detail or more unbelievably spend the time to produce something thoughtful.

The site I want to read and will produce will post thoughtful commentary on Apple. The kind of commentary and prose that that’s sensible, articulate and adds value to a wider discussion happening across the internet. There are already a handful of sites just like this, authors who have in some cases taken grave risk to quit their day to day lives to produce content just like this. I value those sites, I enjoy reading their content.

The changes have also inadvertently seen me join a sort of ongoing blogging revolution, one in which many sites have opted to remove commenting. World of Apple has over 6,000 comments, many of which are relevant and informative. Whilst the ability to comment has now been removed I hope to keep those comments attached to their relevant posts.

The argument of whether to keep or remove comments was an easy one for me. The number of readers who emailed between October and December to ask about the status of the website was proof enough to me that a conversation can be held without the bloating workload that is moderating and maintaining comments.

I’ve also removed all forms of advertising from the website and RSS feed. The Apple rumour mill is constantly full of outlandish rumours that are only being spurred on by sites seeking traffic and advertising money. Removing this metric will not only remove ugly distractions from the readers view but also from my writing eye. The only reason to write will because I want to not because I want clicks.

It’s difficult to scientifically state exactly how ridiculous the Apple rumour game has become. Anyone with a level head for these things can spot a good rumour a mile off, they come from certain sources and they have a certain feel about them. The reasons why the majority of websites are willing to run any rumour from any source is obvious, those clicks equate into money.

2011 was a tough year, 2012 will be better. As I’ve put a generation of this site behind me I should take some time to thank the people that have made it possible to get to this stage. Most notably Liam Gladdy who has stood by my side for many years helping with site development and server management. Liam’s skills are second-to-none and I wouldn’t hesitate in recommending him for web work, not to mention that his calming British accent can steer anyone round a crisis. I’ve overworked and poorly remunerated Liam many a time but I am eternally grateful and beyond our professional relationship I’ve gained a great friend.

Also special thanks to Jon Kokke who has had little involvement with the site of late but the design that you see today is his and I love it as much now as I did when he first showed it to me in 2009 (and frankly that’s all that matters).

This site has also seen many pairs of hands tap out some incredible content over the years. The content and discussions that preceded the writing done by Luke, Dee, David, Dean and Nishant to name a few have helped me no end.

Also of course thanks to those friends, whether they be virtual or not, who I bounced ideas off about what to do with the site, especially Jim. Big thanks to readers who encouraged me to stick with it, knowing the words aren’t just going into an ether does make a difference. I hope you all keep reading. As Dylan would say, the times they are a-changin’.

Let’s continue the discussion on Twitter. Follow @worldofapple or @alexbrooks.

Mac App Store running on MacBook Air

Today the Mac App Store celebrates its first year of existence and what a year it was. Despite being a fledging service trying to break the mould of a decades old model of distributing software the Mac App Store successfully made an impact and changed the way we buy software forever.

Originally announced towards the end of 2010 the Mac App Store finally arrived with the release of Mac OS X 10.6.6, whilst the MAS was a hugely touted feature of OS X Lion, Apple felt it important to give the Mac App Store a head start by releasing it ahead of Lion’s release. The early release tactic certainly worked, within 24 hours 1 million Apps had been downloaded and last month that figure topped 100 million.

Apple wasn’t shooting into the dark though, the model of an App Store was natural to anyone who had been using an iPhone after 2008 and that was simply an extension of the iTunes model of a few clicks and instantly you have what you wanted.

The Mac App Store has made a dent though, Apple put so much trust in the service that it delivered OS X Lion solely through the service and in June began distributing its own software through the MAS.

The success of the MAS has been infectious with Microsoft saying that it will ship Windows 8 later this year with Windows Store and is offering developers several incentives to get on board.

The Mac App Store sure has made an impressive landing, topping the 100 million downloads mark in under one year and effectively becoming Apple’s sole method of distributing software.

The Mac App Store does have its negatives though, many developers have complained that they can no longer offer trials or demo versions of software and that paid upgrades are difficult to implement. For Apps to appear on the Mac App Store they must also be approved by Apple which means they are subject to a number of restrictions making it impossible for some Apps to make it into the Mac App Store.

