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Apple Earnings Report Q2 - 2012 on April 24th, 2012

[4:23 PM] Dave: Watch this space for live coverage of Apple's WWDC keynote on Monday, June 11th. We'll start posting early Monday morning. See You Then!
[3:06 PM] Dave: For ongoing coverage, as always, please follow along at http://www.macobserver.com/
[10:01 PM] Bryan: Thanks for joining us.
[10:00 PM] Bryan: That's it! Check out The Mac Observer's home page for more detailed coverage of today's results and news from the conference call.
[10:00 PM] Bryan: Tim also said that the number of iPads Apple will be able to make will be "significant," but didn't specify.
[9:59 PM] Bryan: New analyst asking if Apple will be able to meet iPad demand next quarter. Tim said that Apple will be able to improve supply, but doesn't know if it will meet demand.
[9:57 PM] Bryan: Tim said that yes, Apple has more sales people in Enterprise and that the company is working with more third parties, but didn't elaborate.
[9:57 PM] Bryan: Tim said that Apple is seeing a lot of customer wins coming from across the board in Enterprise.
[9:56 PM] Bryan: Tim said 94% of Fortune 500 are testing or deploying iPad. 70% of Global 500 are doing so.
[9:55 PM] Bryan: Same analyst asking what Apple is doing to work with Enterprise.
[9:55 PM] Bryan: New analyst asking if Apple's gross margin guidance is conservative. Peter said that he expects higher mix of iPads and Macs, which have lower margins.
[9:51 PM] Bryan: Shaw Wu asked about China Telecom, when it launched. Tim said early March, and that they were in Supply/Demand balance.
[9:50 PM] Bryan: Peter said that customer feedback on iCloud has been "off the charts."
[9:49 PM] Bryan: Tim also said that if they could find an equitable settlement for past infringement, they would, but that people need to invent their own stuff.
[9:48 PM] Bryan: Tim said that Apple just wants people to invent their own stuff. "It's very important that Apple not become the innovator for the world."
[9:48 PM] Bryan: Tim: "You know, I've always hated litigation, and I still hate it."
[9:48 PM] Bryan: New analyst asking about Apple's future flexibility in patent litigation.
[9:47 PM] Bryan: Peter is guding for 41.5% gross margins for June quarter. Thats down from this quarter, but attributed much of it to one-time issues benefitting March.
[9:46 PM] Bryan: He also argued that Spain's market subsidy changes aren't a proxy for the world market because of specialized circumstances.
[9:45 PM] Bryan: He said that Spain is simply in a mess economically.
[9:44 PM] Bryan: Tim said that Spain was weak for Apple (though still up year over year), but said it wasn't related to the subsidy issue.
[9:44 PM] Bryan: Keith asked if changes in Spanish iPhoen demand due to subsidy changes in that market.
[9:42 PM] Bryan: Tim said that China is not Supply/Demand balanced, however.
[9:42 PM] Bryan: That's pretty interesting considering the December quarter release for the device.
[9:41 PM] Bryan: Tim said that Apple's "desire" was to increase channel inventory for iPhone. He said that Apple exited the quarter with Supply/Demand balance.
[9:41 PM] Bryan: He also asked if channel supply for iPhone will decrease in June.
[9:40 PM] Bryan: Keith Bachman is up next. Asking Tim about iPhone in Asia Pacific. Is Supply/Demand in balance?
[9:40 PM] Bryan: Gut take on the supply issue: Apple won't be releasing iPhone 5 until the fall.
[9:39 PM] Bryan: That product is expected to be short on supply. Tim said he can't comment, but noted that Apple works very closely with all its partners.
[9:39 PM] Bryan: What Ben is wanting to know about is some announced products from Qualcomm that would be great for Apple, like the world-chip that would let one iPhone work everywhere.
[9:38 PM] Bryan: This isn't a stupid question, and Tim confirmed that by calling it a tough one to answer.
[9:38 PM] Bryan: Ben Reitzes up next. He's asking about component supply constraints for products that Apple hasn't announced.
[9:37 PM] Bryan: $1.9 billion in revenue for iTunes in March quarter, according to Peter.
[9:36 PM] Bryan: Tim said that iPhone 4S is doing well in China. Mac is available in 1,800 points of sale. 11,000 for iPhone, 2,500 for iPad.
[9:34 PM] Bryan: Tim called it a record quarter of $7.9 billion in revenue in China. Apple is over $12 billion in revenue during 1H of 2012 for China, compared to $13 billion for all of 2011.
[9:33 PM] Bryan: Gene Munster of Piper Jaffray is on tap. He's asking for more details on China.
[9:32 PM] Bryan: He concluded with the idea focusing on subsidies misses the boats, and that iPhone is important to carriers.
