Today, TUAW liveblogs Apple's first quarter conference call. If you'd like to listen live, point your browser to Apple's dedicated page. I'll be doing live updates as they're discussed, including coverage of the Q&A followup.
The liveblog appears in reverse chronological order, with newer updates higher on the page. This post will not auto-update, so keep refreshing your browser.
Also note that I do not usually cover the Financials. Our usual suspects are all on planes on their way out to Macworld/iWorld today. So please bear with me, as Apple spokespersons have a tendency to talk very, very fast on these calls.
4:02PM There are many blogs you could be visiting today. Thank you for picking ours.
4:02PM As always, if you enjoyed this liveblog, or if you want to offer constructive criticism, please drop us a note on our contact form http://www.tuaw.com/contact/feedback
4:01PM Thank you stopping by TUAW for this event
4:00PM My fingers are about to fall off.
4:00PM And we're done
3:59PM I think there's an incredible number of people -- and we could sell more if we had more supply -- people out there who really love what we're doing
3:59PM I'm sure that's a shock to you
3:59PM Won't comment on future roadmap
3:59PM Popularity of larger screens on Android changed or impacted your view?
3:59PM 4G and larger screens?
3:58PM It's not exactly a 2-horse race. There are horses that will always keep running, and players you can never shut out. We're focusing on innovating and creating the world's best products. We'll ignore how many horses there are. We'll just focus on being the leader.
3:58PM iOS is doing extremely well
3:58PM We inherently believe that iPad is way ahead
3:57PM All the data that I've seen, would say it's a close rate
3:57PM And 42/41 on another
3:57PM Nielsen has it at 45/47
3:57PM Just iPhone, is 43% and Android is 47%
3:57PM You can see from momentum point of view, in US, just looking Oct-Nov
3:56PM I don't have comfortable numbers on Android
3:56PM 62 million in last quarter alone
3:56PM We've sold over 300million iOS devices
3:56PM I wouldn't classify it like mac/win. Mac has outgrown market 20 quarters.
3:56PM How do you see sustainability of your integrated model?
3:55PM 2 horse race? Like Mac vs Windows?
3:55PM Android vs iPhone?
3:55PM Not a new phenomenon
3:55PM We've see that before with the iPod halo for the Mac back in the early 2002-2004 range
3:55PM Macro level: hard to determine exactly
3:54PM One product has pulled in others
3:54PM With iPad and Mac following
3:54PM In Enterprise, iPhone has been catalyst
3:54PM Or a Halo effect?
3:54PM Are you seeing accelerate refresh rates?
3:54PM April 2010
3:54PM We're winning a fair number -- and you can see that in our results. 55 million sold, and we've only been in the business since...
3:53PM We're winning market by market by market
3:53PM Consumers have moved in a huge way to iPad
3:53PM Education adopts new tech fairly slowly
3:53PM You can see it appear virtually everywhere, enterprise, large % of Fortune 500, etc. education, k12
3:52PM We continue to believe there's much more cannibalization of PCs by the iPad
3:52PM Looking at our data, there was no obvious change int he data
3:52PM Some customers looked at it, decided to buy an iPad. Happening on a larger basis? I do not know.
3:51PM I look at US data on a weekly basis. After the Amazon Fire, there wasn't an obvious effect
3:51PM Do people trade up to iPad?
3:51PM Coming back to tablet market, iPad growth outpaced expections. Do you think Apple benefited from lower-cost tablets coming into market?
3:50PM In terms of major carriers, numbers are much smaller -- there are many smaller carriers. Same thing with small countries. We'd like to get into all of them over time.
3:50PM Nothing specific to announce
3:50PM In terms of carriers, we're continuing to add
3:49PM We're beginning to see traction elsewhere
3:49PM India, where it is small, revenue went up over 3x last quarter
3:49PM Brazil will be a huge opportunity
3:49PM Not due to a lack of effort or focus
3:48PM We're in those countries today, but have a ton more energy in the China market today
3:48PM We are today selling in key carrier and resellers partners, in Russia and India
3:47PM What are your carrier ambitions?
3:47PM Geographic expansion q's
3:47PM They're integrated into teams, with fantastic technical talent. We're pleased they could join us
3:46PM Shannon, we don't believe in divisions like many companies
3:46PM How are they integrated in?