Many developers will be wishing that 2012 holds many new features for the Mac App Store.

On the very last day of 2011 Apple’s first fiscal quarter of 2012 ended and what happened during the preceding three months will drop jaws across Wall Street. Unlike previous years the quarter ran for 14 weeks rather than 13, this is something that happens every six years to align the fiscal periods with the December calendar. Six years ago this extra week of product sales wouldn’t have been notable, this time it should be taken into account (little reminder for the analysts amongst you).

Apple will report the results of its first quarter on January 24 and expect the news to be incredibly impressive. Those with even a basic knowledge of Apple’s business will know that its first quarter is always the most profitable driven by strong sales ahead of the holiday shopping season which kicks off in early November and runs right through until the end of December. The products that Apple makes are massive holiday sellers and the iPhone and iPad were sure to have been unwrapped in there millions across the world.

Although sailing under the radar of most onlookers, the clue to just how big Apple’s first quarter was likely to be was actually pinned by Apple itself during the last time we heard the company speak about its financials. During the fourth quarter of 2011 conference call Peter Oppenheimer gave a forward looking statement that predicted that Apple would bring in revenue of $37 billion on earnings per share of $9.30.

Estimated and actual quarterly Apple sales revenue

To add some perspective, Apple reported record revenue during the third quarter of 2011 and that was $28 billion. Those who are regular followers of these numbers will know that Apple’s guidance for upcoming quarters is always below what actually happens, in fact Apple often guides 12-18% lower than its actual numbers. Even on the lowest end of that scale Apple will report revenue of $41 billion, on the higher end $43 billion.

Such huge numbers would suggest that Apple has increased its revenue by $15 billion in just six months. But more notably Apple’s previous first quarter reported revenue of $25 billion, a first quarter record but a massive $18 billion below the current expectations.

Such analysis and predictions of revenue reveal just a small piece of the big picture that will be discussed during Apple’s fiscal results on January 24. Sales of its hardware and uptake of iCloud, iOS 5 and OS X Lion will be closely watched. I’ll cover the details of these nearer the January 24 date.

2011 was a truly momentous year for Apple in many ways, during the year that has just passed the company released an unprecedented number of products in terms of both hardware and software cementing its place as the world’s most popular consumer electronics company. Apple also continued to rake in huge profits, at times climbing to be the most valuable public trading company in the United States.

Apple also suffered personnel changes with the loss of a number of key members of senior management, most notably Bertrand Serlet earlier in the year and Ron Johnson towards the end, both of these departures were of course hugely outweighed by the death of co-ounder and CEO Steve Jobs in October.

To mark such a great year for Apple I’m going to recap a number of key events with a series of images, so let’s start right at the beginning of the year.

Mac App Store running on OS X Lion

Apple kicked off the year with big ambitions, after initially announcing its intentions to release an App Store for the Mac the company finally made the software available on January 6, 2011. Whilst initially only available for Snow Leopard the software was a key feature of OS X Lion which was released later in the year.

10 Billion iOS App Store Downloads

January also marked a massive milestone for the original App Store with over 10 billion apps being downloaded as of January 22nd. By October 2011 this number had climbed to 18 billion downloads and showed no sign of slowing. The App Store was initially made available for the iPhone in July 2008 and later the iPad in early 2010.

Verizon iPhone 4

February saw the biggest shake up in the US mobile market since the original release of the iPhone in 2007. Ever since the release of the iPhone in June 2007 it was only available on AT&T in the US, February saw this exclusivity end and Apple released a CDMA compatible handset which worked on Verizon. By the end of 2011 AT&T, Verizon and Sprint all sold the iPhone in the US.

Obama joins a toast with Technology Business Leaders at a dinner on February 17 | Image courtesy of White House and Pete Souza

Steve Jobs was granted his third medical leave as CEO of Apple early in January 2011 and as ever his health was shrouded in mystery, his first public appearance since the announcement of his medical leave was this photo released by the White House on February 17 which showed the back of Jobs’ head whilst joining a dinner attended by President Barack Obama and technology leaders.

iPad 2 with Smart Cover | Image courtesy of Apple

Despite his medical leave Steve Jobs took to the stage on March 2 to unveil the second-generation iPad. Shipping on March 11 the iPad 2 was markably thinner than the original and packed many improved technologies.

