MacDailyNews presents live notes from Apple’s Q412 Conference Call

MacDailyNews presents live notes from Apple’s Q412 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Live notes from Apple’s Q412 Conference Call in reverse chronological order:

• End of conference call.

• AAPL @ 5:59pm EDT: $609.80, +$0.26, +0.04%

• Cook: Pixel resolution is the same in iPad mini as in iPad 2, so all 275,000+ iPad apps work seamlessly on iPad mini
• 7.9-inch vs. 7.0-inch is 35% in surface area and usable size is much greater than that
• Cook: We would not make a 7-inch tablet. We don’t think they are good products. We would never make one.

• Cook on LCD and Samsung: I wouldn’t characterize any change there are increasing costs; we continue to be a customer of Samsung
• Cook: I would not say there has been a significant change in our supplier partners
• Cook: We will stay true to making the very best products
• Cook: We’ve seen low-cost challengers before and iPad continues to beat every product on the market at every price

• Cook: “iPhone 5 demand is VERY robust.”
• Cook: I feel great about where iPhone 5 is on supply ramp; output significantly higher now vs. early Oct.; cannot predict supply and demand balance
• Cook: iPhone 5 launched first in U.S., so that’s why iPhone revenue grew in the U.S. vs. rest of world

• Oppy: iPhone ASP were relatively flat; up slightly YOY; iPad ASPs were down YOU in a “low double digit way” which was reflective of iPad 2’s new lower price; on a sequential basis, iPad’s ASPs were relatively flat

• Cook: iMac will be constrained for the full quarter in a significant way; 27-inch doesn’t ship until December
• Cook: I don’t see a component shortage gating us for the quarter in terms of iPhone and iPad; I think we’ve solved some of the issues [with iPhone 5 production]

• Cook: iPhone and iPad not being tested or deployed in over 80% of Fortune’s Global 500
• Cook: Apple will not make a product that people will feel good about when they’re buying it and then not use it much afterwards
• Cook: With iPad mini, as with all Apple products, we wanted to create a product that people will love and use for years

• Oppy says iPad mini is priced very aggressively; margins are below traditional levels at Apple Inc.
• Oppy reviews all of iPad mini’s benefits including build quality
• Oppy: We set out to build smaller iPad with iPad mini, not a smaller cheaper tablet. iPad mini provides a much better experience than cheap 7-inch tablets
• Cook: We planned the rollout to the first 30-40 countries prior to introducing iPhone 5; the balance of the quarter we planned with and eye on supply and what we think the demand will be

• Oppy: We’re thrilled to be providing guidance of $52 billion in revenue
• Oppy: If you’re looking at YOY and comparing quarters, do not forget the 14-week quarter in Q111.

• Cook expects an “incredible holiday season.”
• Cook: On a YOY basis, the iPad sell through actually grew 44%
• Cook: It’s clear that customers delay iPad purchases when new products are anticipated

• AAPL @ 5:38pm EDT: $605.85, -$3.69, -0.61%

• Cook: Apple TV still has “hobby” label, but it’s a beloved hobby and we’ll continue to explore it
• Apple TV: 1.3 million units sold in quarter, up over 1000% YOY; sold over 5 million Apple TVs in fiscal year (vs. 2.8 million in FY11)

• Cook: Most people who buy a Windows PC would be much better off buying an iPad or a Mac – Apple has an enormous opportunity
• CooK on iPad mini: We provide fantastic products and customers will decide which one or two or three or four of each product they want and what they want to do with them

• Cook: You could design a car that flies and floats, but it wouldn’t do anything extremely well
• Cook: With iPad, the user experience is incredible
• Cook: I haven;t personally played with a Surface, yet, but what we’re reading about it is it’s a fairly compromised and confusing product
• China: Revenue 5.7 billion up 26; Mac up 44%; iPad up 45%; iPhone up 38%; $23.8 billion revenue from China in FY12

• Cook: We can’t wait until next Friday when we begin selling new iPad mini units
• Cook: We do think that the iPad and the iPad mini and the iPad 2 will all be extremely attractive offerings in lieu of PCs
• Cook: We’re confident that tablet market will exceed personal computer market
• Cook on larger iPads than 9.7-inch flagship: We do not comment on future product roadmaps

• As we launch new products, we have learning curves with manufacture; this is Apple’s most prolific period of new product introduction in company history
• Apple plans to roll out iPhone 5 to 100 countries, including large countries in month of December
• Cook: iPhone 5 the largest volume ramp in history. Cook is happy with current output levels. Difficult to say when supply will meet demand
• iPhone 5 supply ramp: Cook: Demand for iPhone is “extremely robust.” Our output have improved significantly since earlier this month.

