MacDailyNews presents live notes from Apple’s Q318 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Apple will provide live audio streaming of its Q318 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 $53.3 billion, an increase of 17 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.34, up 40 percent. International sales accounted for 60 percent of the quarter’s revenue.

For Q418, Apple guided for revenue between $60 billion and $62 billion.

Live notes from Apple’s Q318 Conference Call in reverse chronological order:

• End of the conference call

• AAPL after hours: $197.05, +6.76 (+3.55%) @ 6:00PM EDT

• Cook: It is clear from my communications with customers that some are attracted to iPhone thanks to Apple Watch and AirPods; the reverse of that is also true
• Cook: A lot of people that buy Apple products buy for the whole ecosystem even if they do not utilize the entire ecosystem to start

• Apple has not conducted an analysis of how many people opted for low-cost battery replacement vs. buying a new iPhone
• iPhone X shows that when you deliver a great innovative product, people want it
• Cook: Some smartphone replacement cycles are lengthening due to subsidy plans becoming a much smaller percentage of sales
• Cook: Smartphone market is a great market because it’s just huge.
• Cook: I think the smartphone market is very healthy
• Luca: We expect strong growth to come from iPhone, Services and Wearables

• Cook: Our revenues on Apple Music grew over 50% during Q3
• There is an extraordinary opportunity to grow streaming music
• Apple took leadership position in streaming music in the U.S. and Japan
• Apple Musc has well over 50 million listeners (paid and trial users)
• Cook: We’re really happy to be working on something that we’re not ready to talk about yet
• Apple TV 4K units and revenue grew by very strong double-digits in Q318
• Cook: Cord-cutting is only going to accelerate
• We are not ready to talk about it yet, but we are very excited about what we’ll eventually offer
• We hired two very respected TV executives last year (Jamie Erlicht and Zach Van Amburg – MDN Ed.)
• We think we can do some great original content with Oprah
• Cook: We’re very excited to work with Oprah

• Cook: Apple is optimistic about U.S.- China trade relations
• Risk associated due to tariffs is very difficult to quantify and Apple is not even trying to quantify it
• None of our products are directly affected by current tariffs; we are evaluating a fourth tariff which is in the comment period
• Cook: Our view on tariffs is that they show up as a tax on consumers, but the trade agreements that the U.S. has with China and several other countries are in need of modernizing
• Cook: This is the 4th consecutive quarter that Apple has had double-digit growth in China
• Cook: It’s clear that Apple picked up global smartphone and tablet market share in the quarter
• Cook: iPhone X is the most innovative smartphone on the market and we could not be happier that it’s been the top-selling iPhone since its launch
• Cook: We feel great about iPhone results

• Foreign exchange has been a very significant headwind over the past 3-4 years, but we’ve been able to manage that
• Luca: We are very happy to see gross margin sequentially flat for June
• Cook: We are thrilled about our pipeline that has some new Services in it as well (streaming content – MDN Ed.)
• Cook: Services results were very broad based. We couldn’t be happier with how things are going.

• The dividend is payable on August 16, 2018 to shareholders of record as of the close of business on August 13, 2018
• Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock

• Apple is providing the following guidance for its fiscal 2018 fourth quarter:
– revenue between $60 billion and $62 billion
– gross margin between 38 percent and 38.5 percent
– operating expenses between $7.95 billion and $8.05 billion
– other income/(expense) of $300 million
– tax rate of approximately 15 percent before discrete items

• 112.8 million shares repurchased during the quarter
• Apple plans to reach a net cash neutral position over time
• Net cash position $129.1 billion
• Apple opened 50th retail store in China during the quarter
• Retail and Onlie Stores had a great quarter; over 250K Today at Apple sessions
• Business Chat for iMessage seeing strong adoption
• Enterprises are are deploying Macs due to employee choice programs
• Apple is making great headway in the enterprise with iPhone and iPad
• NPD: iPad has 60% share, up from 51% YOY, in U.S. tablet market

