In the card game Magic: The Gathering, the largest card in the game was a creature called Leviathan. Apple's earnings call yesterday proved that in the realm of handheld devices, the iPhone is the largest card in that game, and in fact, it is the Leviathan of its product line.
In the last quarter Apple sold 6.9 million iPhones. Their goal for the year was 10 million units. Apple sold as many iPhones last quarter as the four previous quarters combined. Notably, more iPhones were sold last quarter than Blackberrys.
Apple accounts for iPhone revenue over a 24 month period, unlike Macbooks or iPods. If the iPhone's revenue were accounted for in the same manner as an iPod, then Apple's revenue from the iPhone would have been $3.8 billion higher, adding a further $1.3 billion in net. Put in context, this additional revenue from an 15 month old product in one quarter is worth more than all of General Motors.
In just 15 months (using normal accounting, not subscription-based) the iPhone accounts for 39 percent of Apple's sales and ranks third amongst mobile vendors in terms of revenue behind Nokia and Samsung. In 15 months.
Apple has $25 billion cash in the bank, enough to buy GM 8 times over, but the real value of this cash hoard is the flexibility to take their time developing products, or to acquire companies during a bear market. Apple could buy Adobe for cash and still have about $8 billion left over.
People are lined up at Apple Stores to buy Macbooks, even with a higher price than other laptops. Ipods are still selling well, and we are heading into Christmas, where iPod sales typically double over the preceding quarter. But both of these products are dwarfed in potential by the iPhone.
What I love about Apple is that they manufacture things. Real things. Things you can touch and use, as opposed to the thin-air financial products (SIV's, CDO's) that collapsed the banking system. The financial sector grew to nearly 20% of GDP over the last 20 years by selling....nothing. Like Seinfeld, the last financial era was about nothing. Apple is about something tangible, something manufactured and sold. The new Macbooks are fabricated (from a single brick of aluminum) guess where? Here. The U.S. needs to get back to making things, products as opposed to services. Apple is proving there is huge money in it, and you don't need a government handout.