Live notes will begin today at 2pm PDT/5pm EDT in reverse-chronological order:
• End of conference call
• Apple exploring various ways to improve App Store app discovery, categorization, and promotion
• Apple hopes to have iPhone in China “within a year”
• When will iPhone 3G to reach supply-demand equilibrium? Apple won’t predict
• A “good number” of iPod touch owners upgraded to iPhone OS 3.0 for US$9.99
• Apple views pre-pay as an opportunity and is trying it in markets where that is the predominant way of paying
• Apple wants to deliver products about which they can be proud
• Many cheap netbooks are slow, small displays, cramped keyboards and Apple thinks people won’t be happy with such products
• Apple thinks most customers that are buying a portable want a full-featured notebook
• Mac has outgrown the market in a staggering 18 out of the last 19 quarters
• Apple feels very good about their Mac pricing
• Apple believes that customers who buy these low-priced PCs become disappointed
• Apple does not see a way to build a great personal computer product at $399/$499 price points
• Tim Cook: Apple’s goal is not to build the most computers, it’s to build the best
• Apple has a substantial lead – years ahead of competitors – in iPhone apps, hardware, and operating system
• App Store in 70 countries; now reaches installed base of over 40 million devices (iPhone and iPod touch)
• Apple has just shipped the next major version of the world’s most advanced mobile device OS
• Apple began and ended quarter within 4-6 week inventory range on traditional iPod models
• Apple reduced traditional iPod (shuffle, nano, classic) inventory by 400k due to having new iPod shuffle launch and Easter holiday behind them
• iPhone 3GS only shipping in 18 countries vs. the 80 countries in which iPhone already sells; 3GS will ship to more countries this quarter
• Apple saw people deciding to buy 13-inch aluminum MacBook Pro vs. $999 polycarbonate MacBook due to the value offered with the new model
• Apple will not reveal exact mix numbers for Mac models for competitive reasons
• Apple has pre-paid $500 million to Toshiba to secure NAND flash supplies
• When Apple can sell such computers for less they will. When they can’t, they won’t. Apple won’t put their logo on cheap computers that don’t merit the Apple Mac brand name
• Apple’s goal is to build the best computers in the world
• Apple very happy with how new MacBook Pros are selling
• iPhone channel inventory flat throughout the quarter; about 1.83 million units; demand continues to outweigh supply
• Apple is going to provide customers ever-increasing value
• Apple expects margins to decline sequentially as component costs are expected to increase
• Apple expects traditional iPods to continue to gradually decrease while sales of iPod touch are expected to increase
• Apple expects Macs to sequentially decrease next quarter as all portables were refreshed last quarter
• JD Power: iPhone ranked highest among smartphones in overall customer satisfaction
• iPhone OS 3.0 and iPhone 3GS doing particularly well in corporate and gov’t settings where employees are allowed to buy their own phones
• iPhone 3GS currently constrained in every country in which it ships; Apple working very hard to fulfill that demand
• Apple believes business customers may be delaying Mac purchases somewhat due to economy
• Units grew faster than revenue in portable Mac sales due to price changes and transition costs
• Pro business affected more by macro economic conditions than consumer
• K-12 education spending hit by budget shortfalls
• Cook: We have an excellent relationship with AT&T Mobility and are very happy with it
• iPhone carriers are thrilled with lower churn and higher customer demand
• Apple COO Tim Cook: A couple of MacBook Pro models are somewhat constrained, we expect to catch up within the next several weeks
• Apple very enthusiastic about upcoming launch of Mac OS X Snow Leopard
• Apple is a debt-free company
• $2.3 billion in cash flow for the quarter; Apple now has $31.1 billion in cash on-hand.
• 667,000 personal training sessions held in retail stores during quarter
• 258 Apple Stores now open; average of 254 stores open during the quarter, $5.9 million per store
• As of last week, customers have downloaded over 8 billion songs from iTunes Store
• iTunes App Store is a key differentiator between iPhone and all other competing devices
• 3GS rollout to the 80+ iPhone countries coming this year
• iPhone 3GS demand exceeds supply. Apple working hard to make enough to satisfy demand
• Q409 guidance: Revenue in the range of about $8.7 billion to $8.9 billion and diluted earnings per share in the range of about $1.18 to $1.23
• iPhones sold were 5.2 million, representing 626% unit growth over the year-ago quarter. Bloodbath.
• About 50% of new traditional iPod buyers are buying their 1st iPod
• Traditional (ono-touch) iPod sales are being cannibalized by iPhone and iPod touch – part of Apple’s plan
• Apple reduced iPod channel inventory by 400,000 during the quarter.
• 10.2 million iPods during the quarter, representing a 7% unit decline from the year-ago quarter
• Apple sold 2.6 million Macs during the quarter, a 4% unit increase over the year-ago quarter
• Non-GAAP: $9.74 billion of “Adjusted Sales” and $1.94 billion of “Adjusted Net Income”
• Best non-holiday quarter revenue and earnings in Apple history
• International sales accounted for 44 percent of the quarter’s revenue
• Gross margin was 36.3 percent, up from 34.8 percent in the year-ago quarter
• Vs. revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share, in the year-ago quarter
• Apple posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share
• Apple (AAPL) shares are currently up $5.55, or 3.67%, to $157.16 in after-hours trading
