Apple has just announced their Q3 2011 results and the iOS platform continues to impress with 20.34 million iPhones sold (up 142% from last year), 9.25 million iPads (up 183%), 3.95 million Macs (up 14%) and 7.54 million iPods (down 20%). All that added up to $28.57 billion in revenue and record quarterly net profit of $7.31 billion.

“We’re thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent,” said Steve Jobs, Apple’s CEO. “Right now, we’re very focused and excited about bringing iOS 5 and iCloud to our users this fall.”

“We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50.”

Their quarterly conference call is coming up soon and we’ll add highlights as we hear them, after the break.

• Starting off with Macs. Up 14%. 4x IDC forecast for PC industry… but nothing compared to iOS. Particularly strong in AsiaPac.
• New iMacs with Thunderbolt, FaceTime HD cameras
• iPod touch is half of iPods sold.
• iTunes $1.4 billion, music, video, apps strong. 225 million accounts. 15 billion songs.
• 20.3 million iPhones. 142% growth, double IDC estimates for global market.
• iPhone revenue $13.3 billion, increase of 150%
• Very strong growth, all segments. AsiaPac robust, 400% up.
• Increasing iPhone manufacturing capacity. 228 carriers in 105 carriers.
• 5.9 million iPhones in channel. Support strong demand, carrier additions, distribution.
• 91% of fortune 500 testing or deploying iPhone, 57% of global 500 companies testing or deploying iPhone. Acta, Netsle, Dow, SuperValue, Comcast.
• 9.2 million iPads. 183% increase. Increased production by over 4.5 million. Sold every one they could make.
• 64 countries for iPad, iPad 2.
• $6 billion in revenue from iPad.
• 1.05 million iPads in inventory.
• 86% of fortune 500 are testing or deploying. 47% of global 500 companies.
• Boston Scientific, Xeorox, Salesforce deploying iPad. Top hospitals, retail. General Electric, SAP internal apps. Airlines using in cockpit.
• iPhone, iPad, iPod touch, 222 million cumulative device sales.
• iOS 5 includes 200 new features, notification center, iMessage, Newstand. PC-free, activate and set up out of the box. Launching this fall.
• June provided preview for iCloud. Free new services. Work seamlessly. Store content on cloud, push to devices. Release in fall.
• App Store 425,000 apps, 15 billion downloads. $2.5 in cumulative payments to devs. Far ahead of competitors.
• Apple Stores now. (They’re doing just fine thanks.)
• Cash is at 76.2 billion in the bank. Wow.
• Will continue to charge for OS upgrades like Lion and iWork.
• (Call keeps cutting ou for me, sorry if I miss stuff)
• Deferring revenue, recognizing over 2 years to account for upgrades.
• Now giving out typically conservative guidance for next quarter.
• Q&A time.
• 12% revenue downtick is more conservative than normal, why? PO: September more weighted to higher education. Best Macs ever. Expect increase. Expects iPhone increase as well, expanding iPad, expecting as well. iPod decline. A lot going on with iCloud, iOS 5. Product transition they won’t talk about will effect quarter.
• How do you approach working transitions into guidance. OP: Not talking about it. Factored it in. Incredibly confident about pipeline.
• iPad 2 sales, trends? Tim Cook: Do believe some customers chose iPad over Mac. Believe even more chose to purchase iPad over Windows. Lots more Windows to cannibalize over Mac. Mac has attributes that will continue to do well in the market. Grew 5x market. iPad 2 has been a frenzy. Feel good about progress, reception.
• China, growth in AsiaPac? TC: China was key for results. Greater China up 6x. $3.8 billion is quarter, $8.8 billion year to date. Substantial opportunity for Apple. Just scratching surface.
• Outlook for gross margin? PO: 38%, down 370 basis points. 2/3 decline driven by different product mix. Loss of leverage on lower revenue. Full quarter of back to school. Future product transition. TC: NAND and DRAM, LCD, batteries, optical, in positive supply situation. Pricing to fall at or above historical trend. HD supply constrained, less than trend. Components favorable on sequential comparison. Offset by 1 time benefits discussed for June quarter.
• 1 time benefit on gross margins. PO: Saw benefit on warranty on phone support, benefits.
• Patents? IP strategy? TC: Simple view, we love competition, great for Apple, everyone. Want people to invent their own stuff. Going to defend portfolio.
• What drove iPhone strength? TC: Added 42 new carriers, 15 new countries. Throughout quarter. Real sequential improvement due to emerging and developed markets. China, Latin America – Brazil, Mexico, Middle East. Great for Apple. Not historically as strong in. Beginning to see fruits of their labor.
• Milestones for next quarter? TC: No, but can see it’s something of great focus. Want to do business with great partners. Still out there. Working new relationships.
