MacDailyNews presents live notes from Apple’s Q409 Conference Call

Mac Daily News ^ | 10/19/2009

[Swordmaker]

Read from bottom up for proper sequential presentation.—Swordmaker

MacDailyNews presents live notes from Apple’s conference call discussing Q409 financial results.

Live notes will begin today at 2pm PDT/5pm EDT in reverse-chronological order:

• Conference call ends.
• Apple again refuses to talk about the anticipated Q110 air freight cost increases in terms of specific products
• The State of Maine buy helped immensely
• Student Mac buys significantly helped Apple's online sales. Apple still worried about state education spending.
• iPhone sell-through up 38% YOY which is a significant multiple vs. the smartphone market growth overall
• Apple continues to be pleased with the number of government agencies and corporations that are deploying or evaluating iPhone for widespread deployment
• Over 350 higher ed institutions have approved iPhone for faculty and students
• Apple provides guidance based on GAAP and will continue to report both GAAP and non-GAAP results
• iPhone already ships in over 80 countries today; iPhone 3GS in 64 countries so far and to be in over 80 by end of calendar year
• Demand for the new MacBook Pros was very high during the quarter
• Snow Leopard also prompted greater Mac sales
• Apple Mac sales benefitted from 50,000 unit order (added to 20,000 in Q3) to state of Maine
• Apple spending capital on facilities, infrastructure, and manufacturing
• Macs in Spain was extremely strong (40%), germany 40%, France 39%, Switzerland and Italy in mid-30s percent increases.
• 13,000 Mac points of sale worldwide; Mac growing stronger outside U.S than inside (due to economic conditions).
• Air freight costs in Q110 are expected larger than normal; Cook will not mention product involved; airfreight will be "an abnormal sequential increase."
• Cook: iPhone 3GS demand outstripped supply for most of the quarter; created component shortages; Apple solved most of the supply/demand issue by early Oct. at latest
• Apple's new unibody MacBook Pros (introduced in June) had a very strong quarter
• Oppy: iPhone ASP in quarter just over $600 (high mix of 3GS and channel inventory rebalancing towards 3GS model from 3G)
• Cook: Apple investing confidently in their future: R&D, engineering, and marketing
• Oppy: Apple's international retail store revenue up over 20% for the quarter
• Oppy: Apple's remodeled stores showing strong results (72 stores remodeled so far this year)
• Apple will not forecast future quarters on quantitative basis, but "Apple plans to offer ever-increasing value to customers."
• Mac OS X Snow Leopard: More than double those of Leopard over first 5 weeks of sales
• Mac channel inventory started and ended quartet at 3-4 weeks (less than 15,00 units changed from start to finish of quarter)
• Tim Cook:  Apple Mac. Portable Macs up 35% YOY. Blowout quarter for MacBooks. helped by Back to School (strongest Apple's ever had)
• Tim Cook: People are still trying to catch up with the original iPhone and Apple has long since moved well beyond that device
• iPhone wannabes like Google Android-based devices? Apple now has over 21 million for fiscal year and significant momentum. 85,000 apps in App Store is a "country mile" ahead of anyone.
• Tax rate was 26% due to higher mix of non-U.S. earnings; Apple had expected about 30%
• Popularity of iPhone 3GS has been phenomenal and Apple was very surprised by the demand
• iPhone seasonality? Apple has very few Sep. - Dec. to look at thus far, so seasonality is difficult to forecast
• Generally speaking,in multiple carrier markets, Apple's wholesale price stays the same; the end user price is set by carriers themselves
• Apple very excited to begin selling iPhones in China
• Apple iPhone's China Unicom launch on October 30th at about 1,000 points of sale in China
• iPhone channel inventory: 2.1 million units in the channel; would like to have more; Supply constraints: improved in September. Supply and demand converged in Sept. or early Oct. Still short in some countries.
• Oppy: Gross margin to decline due to new products that Apple will deliver in the coming months, significantly more air freight, lower Snow Leopard box sales as launch recedes
• Apple is confident in their product pipeline and very enthusiastic in the year ahead
• In extraordinarily challenging economic times, Apple grew strongly
• Looking ahead to the first fiscal quarter of 2010, Apple expects "revenue in the range of about $11.3 billion to $11.6 billion and diluted earnings per share in the range of about $1.70 to $1.78."
• Guidance for next quarter is based on subscription (24-month) accounting rules
• Apple will adopt new accounting rules as soon as possible and are currently evaluating when to make the change
• Apple plans to open 4th Manhattan store and also first stores in France, including one at The Louvre
• Apple Retail Stores revenue $1.87B during quarter; about 50% of Macs sold were to those "new to Mac."
• iTunes App Store
• Apple looking forward to bringing iPhone to China later this month
• Apple sold 7.4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter.
• iPod continues to gain share in every country tracked
• Apple sold 10.2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter
• Apple began and ended quarter with 3-4 weeks of Mac channel inventory
• 12% YOY Macs sales to U.S. education institutions (thanks, Maine!)
• Apple posted revenue of $9.87 billion and a net quarterly profit of $1.67 billion, or $1.82 per diluted share vs. revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share, in the year-ago quarter
• Gross margin was 36.6 percent, up from 34.7 percent in the year-ago quarter
• International sales accounted for 46 percent of the quarter’s revenue.
• Oppy: Apple's most profitable quarter ever; with record Mac and iPhone sales
• Apple CFO Peter Oppenheimer, Apple COO Time Cook present for conference call
• Apple (AAPL) shares are currently up $14.82, to 7.88% to $202.87

[Swordmaker]

Reverse order report on Apple's 4th Quarter 2009 financials conference call PING!

Apple blows away estimates again Ping!

If you want on or off the Mac Ping List, Freepmail me.

[OCC]

iPhone needs to prove some security issues have been resolved before they are adopted by enterprise users.

http://www.wired.com/gadgetlab/2009/06/iphonesecurity/

[CheneyChick]

Nice after hours trading... 201.81

[Swordmaker]

Audio Recording in Quicktime format of Apple's 4th Quarter 2009 Conference Call.

[SunkenCiv]

Oh no, there’s nowhere to go but down!!! Apple’s doooooomed! ;’)

[Brugmansian]

As not many have replied to this thread, I thought I would hijack it if you don't mind....

I went from Windows to Mac in July (started on a Mac in 1998 and only switched in 2003 when I was given a Windows machine in payment for work).

Do a small town website. We're 100% local and all of those who contribute are conservatives. But they are 70 to 95 years old. They ALL use Windows. I keep getting Window's CD's from years ago that I can't open.

I see "Bean" can open this stuff. Or so it says. I don't need this stuff. I'm doing hours and hours trying to post work than should take minutes. What do I do?

Yeah...and I like Apple better. Cleaner format. Except when I have to deal with those who don't even know there are several OS's out there, who don't know there are alternatives to IE and who do not understand why I can't post exactly what they send on the internet. Which is 100% of those with whom I deal.

(I use Camino myself)