Apple is now worth more than IBM, thanks to iPhone envy

Apple for the first time crested over $20 billion in quarterly revenue, thanks in large part to insatiable demand for the iPhone. Indeed the iPhone-ization of consumers worldwide caused researchers to study the phenom. They determined that a particular kind of envy causes people to buy them and a less nice form of envy drives people to the BlackBerry.


A study done by Tilburg University, published in the Journal of Consumer Research found that not only does envy drive people to the iPhone, it even encourages them to overpay for it. "Our studies showed that people who had been made envious of someone who owned an iPhone were willing to pay 80 Euros more on average," write authors Niels van de Ven, Marcel Zeelenberg, and Rik Pieters (Tilburg University). The caveat is that people have to be pleasantly envious ... the ooh-aah-can-I-touch-your-iPhone and I want-to-be-like-you kind of envy.

If they were the green-I-hate-you-'cause-your-phone-is-better-than-mine type of envy -- feeling that the other person didn't deserve to be higher on the consumer smartphone ladder than themselves, they tended to opt for a competing product. "People who felt maliciously envious of someone with an iPhone were more likely to pay more for a BlackBerry," the researchers said.

With Apple reporting that it sold double the number of iPhones in the past quarter than it did the quarter prior, clearly people pleasantly covet their neighbors' iPhones. Apple sold 14.1 million of them, reeling in $8.8 billion in revenue, for the three-months that ended on September 30. iPhone units now account for more than 80% above total revenue from the company’s line of Mac computers, reports the Wall Street Journal.

All told for the quarter, Apple reported $20.34 billion in revenue and a net quarterly profit of $4.31 billion, or $4.64 per diluted share. This compares to $12.21 billion and a net quarterly profit of $2.53 billion, or $2.77 per diluted share for the year-ago period. Last quarter, it also hit record revenue of $15.7 billion.

Interestingly, iPad sales were not all-that -- at least they didn't map to exactly analyst's expectations. Apple sold 4.2 million iPads, up from 3.3 million sold last quarter but analysts were expecting the company to report sales of  4.7 million. Not surprisingly, given the cost differential, Apple sold twice as many iPods, 9 million units, but the iPad did cannibalize its smaller sibling. Sales of iPods were down by 4%.

The company sold 3.9 million Macs, too, two-thirds of them Macbooks and over a quarter of a million Apple TV units, Jobs told those listening in on the earnings conference call. Apple didn't spell out Apple TV unit sales in the numbers it reported today to the SEC.

To give you some idea at how high Apple is riding right now, it earned more profit on nearly equal revenue to IBM, the mightest of technology blue chips. IBM also reported its third quarter on Monday. It generated $24.13 billion in revenue and dropped $3.6 billion of net income to the bottom line. With a stock price of about $140 share, IBM's market capitalization is about $180.2 billion. Apple's shares are trading at about $300 a pop which means its market cap comes in at a whopping $290.5 billion -- bigger than IBM by a lot.

So, how did Steve Jobs celebrate the financial love fest? By talking smack about his competitors, what else? During the conference call, Jobs called tablets with 7-inch screens "tweener devices" (oh, really?); he ripped into Google saying that the company is "disingenuous" in calling Android open and iOS closed (gimme a break), characterized the Android developer community as very fragmented (ok, we'll give him that) and said  Android users were forced into becoming system integrators; he also said Research In Motion has a "high mountain ahead" to regain former glory.