• Android activations higher than iPhone, China is on fire, what about Google numbers? TC: Android activation number is difficult to get hands around. Apple numbers from data sheet, add iPhone, iPad, approximate 50% iPods is iPod touch. Sold over 33 million iOS devices. Now over 222 million cumulative devices. Numbers very straight forward, transparent, quarterly. iPhone is up 142%, more than 2x rate of market growth. Incredible. Sold every iPad 2 they could make. Also gaining traction in enterprise. Converting to penetration focus. App Store largest by far, iPad specific over 100,000. Be hard pressed to find more than a few hundred on other platforms. Other tablets not getting any traction to speak of. $2.5 billion to developers, great model. Customers love it. Confident with model, app store. Ranked iPhone #1 in customer surveys. Confident in road map. Feel very good. Changewave data reaffirmed iPhone is clear leader in satisfaction, number one preference for new smartphone buyers.
• Apple TV? Not a leg of the stool yet. Not in size market iPhone, Mac, etc. Love the product, customers love it. Got it right with new model. Still a hobby.
• Non-Apple retail channel? TC: About 115,000 points of sale. Diversified. Part of the magic. Prefer not to share it. Make right decisions for Apple.
• iPhone, iPad manufacturing yield? TC: No specific numbers, supply of iPad improved dramatically in the quarter. Further improved in July. In balance in some SKUs in some countries. Feels good about progress.
• How to sustain growth? TC: On tariff side, carrier sets that. Better question for them. At very macro level, virtually every carrier is desirous of more customers having smartphones, using data, expanding ARPU. No better device to move to from any phone up to smartphone than iPhone. Ease of use, ecosystem. Good alignment. Key driver emerging and developing markets. Putting more and more energy in these markets. Bit more difficult to do well in.
• How to address markets? TC: Some percentage of post-paid but looked in aggregate, predominantly pre-paid. Convinced in some cases to start pre-paid, better for customer, carrier, Apple. Obviously developing and expanding channels on list. 115,000 down, some experience to play with.
• What lack of Mac growth was cannibalization, what was hold off for Lion? TC: Look more year-over-year on Mac than sequential. Proud of numbers. Doing 5x rate of growth is something to be proud of. Why isn’t it higher? Some cannibalization by iPad. 2x iPad shipped over Mac. But more customers chose to buy iPad over Windows PC. Some customers have delayed purchase for Lion. Launching tomorrow. Fantastic product. Worked really hard on it. Revolutionary. 3rd thing, year ago quarter launched new MacBook Pros. This time launched new iMac. Both well received but MBP makes up majority so makes more difficult comparison.
• Growth trajectory for iPad? TC: Don’t predict units. Don’t want to make a comment. Think iPad will grow significantly year over year.
• Why does iPad have supply problems? TC: (Repeats previous statements).
• Any differences in enterprise strategy? TC: Dual prong on both iPad and iPhone. Work with carriers who have sales forces. Train and provide help with carriers. Do some direct sales or act as overlay to channel. Very happy with numbers, interest, pilot, deployment. Now moving to penetration. To be this far into Enterprise for a product only shipping 15 months is incredible. Enterprise typically much more conservative, takes more time to evaluate. Moving at speed he’s never seen. K12 takes very long time as well but last quarter sold more iPads than Macs. Would never have predicted this. Clear it has universal appeal from consumer to business to government and on and on.
• Expectations for iCloud? PO: Cannot wait to get iCloud and iOS 5 into hands of customers. Have done it right. Seamless, integrated experience they’re going to love. Didn’t go unnoticed in Changewave results that iOS devices are #1 in intent to buy.
• Lead over competitors in ability to mirror content? PO: Good with internet, delivering content. Proved with iTunes, App Store. Have some things to learn but have a lot of skills. Excited.
• China Mobile? Pre-paid? TC: Pre-paid or unlocked phones (off contract) are key in China and a number of emerging market where credit systems are not as well established as US, Japan, Western Europe, Australia, etc. iPhone volume for 1st 3 quarters was up 5x year over year. iPhone is key contributor to greater China revenue. Not saying figured out precisely how to play perfectly in environment. Have more to do, more to learn. Feel good about progress. If told a year ago would do $3.8 billion, very many in Apple wouldn’t have believed it. Feel very, very good. Applying those learnings to other markets.
• Recent market data in some countries shows lost share? Is iPhone share strategically important to Apple? TC: Share gain is important. Do offer 3GS as example in lower price point. US is $49 with contract. Varies off-contract. Clearly in distinctly different price than iPhone 4. Philosophy same as always. Will only make products Apple is proud of, best in the world. iPod shuffle was created, now $49. Lot of people love it. Always question, litmus test. Up to Apple to convince Apple to spend more for a material better experience and product. Seen people will do that if product is great, message is appropriate. A lot of experience in both those areas.
• iPad media consumption? TC: Talk to 10 people, 10 different reasons they love it. Reason it’s doing so well across demos, geographies.
• Why not more movie titles? PO: Have a very broad library, particularly in US. Adding more internationally each quarter. Look for more later this quarter across the various stores. Have neat stuff coming.
• That’s all!

