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Apple Conference Call Ping!
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Posted on 10/18/2010 6:29:23 PM PDT by Swordmaker
Live notes from Apple Inc.'s Fiscal Fourth Quarter Conference Call appear in chronological order:
• Gross margin was 36.9 percent compared to 41.8 percent in the year-ago quarter. • International sales accounted for 57 percent of the quarter’s revenue.
• $4.64 per diluted share (vs. $2.77)
• Net quarterly profit of $4.31 billion (vs. $2.53 billion)
• Revenue of $20.34 billion (vs. $12.21 billion)
• 4.19 million iPads.
• Latest NPD monthly data: iPod remains market share leader with over 70% of market.
• Apple sold 9.05 million iPods during the quarter, representing an 11 percent unit decline from the year-ago quarter.
• 14.1 million iPhones in the quarter, representing 91 percent unit growth over the year-ago quarter.
• 14.1 million iPhones in the quarter, representing 91 percent unit growth over the year-ago quarter.
• Record 3.89 million Macs during the quarter, a 27 percent unit increase over the year-ago quarter.
• iPhone demand is strong. Apple believes they could have sold even more iPhones if they could have made them
• iPad ASP about $645. 304 weeks of channel inventory, below target of 4-6 weeks.
• iOS device sales of over 25 million during the quarter.
• Over 200,000 registered iOS developers.
• iAd: Apple very happy with results so far.
• Apple Retail: 3.57 billion vs. 2.04b, 874,000 Macs sold a record (+30%)
• 24 retail stores opened during quarter
• Apple now has 317 stores worldwide, 84 outside U.S.A.
• 74.5 million visitors during quarter and increase of 62% YOY.
• Apple to open 40-50 stores in fiscal 2011 with roughly half being outside U.S.
• 13.6 million Macs sold in fiscal 2010
• 40 million iPhones sold
• 7.5 million iPads sold so far
• In fiscal 2010, Apple generated 5 times the revenue and 10 times the earnings vs. 2005
• In fiscal 2010, Apple generated 5 times the revenue and 10 times the earnings vs. 2005
• Apple expects 25.5% tax rate for 2011.
• Apple CEO Steve Jobs attends earnings call to mark Apple's first $20 billion quarter
• Jobs: 91% YOY unit growth in iPhone sales
• Jobs: We have now passed RIM and I do not see them catching us anytime soon
• Jobs: With 300,000 apps now in App Store, RIM has a high mountain to climb
• Jobs: 275,000 iOS devices activated per day on average
• Jobs: Google characterization of Android as "open" is disingenuous.
• Jobs: Android is very fragmented; proprietary UIs, etc. User is left to figure it all out.
• Jobs: Open systems do not always win: Take Microsoft's "PlaysForSure." It failed.
• Jobs: We think integrated (not matter how many times Google mischaracterizes it as "closed" will triumph over fragmented (which Google touts as "open.")
• Jobs: 7-inch tablets are only 45% as large as iPad's screen (screens are measured diagonally) This size isn't sufficient to make quality tablet apps.
• Jobs: 7-inch tablets are only 45% as large as iPad's screen (screens are measured diagonally) This size isn't sufficient to make quality tablet apps.
• Jobs: We have done the testing. That is why the 10-inch screen size is the MINiMUM size for a good tablet experience
• Jobs: The 7-inch tablet is too big to compete with an iPhone and too small to compete with an iPad.
• Jobs: Even Google says not to use the Android Froyo in tablets, yet some 7-inch tablet makers are in it anyway. And they will have virtually no apps.
• Jobs: The current crop of 7-inch tablets are DOA.
• Jobs: 7-inch tablet makers will learn a tough lesson and try to make 10-inch tablets next year, abandoning users and developers in the process.
• Wow! We'll clean up Jobs' paraphrasing with actual quotes later.
• Jobs: iPad is clearly going to affect notebook computers. Not a question of if, but of when. Appel is already seeing tremendous interest fro eductaion and, much to my surprise, in business. iPad is being grabbed out of our hands by businesspeople.