Early-2011 iMac Family

Apple released its first Macs with Thunderbolt in 2010 but 2011 saw the ultra-fast connection technology come to Apple’s desktop based iMac for the first time. During the rest of 2011 the Thunderbolt made it into every consumer Mac, but the Mac Pro remains notably left out not seeing a single update during 2011.

Steve Jobs explains iCloud during WWDC 2011 Keynote

June saw Apple’s annual Worldwide Developer Conference kick off in San Francisco. Unlike previous years the 2011 WWDC keynote unveiled no hardware which moved Apple away from its annual iPhone release schedule. Instead Steve Jobs and other Apple executives took to the stage and showed off iOS 5, iCloud and OS X Lion.

Rendering of Apple's new HQ

The day after the WWDC 2011 keynote Steve Jobs appeared at a Cupertino City Council meeting to unveil the company’s plans to build a brand new headquarters down the road from its current main building; Apple originally announced its intentions to build the new headquarters in 2006.The headquarters which have yet to be fully approved by Cupertino City Council look a lot like a spaceship and will house 13,000 Apple employees across the four-storied building.

On July 20 the next major version of Apple’s Mac operating system was made available to the public. The release marked a major shift in the distribution of software as it was only available via Apple’s Mac App Store and required an up-to-date version of Snow Leopard to be installed first. Apple also dropped the Mac from the operating system’s name with the official name listed as ‘OS X Lion’.

Steve Jobs and Tim Cook together at Q&A event

On August 24 Steve Jobs announced his immediate resignation as Apple CEO. He was appointed chairman of the board and Tim Cook who was already acting CEO became the seventh CEO of Apple.

Steve Jobs, August 24 2011:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

Siri on the iPhone 4S

On October 4 Tim Cook took to the stage and unveiled the iPhone 4S in-front of a crowd of invited media in Cupertino. The iPhone 4S went on sale in seven countries on October 14. The headline feature of the iPhone 4S was Siri an automated voice control system but the handset also included Apple’s updated A5 processor as well as a redesigned antenna and packing both CDMA and GSM chips making the 4S the first “world phone” from Apple.

Tim Cook speaks at a celebration held in memory of Steve Jobs

Just one day after Tim Cook announced the new iPhone 4S on October 5, Apple released a statement stating that co-founder and former CEO Steve Jobs had died. The news of Jobs’ death spread around the globe with a visible outpouring of grief from many walks of life. Apple Stores all had flowers, candles and half bitten Apple’s left outside and Jobs’ house and Apple’s Infinite Loop headquarters were engulfed in flowers and messages of grief and sadness.

Tim Cook, October 5 2011:

I have some very sad news to share with all of you. Steve passed away earlier today.

Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.

Steve Jobs. 1955 - 2011.

iOS 5 running iMessage | Image courtesy of Apple

October 12 saw the public release of iOS 5 and iCloud. iOS 5 was one of the biggest software releases Apple has ever endeavoured upon and packed over 200 new features most notably iMessage, Notification Center, Newsstand, PC-free syncing and iCloud integration. The release of iCloud also saw Apple make another big stride into the cloud offering a number of key features including Photo Stream, iTunes in the Cloud, iTunes Match and iOS device backup and restore. iCloud was said to be in use by over 20 million users in under a week of becoming available.

Apple Store Grand Central | Image courtesy of Apple

Despite Apple head of retail Ron Johnson departing to JC Penney in November, Apple continued to open magnificent stores around the world. 2011 saw major external changes to Apple’s iconic Fifth Avenue Apple Store with the glass-cube being disassembled and rebuilt with fewer pieces of glass. Apple also opened another Manhattan based store, this time in Grand Central Terminal.

Jonathan Ive at Macworld 2008 | Copyright World of Apple 2008

2011 ended on a high with the Queen of the United Kingdom announcing that veteran Apple chief of design Jonathan Ive would be knighted as part of the annual honours list. The British designer joined Apple in 1997 and is the name behind many iconic designs such as the iMac, iPod, iPhone and iPad.

