MacDailyNews presents live notes from Apple’s Q211 Conference Call

Live notes from Apple’s Q211 Conference Call in reverse chronological order:

• End of conference call.

• Samsung lawsuit: Apple is Samsung’s largest customer. Apple expects the relationship to continue. Apple tried to resolve issues with Samsung mobile products division but decided that they had to resort to the courts.

• For competitive reasons, Apple will not divulge how many iPhone sales are to current iPhone users vs. new-to-iPhone buyers
• Cook: iPhone 4 in supply-demand balance virtually everywhere; as is Mac and iPod; iPad currently experiencing “The Mother of All Backlogs.”
• Cook: I wish we could have produced a lot more iPad 2 units during Q2 because there were certainly a lot of customers waiting for them.
• Apple Inc. (AAPL) after-hours trading: $354.29, +$11.88 (+3.47%) @ 5:30PM EDT
• Cook: Extremely pleased with iPad 2 manufacturing product ramp; going better than original iPad ramp
• During quarter, Apple drew down 1st-gen iPads by 570,000 units and added 170,000 new iPad 2 units (most of those were in transit at the end of the quarter).

• Cook: Steve Jobs remains on medical leave, but we do see him on a regular basis, he remains very involved in making major strategic decisions, and I know he wants to be back full-time as soon as possible.

• Cook: Apple feels very, very good about where they are and great about future product plans.
• Cook: iOS platform outreaches Android platform by 59% in U.S (comScore). iPhone’s integrated approach is materially better than Android’s fragmented approach.
• Apple expects to spend $5.7 billion in fiscal 2011; expects for spend about $3.5 billion on prepayment and capital expenditures on three component suppliers with $900 million of that having been spent in Q211.
• Apple is constantly looking at where they should bring on iPhone carriers

• Cook: iPad 2 supply issues: Staggering demand. Will not predict when supply and demand will come into balance.
• For competitive reasons, Apple will not provide ASPs for individual product lines.
• Cook: iPad has clearly created a “halo effect for the Mac.”
• Oppy: Apple priced iPad very aggressively to capitalize on the company’s first-mover advantage

• Cook: With Mac, Apple seems to be the only company willing to invest in making innovative products
• Cook: U.S. Mac sales up around 25% YOY; 20 quarters in a row, the Mac has outgrown the PC market

• Cook on 4G; The first generation of LTE chips forced a lot of design compromises in competitors handsets some of which Apple’s just not willing to make.

• Cook: iPhone 3GS for US$49 was “very popular. It did very, very well.”
• Apple did just under $5 billion revenue in China revenue during quarter
• iPhone sales “off the charts.” 155% in U.S. YOY (adding Verizon) and “on a tear in China” about 250% iPhone sales growth.
• Cook confident that Apple can “produce a very large number” of iPad 2 units during Q3.
• Cook: iPad 2 “heavily backlogged.” “Extremely pleased with ramp up.” 13 more countries next week.

• Tim Cook: The Japan situation is uncertain, but Apple knows of no circumstances that are unsolvable looking at things today
• Tim Cook: Apple has not had any impact, nor does the company expect any material impact, from the Japan disasters.
• Tim Cook: Japan disasters are an incredible tragedy. Apple is very, very saddened with the situation. The economic impact pales compared to the human impact.

• 38% margins expected for Q311
• Apple expects tax rate of about 25% for Q311
• 24.2% tax rate for the quarter

• 323 Apple Retail Stores currently
• Half the Macs sold in retail stores are to customers new to Mac
• Apple Retail Stores: $3.19 billion in revenue, an increase of 91%
• Apple Retail Stores: 71.1 million visitors vs. 47 million YOY, a 51% increase

• Apple has paid over $2 billion in payments to iOS developers
• Over 350,000 iOS apps
• 189 million iOS devices have been sold so far

• Apple continues to work hard to bring iPad 2 supply in line with demand
• iPad 2 inventory below 850,000, below inventory target; Appel sold every iPad 2 they could
• 5.2 million iPhones in channel inventory; within target of 4-6 weeks of channel inventory
• iPhone now on 186 carriers in 90 countries
• iPhone revenue in quarter was $12.3 billion vs. $5.45 billion YOY
• $1.4 billion total revenue for iTunes Store.
• Total iPod sales ahead of Apple’s expectations; 73% market share (NPD), 5-6 weeks of channel inventory
• Mac OS X Lion, developer preview released during quarter, schedule to ship “this summer.”
• 3-4 weeks of Mac channel inventory
• Oppy: Extremely popular MacBook Air and MacBook Pro drove Mac sales increases
• Present at Conference Call: Apple CFO Peter Oppenheimer, COO Tim Cook, Treasurer Gary Wipfler

• In after-hours trading, shares of Apple Inc. (AAPL) are currently up $9.99, or 2.92%, to $352.40
• CFO Oppenheimer Q311 guidance: “revenue of about $23 billion” and “diluted earnings per share of about $5.03”
• 95 percent quarterly profit growth
• 83 percent quarterly revenue growth: Largest ever in company history
• 4.69 million iPads sold during the quarter, as iPad 2 ramped up amidst heavy demand
• 9.02 million iPods sold during the quarter, representing a 17 percent unit decline from the year-ago quarter
• 18.65 million iPhones sold during quarter, representing 113 percent unit growth over the year-ago quarter
• 3.76 million Macs sold during quarter, a 28 percent unit increase over the year-ago quarter
• International sales accounted for 59 percent of the quarter’s revenue
• Gross margin was 41.4 percent compared to 41.7 percent in the year-ago quarter
• Versus revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, in the year-ago quarter
• Record second quarter net profit of $5.99 billion, or $6.40 per diluted share (vs. $5.37 EPS)
• Record second quarter revenue of $24.67 billion (vs. analyst consensus estimate of $23.38 billion)

• Live coverage begins at 2pm PT/5pm ET today, Wednesday, April 20, 2011.

Related article:
Unstoppable Apple beats Street with record $24.67 billion quarterly revenue – April 20, 2011

25 Comments

  1. We know where this is going and it is summarized in the word “up”.

    But I don’t see any race cares in Apple’s rear view mirror.

    That makes it even easier for Apple to surge.

  2. AAPL is on amber fire as this is just da begining of bigger numbers. The stock will be at $522 by da end of 2012 🙂
    December: AAPL =
    2011 = $422
    2012 = $522
    2013 = $624
    2014 = $725
    2015 = $828 US dollars 🙂
    BUY bye < $400 and ur money doubles by 2015 🙂

  3. It’s unbelievable how many iPad were sold during the quarter when iPad 2 was only available for a few weeks (and not in all worldwide markets for most of that time).

    Imagine what the number will be this (2nd calendar) quarter, when it is sold for the entire quarter in most of the major markets AND supply is less constrained. Apple may sell more iPads than iPods!

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.