Thanks for the great assist, Robert, and thanks to all our readers for hanging out with us for our live coverage.
That's it. Apple is shutting it down. Again, not one question about Steve. All the analysts focused on iPad, iPhone, and Mac, with emphasis on margins and availability of iOS devices.
I'll be in TMO's Apple Finance Board for continuing discussions on Apple's results.
Robert (aka DawnTreader)
Tim Cook: Enterprises are realizing staff productivity is more important than product uniformity. The statement is in response to a question about Apple products in the workplace and Apple products being brought to work by employees.
Tim is calling the swift embrace by Enterprise of the iPad and iPhone as remarkable in just how quick it's been.
Tim adds that the simplicity with which developers can deploy on iPad makes it a good option for many businesses.
New analyst asked about consumerization of the Enterprise space. Tim says that this is a big trend, and that Enterprise is moving away from homogenization.
An analyst (didn't catch his name) asked if Apple thinks of MacBook Air as a tablet or a notebook. That's gotta be the stupidest question I've heard at a conference call in some time.
Commentary: In the Americas (exclusive of the retail stores), Mac unit sales were up 15%. This is a slower pace of growth than the unit sales for the company as a whole, but may represent the one bright spot in the domestic PC market that has reached maturity.
Still no questions about Steve. This is in direct contradiction to my personal expectations. Analysts are clearly confident in Apple's future.
"Our integrated approach is much better for the customer." He says that users don't want to be system admins, and that iPhone allows this. I agree.
"We fundamentally believe that our integrated approach offers a far superior experience" to the competition's fragmented approach. Heck yeah!
Tim is saying that iPhone outgrew the smartphone market, and that he iterated that they could have sold more if they could have made more. He's also touting customer satisfaction and the App Store.
Peter O: Guidance is a 63% gain in revenue for the March quarter and eps gain of 50% (actually 47% at $4.90). The is more aggressive guidance than recent quarters but will most likely be conservative again. There's no reason based on the anticipated gross margin for eps growth to fall below the growth in revenue.
ben Reitzes is asking for more on Android, specifically about Steve's trash talking during the last conference call.
Again, that was a silly question.
Peter Oppenheimer points out that while he guided down sequentially (quarter-over-quarter), it's 63% higher than last year. He also noted that iPad was a hot Christmas present, and that they won't sell as many this quarter.
Ben Reitzes is asking why Apple's revenues will decrease sequentially in the March quarter. it's a strange question considering Apple's historically larger December quarter, but the context is about adding Verizon for iPhone.
Keith's follow-up is about whether iPad is still a consumption device, vs. a creation device. Tim says that it's just a large market, period.
Keith Bachman is asking if iOS adoption is affecting Mac adoption. Tim said rounadboutly that everything is working together.
Tim is emphasizing that the iOS and Mac OS X hardware groups work together. He said there isn't a "Not Invented Here" attitude between groups. He also said that they share ideas, like instant-on, which went from iOS to MacBook Air.
Tim Cook is acknowledging the "halo effect" of Apple products. This is well know to observers, but is being confirmed by management. His statement is in the context of a question about cannibalization of Mac sales by the iPad.
Tim also said that if iPad is cannibalizing PC sales as a whole that Apple has more to gain because of its small share of the PC biz.
Tim Cook acknowledged that there has been cannibalization of Macs from iPad, but countered that there is also a halo effect. He also noted that Mac sales far outpaced market growth all over the world.
Tim offers a non-answer, hinting that there are ongoing talks with other carriers. My guess is that this means China Mobile. He emphasized that the customer interest is there.
Tomi Sacconaghi is asking why Apple only has one carrier in China. Are their hindrances or other impediments keeping Apple from adding another in the world's largest market.
Last fiscal year iPhone unit sales were sequentially flat in the March quarter. Apple ended the December quarter with channel inventory of about 3.5 million units, barely three weeks of supply and indicating constrained supplies of the product remain a challenge.
Tim said he doesn't expect ASPs to decrease in the current quarter and won't comment beyond that.
Tim is deflecting the global question by saying that they're always looking at their current markets and for other markets. he's reiterating that Apple's smartphone share has increased whenever they've added more than one carrier in a market.
Toni Sacconaghi asking of Verizon iPhone will affect ASPs for iPhone. Also, will other CDMA carriers in the world get the iPhone now that Apple has one for Big Red.
I concur with Robert. Tim sounds very confident, very calm. Assertive.
Tim also said that if you hold an iPad side by side with existing Android devices, that people will pick the iPad. He said that the announced Android devices from CES aren't shipping and actually called them "Vapor!" Ballsy.
As for Android, Tim points out that Google has recommended not using Android for tablets. And he said that the market has been using the OS on devices Apple thinks is too small.