Looking forward to 2012 it seems that Apple shows no sign of letting up. Apple is set to report another record breaking quarter of financials later this month and within the calendar quarter will release a new iPad. As the year progresses Apple will most continue to updates its Macs, software and iOS device hardware offerings. Rumours also suggest that Apple may make further endeavours into television, books and publications.

Iconic iPod ad in New York City | Flickr

Ten years ago today the late Steve Jobs took to the small stage in Apple’s auditorium. Dressed in his trademark black turtleneck and blue jeans and addressing a room of only 200 journalists and Apple staff he said, “We have something really stunning for you today.”

What was presented on that stage on a crisp Tuesday morning reinvented the music industry.

Apple at the time was a very different company to the one we see now. With a stock price of just $9, a tiny product line made up of just Macs, a handful of retail stores and a CEO who had only been at the helm, albeit for the second time, for a little over a year.

In mid-October 2001 Apple PR sent out invitations via FedEx to the media encouraging them to attend an event at Apple’s corporate campus that would see the introduction of “a breakthrough digital device”, the invitation also had the cryptic clue that read, “Hint: it’s not a Mac.”

The Rumours

The Apple rumour mill in 2001 wasn’t much different to how it is now. Some of the sites no longer exist and the interest in the rumours these days is palpable and a source of great income for the sites that supply them.

No major rumour site pinpointed that Apple would release an MP3 player, in fact many predicted the resurfacing of the Newton. This post from Mac Rumors highlights just some of those rumours from October 2001.

Despite Apple being very tight on rumours at the time it appears that the iPod did get ousted a little bit earlier than Apple would have liked but the rumours didn’t gain much traction.

On October 19th Brad King at Wired wrote:

Apple on Tuesday will unveil a new portable electronic device that allows people to listen to digital music files away from the computer, according to sources familiar with the company.

The device — called the iPod — can be synched with the computer using a high-speed cable connection that allows consumers to download their music into a portable system, which can then be accessed by either a car or home stereo system.

CNET on the other hand ran with:

Apple apparently is not planning to introduce a portable MP3 player, but something more sophisticated such as a component for a home digital stereo system.

Original iPod with accessories | Image courtesy of Apple

Slightly more entertaining are some of the comments on many of the Mac Rumors articles, most wishing for the return of the Newton.

When the day came Mac Rumors ran a lacklustre post titled “Apple’s New Thing (iPod)” detailing the 5GB device that could hold 1000 songs available for $399 and would ship on November 10.

Some highlights from the vibrant Mac Rumors community on that day:

hey – heres an idea Apple – rather than enter the world of gimmicks and toys, why dont you spend a little more time sorting out your pathetically expensive and crap server line up?

I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player? I want something new! I want them to think differently!
Why oh why would they do this?! It’s so wrong! It’s so stupid!

iPoop… iCry. I was so hoping for something more.

Climb to Success

The iPod at first wasn’t wildly popular nor much of a sales success. In July 2002 Apple added a 20GB iPod to the lineup and made them compatible with Windows computers, helping increase sales slightly. During the first year on sale the iPod generated $143 million in net sales for Apple, somewhat paling in comparison to strong sales of the Mac.

The major milestone in the iPod’s success was in 2003 when Apple introduced the iTunes Music Store in April, a Windows version followed in October, at the time Jobs claimed: “This has been the birth of legal downloading”.

2003 really was the year that the iPod’s rise to fame began, in May 2003 Apple introduced the third-generation iPod, the first with a Dock connector and featured both USB 2.0 and Firewire. It was that same event that Apple announced sales of 1 million iPods, six months later it had sold another million, 18 months later that figure had climbed to 9 million.

The iPod from 2001 to 2007

In six years the iPod climbed to rockstar status and became a must-have device, selling more units than any other consumer electronics device and catapulting Apple into the hands of millions of people.

