MacDailyNews presents live notes from Apple’s Q417 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Apple will provide live audio streaming of its Q417 Results Conference Call using Apple’s industry-leading QuickTime multimedia software.

The live webcast will begin at 2pm PDT/ 5pm EDT today here.

The company posted quarterly revenue of $52.6 billion, an increase of 12% from the year-ago quarter, and quarterly earnings per diluted share of $2.07, up 24%. International sales accounted for 62% of the quarter’s revenue.

For their fiscal 2017 fourth quarter, Apple guided for revenue between $49 billion and $52 billion.

Live notes from Apple’s Q117 Conference Call in reverse chronological order:

• AAPL: 171.26 +3.15 (1.87%) @ 6:00PM EDT

• End of call

• Cook: We are literally firing on all cylinders. This is going to be out best holiday season, yet.
• Cook: Our emerging market performance was very strong. If you take China out, it was even stronger and China grew 12%
• Cook: We also find out when we can achieve supply/demand balance with iPhone X
• Cook: We’ll find out how iPhone mix shakes out
• Cook: We don’t disclose iPhone mix. We view it as competitive information that we want to hold close to the vest

• New App Store design has been received very favorably, leading people to spend more time in the Store
• Customers tend to get familiar with the store over time and their spending increases
• The number of App Store paying accounts is growing as the installed base grows and we make it easier around the world for customers to pay
• Headwind from the memory market is a meaningful impact on gross margins
• Luca: We’re guiding gross margin between 38 percent and 38.5 percent

• Apple focuses on customer experience. If we get the AR/VR experience right, the monetization will naturally follow
• Bandwidth issues in developing countries like India are improving; materially better than it was just 12 months ago
• We started manufacturing iPhone SE in India and the majority of iPhone SE’s sold in India last quarter were manufactured domestically
• We have a long way to go in India which I see as an opportunity
• Cook: India is growing, analogous to the effort Apple put into China; stores, developers, etc.

• AAPL: 171.86 +3.75 (2.23%) @ 5:50PM EDT

• Cook: We put our best estimates into our guidance, which are very bullish. We’ll see how the iPhone mix goes. We need to get all of the models on the market first. We’ve never done three top-end iPhones or a staggered launch, so we’re going to learn something here
• Luca: We don’t control all of the elements of gross margins (for example: currency headwinds)
• Luca: We price our products for the value they deliver. New products cost structures are usually more more than the products they replace

• Tim: I view AR as profound. Not today, but what it will be, what it can be. Apple is in a really unique position with AR
• Apple prices based on what the product delivers. iPhone X is a fabulous product with many innovative technologies
• It’s important to remember that a large amount of people pay for iPhone monthly. Less than a coffee per day. iPhone resale values are strong which also offsets initial price
• Tim: Won’t talk about iPhone mix. The iPhone 8 and iPhone 8 Plus instantly became out top-selling products at launch. The 8 Plus has gotten off to the fastest start of any Plus model (a bit of a positive surprise for Apple).

• Luca: The Services business is growing very well: The App Store set a new all-time record. The number of paying accounts continues to grow. Apple Music memberships up 75% YOY. Apple’s Music business (streaming and downloads) is growing again. iCloud subscriptions are growing, too.

• This is the first time we’ve had three new high-end iPhones and a staggered launch, so we put a lot of effort into guidance in which we are bullish
• From limited budget on up, we try really hard to have iPhones for everyone
• Tim: You can probably tell from the iPhone ASP, we have good success through the different levels of iPhone models

• There are over 1,00 AR apps in the App Store already. AR will just get bigger from here.
• Apple is the only company that could make AR mainstream because it requires both hardware and software innovation
• AR is great for shopping, business, gaming, education, and more.
• AR should be a help for humanity, not an isolating thing for humanity.

• Tim: We never reveal iPhone mix. iPhone X preorders were very strong. As of a few minutes ago, iPhone X sales started in Australia.

• Cook: “I feel great about the results [in Greater China].”
• China results were broad-based. The Hong Kong decline moderated in the quarter. Still down, but less so that it was.
• Q4 in China, we increased market share for iPhone, Mac, and iPad. Hit all-time revenue records for Services and for Mac.
• Tim: Ramp for iPhone X is going well. We’re able to increase week by week what we’re outputting. I cannot predict when supply/demand balance will happen

• Analysts’ questions begin

• Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on November 16, 2017 to shareholders of record as of the close of business on November 13, 2017.

