Notes of interest from Apple"s Q4 2011 conference call
Apple on Tuesday posted yet another record quarter to conclude its fiscal year 2011, led by continued growth of its iPad and Mac platforms. Following the news, executives from Apple participated in a conference call with analysts, and notes of interest follow.iPad sales during the September quarter were 11.12 million, an increase of 166 percent from the year-ago quarter. And Mac sales were the highest ever at 4.89 million for the three-month span.
Those, along with sales of 17.07 million iPhones, helped Apple earn quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 per diluted share. That"s the best September quarter in the company"s history.
Participating in Tuesday"s conference call were Apple Chief Executive Officer Tim Cook and Chief Financial Officer Peter Oppenheimer.
Steve Jobs
Cook started off the call by acknowledging Tuesday"s call is the first one held by Apple since company co-founder Steve Jobs died earlier this month.
"The world has lost a visionary, a creative genius, and an amazing human being... His spirit will forever be the foundation of Apple," Cook said.
The CEO said Apple remains dedicated to doing the work of Jobs. He thanked everyone for the many condolences that have been sent since he passed away.
Apple"s iPhone business
iPhone sales were up 21 percent year over year, a smaller than usual increase as in previous years the period came just after a new iPhone was launched. This year, Apple opted to wait until October to launch the iPhone 4S.
Oppenheimer said Apple was "pleased" with iPhone sales growth as the company transitioned to the iPhone 4S.
iPhone sales declined across the quarter, particularly in the second half as rumors of a new iPhone grew.
Deferred new carrier additions until after the September quarter to coincide with the iPhone 4S launch. Apple now has 130 carriers in 105 countries.
93 percent of Fortune 500 are deploying or testing the iPhone, up from 91 percent from last quarter.
Recent example of success: Lowes is rolling out 40,000 iPhones with custom applications allowing them to interact with customers with how-to videos.
Other companies: Loreal, Royal Bank of Scotland, S&P, Jaguar Landrover, CSX and many more.
"Working hard" to get iPhone 4S into customers" hands as quickly as possible. Will launch in 22 more countries by the end of this month.
Cook said he"s confident Apple will have a "large supply" of the iPhone 4S going into the holiday season.
"I"m confident that we will set an all-time record for iPhones this quarter," he said.
Executives knew there was "great anticipation" of a new iPhone in June or July. Sell-through decline occurred, but not to the extent that Apple anticipated, resulting in the company beating its guidance.
Sales took a hit later in the quarter as rumors of the iPhone 4S hit "extreme highs," Cook said.
"In our wildest dreams, we couldn"t have got off to a better start than we did with the iPhone 4S," he said.
Apple"s iPad business
The iPad continues to grow for Apple, reaching 11.2 million units sold in the company"s fourth quarter of fiscal 2011. Sales were up 166 percent year over year, representing the fastest growing category for Apple.
"The tablet market is a huge opportunity for Apple, and we"re very excited with our current performance and customer enthusiasm for iPad," Oppenheimer said.
Revenue from iPad and accessories was $6.9 billion, up 146 percent from 2010.
It"s been just 18 months since the iPad debuted. 90 percent of the Fortune 500 are deploying or testing the iPad.
Oppenheimer noted that many airline pilots are now using iPads in the cockpit. Technicians at Siemens energy use iPads when they do work at the top of their wind turbine.
Surpassed a quarter of a billion cumulative iOS sales this quarter.
App Store has 500,000 applications and more than 18 billion downloads. The App Store launched in more than 30 new countries during the September quarter.
Apple"s Mac business
It was a record-setting quarter for the Mac, reaching 4.85 million sales in the three-month period. That"s Apple"s best quarter ever for the Mac.
Previous record was set in the last September quarter, this exceeded it by more than 700,000.
Apple"s year over year growth was more than six times greater than the larger PC market, according to IDC.
Portables represented 74 percent of Mac sales, but Apple still saw record desktop Mac sales, particularly with the iMac.
More than 6 million downloads of Lion since it launched in July.
Apple"s iPod business
iPod sales were down even more than usual because the product lineup was not updated. 6.62 million iPods were sold during the quarter, a decrease of 27 percent.
Total iPod sales were ahead of Apple"s expectations. The iPod touch accounts for more than half of all iPods sold.
iPod share is still north of 70 percent, and the iPod is the top selling music player in most countries Apple tracks.
iTunes store earned $1.5 billion in revenue.
Oppenheimer said they are "very pleased" with the growth of the iBookstore, with more than 180 million books downloaded to date.
Apple"s regional business segments
Apple continues to see tremendous growth in the Asia Pacific region, where revenue grew by 139 percent year over year.
Revenue also grew 34 percent in the Americas and 36 percent in Europe from 2010.
Apple"s only losing region was Japan, where revenue fell by 21 percent year over year.
Cook on China: "The China progress has been amazing." He"s never seen a country with as many people rising into the middle class and aspiring to buy products Apple makes. "It"s an area of enormous opportunity."
It"s number two on Apple"s list of top revenue countries. Placing additional investment with more stores and other things. Now more than 7,000 points of sale for the iPhone.
Additional focus on other areas that have shown great promise, like Brazil, up 118 percent year over year. Went over the $900 million mark.
Russia is looking "more promising," Cook said. He also believes there are "significant opportunities" in the Middle East.
The iPhone has opened up Apple to a lot of new customers that didn"t look at the company before. He expects the iPad to do the same.
Apple"s retail business
Apple"s retail business grew by 1 percent year over year in the September quarter.
Mac and iPad sales were strong, but largely offset by iPhone sales, which had a tough comparison in 2010.
About half of Macs sold in stores in the September quarter were to customers who have never owned a Mac before.
Opened seven stores in six countries in the last week of the quarter.
Ended quarter of total 357 stores. Average revenue per store was $10.7 million.
Store traffic "strong," with a record 77.5 million visitors in the September quarter.
Expect to open 40 stores next quarter, with about 3/4 of them outside in the U.S.
Apple will also expand many stores in the U.S., which it feels are now "too constrained" to properly serve customers.
Apple"s next (Q1 2012) fiscal quarter
Oppenheimer has said Apple expects to earn revenue of about $37 billion in the current holiday quarter, with diluted earnings per share of about $9.30.
The coming quarter, the first of fiscal 2012, will span 14 weeks rather than 13. This is done once every six years to align the fiscal periods with the December calendar.
Ended the quarter with 81.6 billion in cash plus short term and long term investments, an increase of $5.4 billion from the June quarter.
Total revenue in fiscal 2011 was more than $108 billion.