Here’s how it played out:

• October 2001: First iPod introduced with 5GB hard drive and Firewire connectivity and mechanical scroll wheel. A 10GB model followed soon after.
• July 2002: Second-generation iPod released available in 10 and 20GB capacities, touch-sensitive scroll wheel, available for Windows.
• April 2003: Third-generation iPod unveiled, eventually available in capacities up to 40GB. Did away with the iconic scroll wheel and instead had a row of buttons for player functions. Introduced the Dock connector and USB syncing.
• January 2004: iPod mini is the first iPod to feature the “click wheel” and available in five colours. Available in 4GB capacity.
• July 2004: Fourth-generation iPod available, returning to the original scroll wheel design. Now only in 20 and 40GB capacities.
• October 2004: Fourth-generation iPod revised to have colour display, marketed alongside normal iPod as ‘iPod photo’.
• January 2005: iPod shuffle revealed with no display and 1GB of storage. The size of a stick of gum and is the first iPod to use flash memory for storage.
• February 2005: Second-generation iPod mini introduced, now in 6GB capacity with more vibrant colours.
• June 2005: iPod color released, same as fourth-generation but saw the demise of the black and white screen.
• September 2005: In an unprecedented move Apple replaced the popular iPod mini with the new iPod nano only available with 4GB storage.
• October 2005: Fifth-generation iPod released with a new design and very thin case. Plays video and available in both black and white. Eventually having a capacity of 80GB.
• September 2006: Second-generation iPod nano has an anodised case and available in six colours. Available in capacities up to 8GB.
• September 2006: Second-generation iPod shuffle now even smaller with anodised case in new colours and up to 2GB of storage.

iPod nano 3rd Generation | Flickr

A Touching Revolution

In January 2007 everything changed, again. We know the story well by now, Steve Jobs, again in his famed uniform, took the stage at Macworld San Francisco in front of thousands and announced the iPhone. The iPhone at the time was described by Jobs as the “best iPod we’ve ever made”.

This was the very same event that Apple Computer became Apple Inc. Truly cementing the company’s status as a producer of consumer electronics.

The effects of the iPhone on many industries could not have been predicted, its effects on the iPod less so. During 2007 it would have been crazy to think that the iPod’s grand run would come to an end in only a few years, more so to think that Apple’s own product would cannibalise the iPod so quickly and ruthlessly.

It was September 2006 when Apple began its yearly tradition of introducing new iPods in September, eventually more commonly known as ‘Apple’s music Fall event’. It was a year later in September 2007 that we had a glimpse of where the iPod was heading and the sneak peak at the drastic changes the iPhone was bringing in.

The iPod touch was the slimmer, less functional brother of the iPhone. Available in capacities up to 32GB (compared to the iPhone’s measly 8GB) and super thin it still featured the famed 3.5-inch multi-touch display, WiFi and access to Safari, YouTube and more importantly the iTunes Store.

Alongside it in 2007 Apple kept pushing the other iPods, the sixth generation iPod known as the “iPod classic” was released and is the iPod that remains available today. The iPod nano was refreshed with a new shape in 2007, and again in 2008, 2009 and finally 2010. This year the iPod nano got a minor refresh. The shuffle also remains unchanged from 2010.

The Future

With sales of the iPod declining quarter after quarter it’s no surprise that Apple has slowed the development of iPods. In the last reported quarter Apple sold over six million iPods, pushing the total sales over 300 million, it’s still no figure to sneeze at but well down on the golden years.

It’s also not possible to envisage a future where the iPod doesn’t have a place in Apple’s product lineup. Whilst the iPod touch is beginning to go head to head with ever cheaper iPhones both the iPod nano and iPod classic continue to serve unique purposes. That said, once the iPod touch climbs beyond 160GB of storage expect to wave goodbye to the clickwheel forever.

Today we celebrate ten years of the iPod, a device that has spurred on changes beyond what was thought possible, but it’s unlikely to see out another ten.

Tim Cook speaks at a celebration held in memory of Steve Jobs

On Tuesday Apple announced the results of its fourth fiscal quarter of 2011, the results of which came as a bit of a shock to many analysts who expected Apple to continue its strong streak but weakened iPhone sales dented the outcome of the quarter.

Following the release of Apple’s quarterly financials company CEO Tim Cook and Chief Financial Officer Peter Oppenheimer chatted with analysts on its earnings call, which can be heard again here.

Whilst World of Apple would historical present notes of interest from the earnings call immediately following, this extended article will weave those notes into a bigger picture.

