Motorola's Loss Is Apple's Gain: That $2.1 Billion Sucking Sound Is Coming From The iPhone
Coincidentally enough, that is almost exactly how much Apple made last quarter over the past three quarters on iPhone sales. That figure comes to $2.3 billion (including lumped-in sales of Apple TVs, which likely made up a very small portion of that total). During yesterday’s earnings call, Apple CFO Peter Oppenheimer spelled this out:
We sold 1.7 million iPhones during the March quarter . . .. Total revenue recognized during the quarter from sales of iPhone, iPhone accessories, and payments from carriers was $378 million. Total deferred revenue from iPhone and Apple TV was $1.93 billion at the end of the March quarter.
Add those together and you get $2.3 billion. That deferred revenue he is talking about is what Apple collects from its share of monthly subscription fees from AT&T and other carriers partners—an arrangement that Motorola has never been able to negotiate for its phones. So not only has the iPhone replaced Motorola-class phones as the mobile device of choice among consumers, but Apple is also replacing Motorola’s business model by tapping into that rich vein of monthly subscription fees: An arrangement, by the way, that has been as good for AT&T as it has been for Apple. [Clarification: The deferred revenue is a cumulative figure since Apple started selling iPhones in mid-2007. Last quarter, Apple added about $500 million to that cookie jar).
Here is the segment revenue line for Motorola’s mobile business: