-Oppenheimer, Cook, and the Treasurer will be doing Q/A after the announcements.
-All time records for iPhone, iPad, Mac for June, Apple is extremely happy
-Tremendous increase due to iPhone, iPad, and Mac sales. Operating margin 9.4 billion. Net income was 7.3 billion.
-Quarter details: June record with 3.95M Macs (14% increase from last year Q3). Mac sales were strong in Asia/Pacific – 57% YOY increase in total Mac sales. Healthy Mac growth in both desktops and notebooks.
-Apple has announced that OS X Lion is launching tomorrow.
Continue after the break
-Total iPod sales were ahead of expectation. 50% of iPods sales were iPod touch. iPod top selling Mp3 player in most countries that Apple tracks. iTunes had 1.4 billion dollars in revenue.
-Talking about iPhones: 142% YOY growth, iPhone available in 228 carriers in 105 countries as of Q3 closing. 5.9 iPhones in channel inventory to support strong new carriers, distribution and demand.
-Lots of Fortune 500 companies testings iPads and iPhones. Companies include Nestle, Dow Chemical and Comcast.
-“We sold every iPads we could make.” Ended quarter with iPad distribution in 64 countries. 1.05 million iPads in channel inventory. 200,000 increase.
-Stronger international adoption in the enterprise of iPads. 1000s of iPads deployed by companies like SalesForce.
-Alaska and American Airlines using iPads instead of pilot’s paper books. Apple is delighted about these diverse and unexpected use cases.
-220 million iOS devices – all time.
-Talking about iOS 5: Notification Center, PC Free, iMessages, Newsstand – this fall. Talking iCloud: looking forward to its fall release.
-2.5 billion dollars in revenue for developers.
Retail: 3.5 billion in revenue. 36% increase due to more Mac, iPhone, and iPads sales. 13% increase in in-store Mac sales. Four new stores in the quarter (Germany, 2X France, UK).
-Personal setup: 2 million setups for Macs, iPhones, iPads.
-30 new stores in the September quarter: Hong Kong includes (20 new stores internationally)
-Apple’s cash: 76.2 billion after the June quarter. 10.4 billion increase from last quarter. 131% YOY increase for operations cash.
-Accounting implications: “Minor” updates will be free for OS X and iLife. Apple will still charge for the periodic major upgrades. Apple defers a portion of Mac and iOS revenues to their accounting of each individual device sales.
-Forward looking for September: 25 billion revenue, 38% gross margin, tax rate is 24%. EPS $5.50.
-Apple is “extremely pleased” about their remaining pipeline for the rest of the year.
Q and A:
Q: Why do you think the September quarter will have more conservative results? A: September is more weighted towards education. September is still expected to be a significant increase.
–FUTURE PRODUCT TRANSITION IN SEPTEMBER. Will effect the quarter.
Q: iPad 2 sales trends. A: Tim says some customers chose to buy a new iPad instead of Macs. Believes more people chose iPads over Windows PCs.
Q: Updates on China? A: Tim says China was very key for Apple’s Q3 results.
Q: IP strategy? A: “We want people to invent their own stuff.”
Q: Why did the iPhone market improve? A: Developing countries.
Q: Milestones for iPhone? A: Apple is focused on the iPhone, developing new partners. “Apple is working new [carrier] relationships.”
Q: Thoughts on Google’s Android activation numbers relative to Apple’s business. A: Unlike Android’s numbers, Apple’s are easy to tally because there are three devices: iPads, iPhones, iPod touches. No shortage of iPad 2 demand. Gaining traction in enterprise. Apple feels very good about their roadmap relating to these iOS devices. iPhone is the clear leader in customer satisfaction.
Q: Thoughts on Apple TV. A: Apple TV is still considered a hobby by Apple. Apple does not want anyone to conclude that the Apple TV is a leg of Apple’s figurative stool. Apple and the customers love the Apple TV. Apple got it right when they did the new Apple TV last fall. Apple is continuing to invest in it because they think there is something there.
Q: Apple non-retail channel thoughts? A: 115,000 points of sale for the iPhone. Apple does not want to get into suppliers in any detail. That is a part of the Apple magic: “secret sauce.” Tim Cook says Apple is always making the right decision in terms of their supply chain.
Tim Cook: OS X Lion is a revolutionary change.
MacBook Pro makes up a majority of Apple’s Mac sales.
27th consecutive quarter that Apple beat the market in Mac sales
Q: Color on iPad product issues? A: Into July, iPad 2 supply has further improved. Some iPad 2 SKUs in some countries are balancing out in supply/demand.
Apple sold more iPads to EDU than Macs last quarter.
Q: Talk about iCloud? A: Apple can’t wait to get iCloud and iOS 5 to customers this fall. Apple is making this very easy. Oppenheimer says Apple is good at the internet.
Q: What has Apple learned about media consumption with the iPad? A: If 10 people told you why they use an iPad, you’d get 10 different answers.
Q: On China? China Mobile? Pre-paid phones? A: Pre-paid or unlocked phones (phones without contract) are very key in China. And very key in a number of emerging markets where credit systems are not as well established as in Western Europe, USA, Japan, etc. The iPhone volume for the first 3 quarters of the fiscal year was up 5X year over year. We are not saying at all how to play perfectly in the environment. We have more to do and more to learn. We feel very good about our progress. We are taking those learnings and applying them to other markets as well.
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