3:46PM We tend to do several a year. We're very disciplined about acquisitions with a strong track record.
3:46PM That we'd like to bring into apple
3:46PM We've done acq's of smaller/medium companies with great engineering and talent
3:45PM Talk about acquisitions? Like anabit?
3:45PM Chris: Tim is dancing around it, but a China Telecom launch is clearly imminent.
3:45PM All that, we're proud of this quarter, and pleased with momentum
3:45PM US Dollar has strengthened against Euro, will impact sequential compare
3:45PM And so was inflated, compared to previous year
3:44PM Dec quarter results reflected pent up demand
3:44PM iPhone channel last year increased, not this year
3:44PM That week being excluded from quarter affects numbers
3:44PM Was included last year but not this year
3:44PM xmas-new years week 1/14th of Dec quarter's revenue
3:43PM 5 reasons why this year down a greater sequential dip
3:43PM There is an explanation, and again I apologize, but...um... something about sequential seasonality. Sorry.
3:42PM Again a q of why do they think there's goign to be a dip with March quarter
3:42PM China is an extremely important market and we continue to look at how to explore it further
3:41PM Both in Japan and US
3:41PM Added carriers
3:41PM Added key retailers, esp important in some markets
3:41PM Consistently added distribution
3:41PM up 35% yoy
3:41PM We are now 130k points of sales throughout world
3:40PM For iPhone, esp in China
3:40PM Outlook for next quarter?
3:40PM iCloud is more than a product, it's a strategy for the next decade.
3:40PM Fundamental shift to recognizing people have numerous devices, and want the bulk of their content in the cloud, access from all devices
3:39PM Solved a lot of customer problems, making their lives easier
3:39PM Customer response "incredible".
3:39PM We shared iCloud stats earlier. Over 80million customers. In just a few months
3:39PM How is it adding value to Apple's products and what metrics are you using to determine if it's driving success
3:38PM What about iCloud?
3:38PM Don't have any perspective to share today
3:38PM We're examining *all* possibilities of using cash
3:38PM When you talked about cash balances, you said you'll announce it when you announce it. How are you framing things like buy backs?
3:37PM He is *not* going to give an answer on any Apple TV
3:37PM We love Apple and it's a privilege to work with the incredible people
3:37PM Apple TV 2 is a fantastic product and we're continuing to see where it takes us. No comment on anything else.
3:36PM Chris: "Only" 32.5 billion in revenue predicted for next quarter. So it'll just be their #2 quarter of all time. Apple is clearly doomed.
3:36PM Dec quarter, > 1.4 million alone, exceeded quarterly record
3:36PM Apple TV is doing very well. Last Fiscal year, sold 2.8Million
3:36PM Congratulations. Everyone has connected TV at CES. So, high level, what's your strategy in the living room?
3:35PM Last year, sequential increase with iphones was a big contributor. We don't see that happening again this year.
3:35PM Different currency levels, different place wrt products
3:35PM Hard to compare this year vs last.
3:35PM KellyH: Maybe they will buy TUAW and we will become TOAW.
3:35PM Factors affecting this include loss of leverage from revenue, dollar is much stronger, and demand will not reoccur from last quarter
3:34PM Q2 less than Q1? Sounds like you're bucking tradition, normally Q2 is more than Q1?
3:33PM Chris: Average of $1269 in revenue per Mac sold.
3:33PM When we have something to announce, we will discuss it
3:33PM Time frame? Announcement? Will there be an ending to this process?
3:33PM We're looking at what makes the most sense to use with cash. We have nothing to discuss today?
3:33PM We recognize that cash is growing for all the right reasons
3:33PM We have always consulted with team and board
3:32PM Actively discussing uses of cash: historically? Or thinking more constructively than historically?
3:32PM KellyH: Took the time to optimize for the iPad canvas. 170,000 apps for the iPad versus hundreds for the competition. eReader and other tablets are not in the same category. People won't settle for a limited function device. It's the Year of the iPad for a second year in a row.
3:32PM Chris: Apple earns an average of $659 for each iPhone sold.
3:32PM Too early to tell, just started in October, how this will play out over time.
3:31PM We're glad to cover the range of products. iPhone 4S clearly most popular.