• Jobs: I see iPad as a general purpose device and I see it as really big
• Jobs: The more time that passes, the more I'm convinced that with iPad, we've got a tiger by the tail here.
• Jobs: I see iPad as a general purpose device and I see it as really big
• Jobs: We're already shipping more iPads than Macs
• Jobs questioned on Flash: "Flash memory? We love flash memory." (laughter)
• Cook: iPhone demand went to an entirely different level, beyond what Apple anticipated.
• Will Apple be able to maintain market share in tablets? Jobs: I have a hard time envisioning what the competitors can do. They are having a hard time with pricing, even with too small screens and they do not have over 35,000 iPad apps like we have in App Store. "We're out to win this one."
• Jobs: I think right now, iPhone and Android are winning the battle for smartphone developers and users.
• Jobs: I think right now, iPhone and Android are winning the battle for smartphone developers and users.
• CFO Oppenheimer: Margin decline due to higher mix of iPad and new iPod sales.
• Jobs on Apple TV: We have gone to a complete streaming model on Apple TV. All of the content is rented or streamed from your computer and soon to be streamed from iOS devices.
• Jobs: We have already sold over 250,000 Apple TV units. We are thrilled with that. We think the $99 price is enticing and when AirPlay is ready, it will be another grate driver of sales.
• What drove the sequential downtick in margins: Apple expected a higher mix of iPhone 4 (lower gross margin that previous iPhone model), free bumper program, iPads, and new iPods with outstanding features.
• Jobs: Our goal is to make the best devices in the world, not to be the biggest. As you know, Nokia is the biggest and we admire then for what they do, but we don't want to be like them.
• Jobs: I imagine well be competing with Android for quite some time. We provide users with products that just work. Android is already quite fragmented for both users and developers.
• Jobs: Our goal is to make really breakthrough products in every market where we compete and to drive the cost down while offering better functionality. Relentless improvement at the same or better prices.
• The reason we don't make a 7-inch iPad is because we do not believe that you can make a great experience with that size screen. When we make decisions, it's not about cost, it's about the value of the product when you factor in the software.
• Jobs: Hardware makers think the software will take care of itself, but it won't. They fail to think in an integrated manner. Apple thinks about everything, the hardware, the software, everything.
• Jobs: Our $50+ billion cash. We believe that one or more strategic opportunities may come along. We'd like to keep our ability to move if opportunities present themselves.
• Cook: About 2/3rds of Fortune 500 are deploying or trailing iPad. K-12 ed is also picking up interest on iPad. Early data potions look great. We are adding sales people to call on education specifically for iPad.
• Cook: We maintain our focus on the consumer, but its the consumers in the enterprise that are pulling our products into business. We think this will continue to pay great dividends for Apple.
• Oppy: We are always working aggressively to lower our costs. We are happy with our gross margins, better than we expected.
• Cook: Virtually every carrier is pressuring us for supply. They want more supply and we are working to meet it.
• Jobs: We have an advantage on iPad price because we make the A4 processor, we make the battery chemistry, we make a lot and we've learned something. We've eliminated the middle man in many cases. iPad is a product we've been training for for the last decade.
• End of conference call.
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One of Jobs’ statements really rung true for me, ie, “Hardware makers think that software will take care of itself.... it won’t.”
Man, is that ever true.
One of Apple’s strengths by developing their own hardware and software under the same roof is that the product team can’t play “let’s point the finger” game. I cannot enumerate the times we had to code around some big of outlandish stupidity on the part of some interface chip maker because they knew nothing about writing drivers or other s/w to actually USE their chip.
I could draw a parallel to DEC in the 80’s. VMS on the VAX was the best super-mini out there, because the hardware and software guys talked to each other and resolved issues before they became customers’ issues.
They were a PITA in the earliest Netbooks, too.
Was Jobs health brought up?
Nope, Steve's healthy again... fully recovered from his transplant.
This is a very humorous article. This fellow is desperate to find bad news.
I am laughing all the way to the bank... HE HE HE HE HE......
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