In addition to the 3.2 million iPhones AT&T activated on their network last quarter they also switched on 400-500K iPad 3G. What’s more:

It’s “surprising” how many business customers are approaching AT&T about the iPad.

Business Insider quips that Microsoft should look out, but given the profit share Apple has taken on iPhone and the low margins of typical PC hardware, what damage they may not do to unit sales they may well do to revenue.

What’s also interesting is that iPad users are consuming more data than iPhone users though less than 3G laptop users and 75-80% are on the unlimited 2GB plan.

[Business Insider]

Hot on the heels of Apple’s 8.4 million iPhones sold in Q3, AT&T announces a record-breaking 3.2 million of those were activated on their network. Their churn levels were lower than ever as well, 1.01 percent postpaid churn and 1.29 percent total churn, and the all-important ARPU (average monthly revenues per subscriber) up 3.4 percent.

On June 24, AT&T began offering iPhone 4, the most powerful iPhone yet. Preorder sales of iPhone 4 were 10 times higher than the first day of preordering for iPhone 3GS a year earlier. For the full second quarter, AT&T iPhone activations totaled 3.2 million, the most quarterly iPhone activations ever. Approximately 27 percent of those activations were for customers who were new to AT&T.

27 percent new to AT&T, going into the 4th year of exclusivity? Yeah, that’s probably why they stick with that “I hate you, don’t leave me” borderline relationship with Apple.

And all this with iPhone 4 demand still exceeding Apple’s supply, and the white iPhone 4 still waiting on a limited, late July launch.

[Business Wire via TechCrunch]

Follow along with TiPb as we listen to and comment on Apple’s Q3 2010 financial results conference call. We’re not live-blogging this, just posting highlights so you’ll need to refresh from time to time to see new notes.