3:31PM Each model important in achieving the total iPhone units.
3:31PM iPhone in prepaid market, evolving strategy?
3:30PM Chris: Apple earns an average $593 in revenue per iPad sold.
3:30PM We will compete with anyone currently shipping tablets.
3:30PM We're just going to continue to innovate like crazy in this area.
3:30PM People really want to do multiple things with their tablets. We don't see limited function tablets and ereaders being in the same category. Some customers will buy them. People who want iPad will not settle
3:29PM Ecosystem is in a class by itself
3:29PM Significant momentum in space.
3:28PM We believe tablet market will exceed pc market
3:28PM caolo_MPB: "We could not be happier" says the CEO of a $100B company
Chris: Apple's profits exceeded Google's entire revenue.
3:28PM We're really happy with our iPad sales.
3:28PM e.g. Amazon's models?
3:28PM Any impact from lower-priced tablets? What about competition?
3:27PM Goldman Sachs: Q on iPad.
3:27PM Product costs and a better mix of iPhone sales were benefits to quarter
3:27PM Gross margin expected to be down, due to loss of leverage, stronger US dollar, etc.
3:26PM Back to Apple: Key commodities unaffected, but hard drives will be affected
3:26PM Sounds to me as if they're expecting those price changes
3:25PM KellyH: Apple can pay it, wonder if Mac prices will go up or if it will switch to SSD
3:25PM NAND down 10%, DRAM down 40% In that context, how favorable for key commodities?
3:25PM For dec quarter, was not a material supply impact to any of our product line. For March, we're not expecting a supply impact, but a cost increase -- included in guidance
3:24PM Meaningful impact on Mac sales during dec quarter?
3:24PM Gartner? "Was going to ask about the hard drive situation"
3:24PM We will pay more for drives during the quarter
3:23PM Exception is hard drives due to tragic situations in Thailand
3:23PM We predict that it stays favorable.
3:23PM Component environment is favorable.
3:23PM We did make progress from the end of the quarter, but there are some countries where we are not
3:23PM Other countries were smaller, in a demand sense. We'll see how the quarter goes
3:23PM Very happy with demand response there
3:22PM It's off the charts
3:22PM We are selling through retailer stores and online
3:22PM Demand in China has been staggering
3:22PM Morgan Stanley: "Talk about pent up demand?" Just US/Japan? Or other countries as well? Component environment and production?
3:21PM 4S most popular model
3:21PM "What about 4S vs higher capacity 4S"?
3:20PM Mainland China played a role too
3:20PM Key regions include US & Japan
3:19PM "We made a correct decision with a broad range of iPhones"
3:19PM Delayed purchases played a role too
3:19PM Still short in key geographies
3:19PM Situation has improved "some"
3:19PM They were short of supply throughout quarter
3:18PM Substantially above 20Mil previous record. Attribute to customer reception. Key features camera and Siri
3:18PM "Thrilled with the billions sold"
3:18PM He's asking for details and metrics
3:17PM "Can you describe the iPhone momentum at the end of the quarter?"
3:17PM Oppenheimer is done. Opening to Q&A
3:17PM Pleased with pipeline
3:17PM Strongest product lineup in Apple history
3:17PM Surpassed all previous records for iPhone, iPad, and Mac sales
3:17PM In closing, we're extremely pleased with customer response. We launched iPhone 4S to rave reviews
3:16PM He just rattled off a *lot* of numbers. Sorry.
3:16PM Expect 32.5 billion for mar quarter, 42% margin
3:16PM Now, forward looking
3:16PM Actively discussing uses of our cash balance -- nothing specific to announce today. Continuing to be very disciplined with the cash
3:15PM 64 billion of cash is offshore
3:15PM 110M store visitors means that the equivalent of 1 out of every 3 store visitors bought an iphone
3:15PM MikeTRose: growing the platform at the expense of Windows
3:15PM MikeTRose: Important point: the 50% number of "new to Mac" buyers at retail has been the same for >12 quarters now
3:15PM Better than expected largely due to strong iPhone sales
3:14PM 44.7% gross business margin, higher than guidance
3:14PM Most customers can buy online and pick up in-store
3:14PM "Incredible interest in our stores and products" "EZ Pay has enhanced this"
3:13PM "Spectacular new Grand Central Store"
3:13PM Half macs sold are to customers new to mac
3:13PM Stores sold > 1.1 million macs
3:12PM Store experienced record-setting yoy sales
3:12PM Devs earned over $4Bil, $700M Dec quarter alone
3:12PM Mike Rose: "600K iBooks author copies"
3:12PM iCloud > 85Mil customers
3:11PM Launched iCloud & iOS 5 in the quarter
3:11PM > 315million iOS device sales.