Tim Cook began the earnings call with the following statement:

This is our first earnings call since the passing of Steve Jobs. The world has lost a visionary, a creative genius and an amazing human being. Steve was a great leader and mentor and inspired everyone at Apple to do extraordinary things. His spirit will forever be the foundation of Apple, and we are dedicated to continuing the amazing work that he loved so much.

Only Apple brings together software, hardware and services into such a powerful and integrated experience for our customers. As we move forward, we will continue doing that with relentless focus. I’d like to take this opportunity to express our gratitude for all of the condolences and expressions of support that we have received following Steve’s passing.

Beginning with the Mac Peter Oppenheimer said that customers had downloaded more than six millions copies of OS X Lion during the quarter. OS X Lion is of course the first of Apple’s operating systems to be download only and not be available to purchase on physical media.

During Apple’s fourth quarter the Mac set an all time record for sales and revenue. Unit sales were 4.89 million spurred on by the ever popular MacBook Air and were in fact 26% higher than the same quarter in 2010. Sales of desktops also made a new record led by the iMac but portables continue to dominate making up 74% of all Mac sales.

Whilst Apple only speaks generally in terms of channel inventory it can often be a sign of product transitions in the pipeline, for the Mac this is difficult due to the number of product lines but for the likes of the iPhone this is easier. So although no indication of changes, Apple ended the quarter with between 3 and 4 weeks inventory, lower than expected as Apple usually aims for between 4 and 6 weeks.

iPod nano 2011 lineup

The iPod which remains in steep decline once again saw a mediocre quarter. Apple only shifted 6.6 million iPods during the quarter compared with 9.1 million in the same quarter in the previous year, to put it more sharply the iPod now only makes up 4% of Apple’s revenue, even the iTunes Store makes more than that.

With minimal refreshes to the iPod lineup this month ahead of the holiday season and Apple openly clarifying that iPod touch sales made up more than 50 percent of iPod sales, it makes it somewhat surprising that Apple wasn’t more aggressive with an iPod touch refresh.

Despite this the iPod still remains the top selling MP3 player in most of the countries that Apple tracks through the data published by GFK and in the US market still dominates with about 70 percent market share.

Unlike previous conference calls Apple didn’t reveal as many statistics about iTunes as in the past, possibly because Tim Cook had taken to the stage only two weeks before to tout many of the impressive stats.

Notable for the quarter was iTunes Store revenue which has now topped $1.5 billion, an impressive 35% climb year-over-year. We can attribute this to just how much the App Store and iBookstore have taken hold.

There are 500,000 apps in the App Store with 18 billion downloads since the store opened in July 2008. Also by the quarter’s end the App Store was operating in some 123 countries. iBook downloads also topped 180 million and the iTunes Store itself continues to give impressive figures with 16 billion songs downloaded and 650 million TV shows.

What really dented Apple this quarter was sales of the iPhone, unlike previous fourth quarters Apple didn’t release a new iPhone model, yet iPhone unit sales came in at 17.1 million compared to 14.1 million in the previous September quarter. What was certainly surprising to wall street and analysts was that persistent rumours of an iPhone refresh evidently affected the sales of the iPhone. Sequentially iPhone sales were down from 20.3 million.

Quarterly iPhone unit shipments Q109 - Q411

Apple even made a rare acknowledgement that rumours played their part. Peter Oppenheimer said that the company was “pleased with the iPhone sales growth as we prepared for the transition to the iPhone 4S” and that they “expected iPhone sell-through to decline sequentially from the June quarter as a result of new product rumors following the announcement at our Developers Conference in June that iOS 5 and iCloud would become available in the fall”.

Looking forward, iPhone sales are sure to be record breaking during the current December quarter. We already know that Apple has sold over four million iPhone 4S units, this doesn’t take into account those cheaper iPhone 4 models or even the heavily discounted iPhone 3GS units that are still being sold by many carriers. When we next hear of iPhone unit sales, expect a big record breaking number.

Tim Cook also spent a bit of time talking about the smartphone market as a whole. Reiterating much of what was said in his presentation at the launch of the iPhone 4S he said that he wants the iPhone in as many hands as possible. The current handset market stretches to 1.5bn with 400 million of that made up my smartphones but Cook notes that it’s growing and “the big win is to eat into the 1.5 billion and not just for us but I think for others as well, and we are very focused on doing that”.