[9:31 PM] Bryan: Tim also argued that iPhone represents the best device to lure customers from feature phones to smartphones, and that this benefits carriers.
[9:31 PM] Bryan: He called that an advantage for the carriers. He also said that iPhone has better data usage efficiency.
[9:30 PM] Bryan: Tim said that iPhone has executives at carriers have told him that iPhone customer churn is lower than any other smartphone.
[9:30 PM] Bryan: Tim replies that Apple's focus is on making the best smartphone possible and that they are innovating at an unbelievable pace.
[9:29 PM] Bryan: Bill Shope asking about analyst concerns over carrier subsidies decreasing going forward.
[9:28 PM] Bryan: Tim noted that there continues to be a market for MacBook Air, and that mixing it with IPad will result in disappointing products.
[9:27 PM] Bryan: TIm is pointing out that forecasts from IDC, Gartner, etc., show tablet sales at the same levels of PCs today.
[9:26 PM] Bryan: Tim pointed out that since iPad's initial release, Apple has sold 67 million units. It took 24 years to sell that many Macs and 5 years for iPod.
[9:25 PM] Bryan: He is not-so-subtly saying that Microsoft's efforts to marry tablets to PCs is a poor choice that will result in products no one is happy with.
[9:24 PM] Bryan: Tim said anything can be *forced* to converge, but said that you get tradeoffs that way. For instance, you can converge a toaster and a refrigerator...
[9:24 PM] Bryan: He also asks why Apple doesn't see MacBook Air and iPad converging in the future?
[9:23 PM] Bryan: Toni is following up with question about the market for PCs and tablets going forward. Does Apple still see tablets eclipsing PCs?
[9:23 PM] Bryan: Tim said that because supplies are still constrained, that even Apple doesn't know yet what the mix of iPad 2 to new iPad is.
[9:22 PM] Bryan: Tim said that the lower priced iPad 2 has "probably" unlocked some education demand, as that market is more price sensitive.
[9:21 PM] Bryan: Toni Sacconaghi is up now. He asked more about iPad sales.
[9:20 PM] Bryan: Tim also said that there is some iPad cannibalization of Mac sales, but that the Mac is doing well.
[9:20 PM] Bryan: Tim Cook says the compare to last year (up 7%) is a tough compare because last year saw new portables announced.
[9:19 PM] Bryan: Richard Gardner asking about Mac sales growth. Apple still outgrew the market (24th quarter in a row), but it's slower than recent quarters.
[9:18 PM] Bryan: Katy Huberty is asking if lower price iPad 2 units are showing Apple that it needs cheaper iPads. Peter scoffed, politely...
[9:16 PM] Bryan: New iPad rollout called "fabulous." Said that Apple was able to satisfy "much more" of the demand for the device this year.
[9:16 PM] Bryan: Peter called iPhone 4S execution "excellent."
[9:12 PM] Bryan: Margins were 540 basis points (5.4 percentage points) higher than estimated.
[9:11 PM] Bryan: 85 million visitors to Apple Stores in quarter. 18,000 visitors per store per week.
[9:10 PM] Bryan: Two new Apple Stores opened during the quarter, one in Netherlands and one in Houston. 366 stores at end of quarter.
[9:10 PM] Bryan: 125 million iCloud customers have signed up for the service.
[9:09 PM] Bryan: More than 200,000 iPad apps now on App Store.
[9:09 PM] Bryan: 365 million cumulative iOS devices sold to date!
[9:09 PM] Bryan: U.S. Air Force Air Mobility Command is deploying "thousands" of iPads as flight manual replacements.
[9:08 PM] Bryan: Two iPads for every Mac in K-12 channel in U.S.
[9:08 PM] Bryan: 2 million iPads in channel inventory. That's down from last quarter and below target.
[9:07 PM] Bryan: iPad is now in 40 countries. Sales doubled in all segments.
[9:07 PM] Bryan: After market AAPL is now at $601.03, up $40.75 (+7.27%).
[9:06 PM] Bryan: iPhone 4S is now in 100 countries with 230 carriers.
[9:05 PM] Bryan: iPhone growth was strong across all segments, but Asia Pacific led with 100% growth.
[9:05 PM] Bryan: 28 million songs and 45,000 movies on iTunes now.
[9:04 PM] Bryan: iPod share is still over 70%. It's amazing.
[9:03 PM] Bryan: Peter is mentioning Mountain Lion...
[9:03 PM] Bryan: Mac sales of 4 million units was a new record quarter.
[9:02 PM] Bryan: Peter Oppenheimer is up. "Very pleased" to report results.
[9:02 PM] Bryan: Conference call has begun.
[9:01 PM] Bryan: Checking in. Hold music on.
[3:23 PM] Adam: Check back here at 5:00 PM (EDT) for our live coverage of Apple's Financial Results Conference Call Q2 - 2012
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