3:11PM 1.5 Mil ipads in use in educational institutions
3Mil iTunes U downloaded
3:11PM iTunes U app as well
3:10PM iBooks Author: anyone with a mac can create and publish
3:10PM Interactive, current content
3:10PM Announced iBooks 2 last week.
3:10PM He's summarizing iPad in education now.
3:10PM Dave Caolo: "That's a good problem to have"
3:10PM Mike Rose: "They sold more iPads than they made"
3:09PM Summary of current discussion: Business would marry the iPad if it were legal in Utah.
3:09PM "iPad continues unprecedented adoption in business"
3:09PM Sell through exceeded ?sell end?
3:08PM 99% yoy including accessories
3:08PM Extremely popular as gifts this holiday season
3:08PM 111% growth yoy
3:08PM 4S now avail in over 90 countries. Fastest iPhone rollout ever.
3:08PM Facebook, Kimberly Clarke, etc.
3:08PM He's listing new major adoptees -- big names
3:07PM iPhone is changing how companies use mobile mission-critical apps
3:07PM Most Fortune 500 now support iPhone
3:07PM And channel inventory increased, with 6million in channel
3:06PM (We love Siri too)
3:06PM "Customers captivated by Siri"
3:06PM Strong iPhone sales growth: popularity of 4S fueled
3:06PM 37 million iPhones vs 16 previous quarter.
3:05PM 140 Million apps downloaded on Christmas
3:05PM Major labels + indies
3:05PM Catalog of 20Million songs
3:05PM Launched in 27 countries
3:05PM iTunes Store record results, 1.7 billion
3:05PM Top MP3 player
3:05PM (Apple's expectations)
3:05PM Music products: iPod sales ahead of expectations, with touch over 50% of those sold
3:04PM "Become favorite shopping destination"
3:04PM 100 Million apps Mac App Store in a year
3:04PM He's talking about channel inventory
3:04PM MacBook Pro and MacBook Air led, followed by iMac
3:04PM Asia-Pacific sales were up 58% yoy
3:03PM Mac sales grew 26% y-o-y vs 0% for across market
3:03PM Starting with Mac products & services
3:03PM $13.87 earnings per share
3:03PM Sorry, net income
3:03PM 13.1 billion net increase
3:03PM 17.3 billion operating margin
3:02PM Fueled by iPhone, iPad, Mac
3:02PM 73% year over year growth
3:02PM Proud of results, pleased with momentum of business
3:02PM Established numerous records
3:02PM Thrilled to report, a tremendous quarter
3:02PM Introducing Peter.
3:01PM Actual results and trends may differ materially.
3:01PM Warning about forward looking information
3:01PM Upcoming: Peter Oppenheimer and Tim Cook and treasurer.
3:01PM We're being welcomed now.
3:00PM I want to know if the non-refreshed iPod line is a technology on the way out (cite the iPhone surge) or is going to be redefined into the iPad line.
2:59PM We're guessing that MobileMe wasn't a big earner
2:59PM Chris: Software/Service/Other Sales is up 7% year/year in spite of losing half a year of revenue from MobileMe once iCloud went free.
2:58PM Chris: Their hold music always reminds me of playing Civilization IV.
2:58PM The music is classical and pleasant.
2:58PM Chris: Apple's previous record for revenue was $28 billion. They bested that by 165%.
2:57PM They are welcoming us, telling us to wait for additional participants, and that they appreciate our patience
2:55PM AAPL at $454 after-hours.
2:54PM CUPERTINO, California—January 24, 2012—Apple® today announced financial results for its fiscal 2012 first quarter which spanned 14 weeks and ended December 31, 2011. The Company posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share. These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.
The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter. The Company sold 5.2 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.
“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”
“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”