• Almost half of iPad purchases in quarter were new to iPad
• Double digit iPad unit growth in China
• Different timing of MacBook pro launch caused unfavorable YOY comparison
• Mac: Double digit YOY growth; nearly 60% of purchase coming from customers who are new to Mac
• Other Products set a new record for the June quarter; great sales momentum for both Apple Watch and AirPods
• Services: Best results ever (double digit Services growth in every market)
• U.S. consumers (451 Research) top end iPhone customer sat was 98%
• iPhone channel inventory reduced by 3.5 million units during the quarter

• iPhone: 41.3 million units (+1% YOY), $29.906 billion revenue (+20% YOY)
• iPad: 11.553 million units (+1% YOY), $4.741 billion revenue (-5% YOY)
• Mac: 3.720 million units (-13% YOY), $5.330 billion revenue (-5% YOY)
• Services: $9.548 billion (+31% YOY)
• Other Products: $3.740 billion (+37% YOY)

• Apple grew in each of Apple’s top 15 markets
• Quarterly revenue of $53.3 billion
• Luca Maestri: We’re very happy to report Apple’s best June quarter ever

• Apple teaming with leading educators in blind and deaf schools for Everyone Can Code
• Great momentum in Everyone Can Code and Everyone Can Create projects
• Cook: First of its kind investment fun in China; $300 million China Clean Energy Fund
• Cook: We are always workign to leave the world better than we found it

• Apple TV 4K has seen major growth as cable companies adopt Apple TV 4K to deliver their content
• Cook: Apple Watch will receive major improvements with watchOS 5
• Cook: Privacy is one of the most important issues of the 21st century

• Mac App Store getting a full redesign this fall
• Cook: iOS and macOS has shared a common foundation from the very beginning; now some iOS apps will be available on the Mac with macOS Mojave
• Cook: Apple is uniquely positioned in AR because of control of both hardware and software

• AAPL after hours: $196.08, +5.79 (+3.04%) @ 5:12PM EDT

• iOS 12 adds tools to help customers understand and take control of the time spent with iOS devices
• With iOS 12, Siri will take a major step forward with Siri Shortcuts
• WWDC 2018 previewed many advancements coming this year to macOS, tvOS, iOS, and watchOS
• Wearables up over 60% YOY (Apple Watch grew in mid 40% range YOY); AirPods sales are strong

• CVS and 7-11 will roll out Apple Pay across the U.S. this year
• Apple Pay over 1 billion transactions last quarter
• All-time highs for number of FaceTime calls and Siri requests
• Apple seeing strong growth in services; Appel Music grew over 50% YOY
• Rapid growth in App Store search ad business
• Apps are generating tens of millions of jobs around the world
• App Store generated nearly twice the revenue of Google Play so far in 2018
• App Store turned 10 years old this quarter
• Cook: Paid subscriptions have now surpassed $300 million; revenue from subscriptions counts for a significant portion of Services

• AAPL after hours: $195.89, +5.60 (+2.94%) @ 5:04PM EDT

• iPhone X was the most popular iPhone in the quarter as it has been since it’s release

• This is Apple’s fourth consecutive quarter of double-digit revenue growth
• Apple CEO Tim Cook: We’re proud to report our best June quarter ever driven by continued strong sales of iPhone, Services, and Wearables.

• Conference call begins

• AAPL after hours: $196.45, +6.16 (+3.24%) @ 4:55PM EDT

• Apple revenue by segment:
 – Americas: $24.542 billion (+20% YOY)
 – Europe: $12.138 billion (+14% YOY)
 – Greater China: $9.551 billion (+19% YOY)
 – Japan: $3.867 billion (+7% YOY)
 – Rest of Asia Pacific; $3.167 billion (+16% YOY)

• AAPL after hours: $195.19, +4.90 (+2.58%) @ 4:50PM EDT
• AAPL after hours: $195.05, +4.76 (+2.50%) @ 4:45PM EDT

SEE ALSO:
Apple beats Street with best June quarter ever – July 31, 2018