• Cook: We are managing the company for the long run and remain very confident in our strategy
• Cook: We are unwilling to cut corners in delivering the very best experience to our customers

• Apple working hard to improve manufacturing costs as they’ve done in the past
• Oppy: Margins on new products are lower than predecessors; have been very aggressive on iPad mini pricing
• Oppy: iPhone 4 is free in subsidized markets; iPad mini is priced aggressively; delivering incredible value to customers
• New products and massive changes in product lines have significant costs associated with them = lower gross margin; nothing new
• Q113 Guidance: 14 week quarter last year vs. 13-week next year

• Apple very confident in product pipeline and lineups for holiday shopping season
• Record 18 million Macs sold in fiscal year

• AAPL @ 5:08pm EDT: $601.01, -$8.53, -01.40%

• Total cash on hand is now $121.3 billion as of end of quarter
• 24.5% tax rate; 25.2% for full fiscal year
• 22% increase in store traffic YOY
• Total of 390 stores now open, 40 of them outside U.S.
• 18 new stores opened over quarter
• Apple Retail growth: 1.1 million Macs sold – new record

• Maps app is being improved rapidly
• iOS 6 now on over 200 million devices
• Over 190 million total iCloud account signups since launch

• 3.4 million iPad units in inventory, +200,000, or just over Apple’s channel inventory target of just over 4 weeks

• AAPL @ 5:08PM EDT: $600.77, -$8.77, -01.44%

• 9.1 million iPhones in channel inventory at quarter’s end, below target range of 4-6 weeks
• Oppy: “iPhone 5 demand has been phenomenal; demand continues to outstrip supply

• Apple CEO Peter Oppenheimer: “Looking ahead to the first fiscal quarter of 2013, we expect revenue of about $52 billion and diluted earnings per share of about $11.75.”

• Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock payable on November 15, 2012, to shareholders of record as of the close of business on November 12, 2012.

• 4.9 million Macs (1 percent unit increase YOY
• 14.0 million iPads (26 percent unit increase YOY)
• 26.9 million iPhones (58 percent unit growth YOY)
• 5.3 million iPods, (19 percent unit decline YOY)

• International sales accounted for 60 percent of the quarter’s revenue
• Gross margin was 40.0 percent compared to 40.3 percent in the year-ago quarter
• Versus YOY revenue of $28.3 billion, net profit of $6.6 billion, $7.05 per diluted share
• $8.67 per diluted share
• quarterly net profit of $8.2 billion
• quarterly revenue of $36.0 billion
• Fiscal 2012 fourth quarter ended September 29, 2012
• AAPL @ 5:00pm EDT: $608.55, -$0.99, -0.16%
• AAPL @ 4:50pm EDT: $593.89, -1$5.65, -2.57%
• AAPL stock to resume after-hours trading @ 4:50pm EDT
• AAPL stock had risen by $3.74, or 0.6%, at $613.28 before being halted
• Awaiting start of call

Related article:
Apple beats Street on revenue, misses on EPS – October 25, 2012

13 Comments

  1. Can’t wait for the bears to devalue the stock again tomorrow based on missing the wild guesses of people paid to be wrong instead of using Apple’s own guidance.
    /s

    Anyone else having. Problems with iCloud and Messages?

    1. Guidance? Did you see what their guidance is for the first quarter? And the Bears and the Bulls don’t need to do anything tomorrow, the performance of AAPL is there for all to see. And in case you haven’t checked, most analysts were right on the money. Quit blaming everyone else for the performance of AAPL. So far after hours, AAPL has not tanked. Must mean that the Bulls and the analysts have manipulated it up! C’mon, pay attention. Quit crying and complaining all the time.

        1. Of course you were complaining. Read your own post. “Paid to be wrong”! As far as Apple’s own guidance, they always sandbag. Everybody knows that. I took my meds thanks. Just thought I’d complain like you.

  2. “We’re thrilled to be providing guidance of $52 billion in revenue”
    ZOINKS!!! That’s a lot of doe!!!
    I think tere are 12 weeks in this next quarter which puts this at 4.3 billion a week or over 600 million per day. That should add quite a bit of cash to the coffer.

  3. Steve Jobs: “7-inch tablets are tweeners: too big to compete with a smartphone and too small to compete with the iPad. ….7-Inch tablets are dead on arrival.

    Cook Today: “On comments that Steve made before about 7 inch tablets, let me be clear, we would not make one of the 7 inch tablets, we don’t think they’re good products, we’d never make one.”

    Cook backs Jobs. Jobs smile in Heaven.

    1. Steve was great at misdirection and that is exactly what he did. In responses like this it was always about figuring out what Steve didn’t say rather than what he did said.

    2. And true to his word AND Steve’s belief they have NOT made a 7 inch iPad, if I recall it is 7.9 inches, a tenth of an inches less than 8. Measured diagonally that is a huge difference. They have met market demand without sacrificing quality as anyone who knows this company knew they would. Anyone who wanted it smaller can still buy an iPod Touch.

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