• Apple is providing the following guidance for its fiscal 2018 first quarter:
– revenue between $84 billion and $87 billion
– gross margin between 38 percent and 38.5 percent
– operating expenses between $7.65 billion and $7.75 billion
– other income/(expense) of $600 million
– tax rate of 25.5 percent

• Apple has executed nearly $234 billion of their $300 billion cash return program with $166 billion in share repurchases
• Apple existed quarter with $268.9 billion in cash on hand, $7.4 billion sequential increase

• 418 million visitors in Apple Stores in fiscal 2017

• Apple seeing great traction and record sales of Mac in enterprise
• Enterprise clients are transforming their businesses to iOS apps and iOS devices
• Apple is seeing great momentum with their enterprise efforts (GE, IBM, etc.)
• iPad customer sat of 97%
• NPD: iPad has 54% share, up from 47% YOY
• In Great China, iPad unit sales grew 25% YOY
• A great quarter for iPad with strong demand for both iPad and iPad Pro

• Each geographic segment grew Mac revenue by 20% or more
• Great demand for MacBook Pro
• For fiscal 2017, Macintosh set a new all-time record with $25.8 billion in revenue

• Active users of Apple Pay have more than doubles and transactions are up 330%
• Over 210 million paid subscription, and increase of 25 million in the last 90 days
• Time spent in App Store and apps downloaded in increasing on a per customer basis
• App Store set a new all time record for app sales, generating nearly twice the revenue of Google Play
• iPhone customer satisfaction is 95% vs. 54% for the next highest brand

• Apple’s “Other Products” business includes sales of Apple TV, Apple Watch, Beats products, iPod touch and Apple-branded and third-party accessories.
• Apple’s “Services” business includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services. Services revenue in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.

• iPhone: 46.677 million units vs. 45.513 million in Q416 (+3% YOY), $28.846 billion revenue vs. $28.160 billion in Q416 (+2%)
• iPad: 10.326 million units vs. 9.267 million units in Q416 (+11% YOY), $4.831 billion revenue vs. $4.255 billion in Q416 (+25%)
• Mac: 5.386 million units vs. 4.886 million units in Q416 (+10% YOY), $7.170 billion revenue vs. $5.739 billion in Q416 (+25%)
• Services: $8.501 billion revenue vs. $6.325 billion in Q416 (+17% YOY)
• Other Products: $3.231 billion revenue vs. $2.373 billion in Q416 (+36% YOY)

• Revenue in Greater China up 12% YOY
• Apple CFO Luca Maestri reviews results

• Cooks thanks employees and customers for a very successful record-breaking fiscal year
• Apple expanded free coding with Swift program to 30 community colleges in the US; just the beginning
• Apple Michigan Avenue location opened recently
• Apple TV 4K debuted in Q317 and offers a great selection of 4K HD content, with much more on the way

• Apple’s wearables business up 75% YOY and in fiscal 2017, already generated the revenue of a Fortune 400 company
• watchOS 4.1 brings 40 million songs to your wrist via Apple Music
• Apple is very excited about launch of Apple Heart Study using Apple Watch
• Apple Watch unit growth up over 50% YOY

• Mac: 5.386 million units vs. 4.886 million units in Q416 (+10% YOY), $7.170 billion revenue vs. $5.739 billion in Q416 (+25%)
• Apple’s Mac had its best year ever!
• Developers are sucessfully using Apple’s CoreML (Machine Learning)
• Cook: We believe AR is going to change the way we use technology forever.
• Cook: With iOS 11, iPad has become more powerful than ever (with more power than most PC notebooks)
• Services business alone is already the size of a Fortune 100 company
• Cook talks up iPhone X (“The Second Coming of the Jesus Phone.” – MDN Ed.)

• The launch of iPhone X is now underway as stores open in Australia and Asia
• Record quarterly earnings per diluted share of $2.07, up 24% YOY
• Double digit growth in enterprise and education Mac and iPad sales
• All-time Mac unit sales record in China
• Return to growth in China
• All-time record results for Apple’s Services business
• revenue of $52.6 billion, an increase of 12% YOY
• Cook: “I couldn’t be more excited about Apple’s future.”
• Apple CEO Tim Cook makes introductory remarks

• Apple Inc. Data Summary
• Apple Inc. Consolidated Financial Statements

• AAPL: 173.11 +5.00 (2.97%) @ 4:55PM EDT

• What the analysts expected prior to Apple’s report:
– Q4 adjusted EPS: $1.87 expected by a Thomson Reuters consensus estimate.
– Q4 revenue: $50.7 billion expected by Thomson Reuters.
– Q4 iPhone unit sales: 46 million expected by a FactSet consensus estimate.
– Q1 revenue guidance: $84.9 billion expected by Thomson Reuters.

• AAPL: 173.75 +5.64 (3.35%) @ 4:50PM EDT