Finally for the iPhone Tim Cook touched on some points about how the company is positioning the 3GS in the market. Primarily talking US, Apple has taken the iPhone 3GS free on a postpaid basis, as well as lowering the price of the iPhone 4 to $99. These advantages also play out in the prepaid market with considerably lower entry prices for an iPhone.

Whilst lower than previous quarters the iPhone continues to dominate Apple’s balance sheet, making up a massive 39% of the company’s revenue. Apple also said that during the fiscal year of 2011 it shipped 72 million iPhone units, a yearly record by a massive margin.

Apple’s hot product for the year has naturally been the iPad 2, whilst not yet outshining the iPhone in terms of revenue (just above the Mac with 24%), unit shipments are climbing rapidly on a sequential basis and year-over-year.

iPad Quarterly Revenue (Q411)

During the quarter Apple shipped 11.1 million iPads, a new record, and this is compared to just 4.2 million in the year-ago quarter. Sequentially Apple also moved an additionally two million units, a 20% unit increase.

More impressive was the reach that the iPad 2 began to make now that Apple has ironed out all the problems it initially had when ramping production towards the start of the calendar year. During the fourth quarter the iPad entered an additional 20 countries, ending the quarter in a total of 90.

Peter Oppenheimer obviously felt the need to rub in the iPad’s success a little and went on to note how 92% of Fortune 500 companies are testing or deploying the iPad and internationally 52% of the Global 500 are doing the same.

When asked on whether Apple was concerned with competitors coming to market with tablet products Tim Cook answered with a defiant no saying that he was “very, very confident about our ability to compete and extremely confident in our product pipeline.” According to June data from IDC the iPad was responsible for 3 out of every 4 tablets sold.

During the fourth quarter Apple also passed the milestone of shipping its quarter billionth iOS device.

Retail stores remain strong for Apple but revenue has begun to plateau despite continuing at a rapid pace of store openings during the quarter. Retail store revenue for the fourth quarter was $3.6 billion, representing just a 1% climb from the previous September quarter. During the quarter 30 Apple retail stores were opened, 21 of those outside of the US, ending the 2011 fiscal year with a total of 357 retail stores.

Apple blamed the slow growth in retail on sluggish iPhone sales, adding that Mac sales had increased 25% year-over-year from 874,000 to 1.1 million and once again touted the statistic that over half of all Macs sold in retail stores are to customers who have never purchased a Mac before. iPad sales are also said to be very strong.

In fiscal year 2012 there will be 40 new Apple retail stores, 75% of which will be outside of the US. The company is also embarking on a strategy where it will expand and relocate existing stores rather than crowding towns with multiple locations. This will happen to retail stores that are said to be constrained and unable to “deliver our desired customer experience.”

China remains a huge target on Apple’s radar but in just a year has also become a big number on Apple’s balance sheet. Total revenue for the fiscal year from China was $13 billion, in 2010 that figure was just $3 billion. Apple now has six retail stores in the wider China region and at the end of 2010 opened its online store.

The number of sales points in China is also amazing with the iPhone being available at 7,000 points of sale. 200 retailers also stock Apple products alongside Apple’s own retail stores. Apple expects China to become number 2 in terms of revenue very soon but also referred to growth in Brazil which was 118% year-over-year and Russia and the Middle East.

Finally Tim Cook made comment on the Thailand monsoons and flooding which have caused massive loss of life and damage to the area. Making it clear that any problems for Apple have already been factored into the forward looking guidance Cook explained that it is not currently known what the status is of some of the factories in the region.

Primary exposure is expected to be on the Mac with constraints to hard disk drive components with an industry wide shortage likely.

Looking ahead, Apple’s first fiscal quarter of 2012 will likely be very strong, with iPod, iPad and iPhone sales booming for the holiday season and with some Macs expected to receive minor refreshes it looks like Apple could smash records all round. Apple’s next fiscal results will be revealed in January following the end to the quarter on December 31.

Apple has very conservatively (as it always does) given guidance of $37 billion in revenue and a target EPS of $9.30 and gross margin of 40% for the first fiscal quarter of 2012.