Commentary: Tim Cook sounds strong, confident and in command of all areas of subject matter relating to Apple's products and product markets.
Tim is poopooing Windows tablets. "From what we've seen, customers are frankly not interested in them."
Bill followed up with a question about competition. Here we go!
Tim won't comment definitively, but Peter notes their track record is good and that he's confident. In other words, expect improved margins going forward. :)
Bill Schoebel from Goldman Sachs is asking about gross margins for the iPad in terms of new designs. Past products have seen improved margins as new iterations came out. Will iPad?
In the quarter the company generated $9.8 billion in cash flow from operations, in contrast to net income of $6 billion.
Tim says that there weren't great options for chip design, but were plenty of options for fabs, which is why they invested in chip designers (as in buying too design companies).
Tim says metal prices are increasing, but that some other components will be favorable.
Revenue rose 175% in the Asia Pacific region (exclusive of Japan) year-over-year and 65% sequentially, representing about 18.6% of total revenue.
Richard Gardner from Citi is asking about component pricing.
Tim notes that Macs have grown 19 of the last 19 quarters, growing share all the while, but that Apple's PC share is still quite small. In other words, there's plenty of room for growth.
Notice there's not been one question about Steve Jobs and his medical leave of absence. In this case, silence speaks louder than thunder.
iPhone unit sales rose 86% to 16.235 million units and revenue rose 88% indicating average selling prices are holding as unit sales expand.
Tim says that Apple is placing "more and more resources" in Asia, and though he didn' specify, I would imagine most of that "more and more" is in China.
Tim says Apple did $2.6 billion in China last quarter, up 4x over the prior quarter!
Katy's followup question is about what Apple is doing to sustain its growth in Asia. Tim says that the company is targeting China as its priority.
Tim says they need to keep working on Phone 4 availability. He's delighted demand is still so high, and won't predict when supply/demand will come into balance.
Tim Cook: iPad expanding to 60 territories this quarter.
Back to Katy Huberty of Morgan Stanley. She's asking about iPhone and iPad availability. Tim says Apple is in supply/demand balance for iPad.
Shannon was asking how many iPhones Apple thinks it can sell, and Tim Cook is giving a general answer with no real information. "We're going to sell as many as we can."
The revenue segment inclusive of iTunes realized a revenue rise of 23% to $1.431 billion which also represented a sequential revenue gain of 15%.
Except she's not there. Now we have Shannon Cross asking about Verizon iPhones.
Katy Huberty from Morgan Stanley is first up.
Treasurer Gary Whippler (I think) and COO Tim Cook are joining the call.
Wow, guidance of 38.5% gross margins. Remember, Apple has historically been quite conservative on these estimates.
Second fiscal quarter guidance of $22 billion and eps of $4.90.
Gross margins at 38.5% and above analyst expectations.
77 million visitors to Apple retail stores during the quarter! That's up from what I think he said was 54.5 million last year.
Retail revenue up 95% with a 24% increase in Mac unit sales through Apple's retail channel, slightly above the unit sales growth for the company as a whole.
Four China stores were highest traffic and highest revenue stores in the world. That's stunning.
Retail sales have doubled...
Peter is sticking with the 300,000 number for apps available on the App Store - i.e. no new milestones to announce.
160 million iOS devices have been sold through the end of the December quarter. That includes iPhones, iPads, and iPod touches.
iPad unit sales up sequentially 75%, but revenue rose 65%. Perhaps more Wi-Fi only devices in the sales mix.
Many Fortune 100 companies are working on deploying iPhones and iPads.
Peter says that they could have sold more iPhones if they could have made them.
iPhone ASP at $625, up from $610 last quarter.
iPod unit sales down 7% year-over-year at 19.446 million units. The decline was expected by most analysts.
Peter Oppenheimer said that iPod still has 70% market share int he digital media device market.
7.331 million iPad units sold. Well beyond most expectations.
Mac unit sales up 23%, but desktops unit sales down 1%. Clearly, the portable line, including the refreshed MacBook Air, were a hit at 37% unit sales growth.
Earnings per share rose 75.2% to $6.43 per share.
Revenue rose 70.5% to $26.741 billion.
Well, it's already backed off, but still at $347.43, up $6.78 (+1.99%).
AAPL is in record territory afterhours. Working up a quick report.
Full coverage of earnings posted: Apple Posts Record Q1: $26.7 Billion Revenue, $6 Billion Earnings <
We have lift-off! eps of $6.43!
I'm signed in and ready for the call.
Check back here January 18, 2011 at 2:00pm Pacific Standard Time for live coverage of Apple's 2011 Q1 earnings call
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