If you want to listen while you read, head on over to Apple.com for the audio stream.

Now on with the highlights:

• Waiting on additional participants to show up
• Starting now, IR person reading safe harbor provision
• Tim Cook (henceforth TC), Peter Oppenheimer (OP) on tap, no Steve Jobs announced
• OP: introducing results, began shipping iPad in 10 countries, launched iPhone 4, shipped iOS 4, new record for Mac sales
• OP: Highest revenue ever 15.7 million, 4.23 margin, 3.25 net income, EPS 3.51
• OP: Mac sales. Short version — they did very well.
• OP: 9.4 million iPods. Declining. iPod touch 48% growth. Mix-shift to iPod touch 12% up, revenue growth 4% up. Share over 70%. Top selling MP3 sale, gaining share.
• OP: iTunes exceeded 1 billion dollars. App Store 225,000 apps, 11,000 just for iPad. 5 billion apps downloaded.
• OP: iPhone 8.4 million, 1.7 million iPhone 4 in 5 countries. 61% year-over-year growth. Customers loving new features, FaceTime, Retina Display, glass and stainless steel
• OP: 5.53 billion for ancillary sales, up over 70%.
• OP: 154 carriers in over 80 countries, Asia, Europe, Japan increasing
• OP: Over 100,000,000 iOS devices sold. iOS 4 very favorable, people loving new features.
• OP: iPad off to good start. 3.27 million iPads sold in 10 countries. 9 additional countries on July 23.
• OP: Apple retail still growing.
• OP: [Talking financial details about why their usual conservative numbers were exceeded. Again. Seriously]
• OP: 48 billion on hand, up 4 billion. Still preserving capital, short dated, high quality investments
• OP: Outlook to Q4. Offering free cases to all customers who purchased iPhone 4 until Sept. 30. Deferring revenue on those cases. Should cost 175 million.
• OP: Expect 18 billion, 35% gross margin in Q4. Sequential decline due to higher mix of iPhone 4 and iPad which have higher cost structures, also free cases. Back to school promotions as well.
• OP: In closing, they’re thrilled!
• Now starting Q&A
• Q: What are you hearing from corporations, adoption?
• TC: iPhone now in 80% of Fortune 100 piloting or deploying, 60% of Fortune 500. 400 higher ed institutions as well. iOS 4 was a help.
• TC: iPad in first 90 days. 50% of Fortune 100 testing or deploying. Incredible.
• OP: Higher iPhone and accessory sales than they anticipated.
• Q: Supply/demand breakdown, constraints?
• TC: iPod, none. iPad and iPhone are different, both iPad and iPhone 4 had backlog couldn’t fill, still selling as fast as they can make them. High demand is never a problem. Planning 1 million a month capacity was a bold move, analysts predicted 1 million in sales for years. Did that in 1 month, still doing that. Apple is increasing capacity as fast as they can. Confident they will be able to do it.
• TC: Just started ramping iPhone 4 in June. Limited days, only 4 days in Q.
• TC: greatly reduced iPhone 3GS sales around June 7. Didn’t launch iPhone 4, new 3GS on June 24. Result was significantly lower sales after June 7 until June 24.
• TC: 250,000 more units if they’d held inventory flat.
• Q: Why are there supply problems? Rumors Apple does that on purpose.
• TC: Would rather market move quickly to new products. How they want to manage it. Don’t purposefully create shortages for buzz. Not their objective. Would like to fill every order as quickly as they can. Demand for iPhone 4 absolutely stunning.
• TC: Returns for antenna issue are very small.
• TC: Pleasantly surprised how fast iPad has gotten going. Much faster to 1 million than iPod. Not following typical new product curve where it takes a long time to go mainstream after early adoption.
• OP: Won’t reveal iPod Wi-Fi vs. 3G split, but demand for all of them have been amazing. Average $640.
• Q: Will iPad cannibalize other product lines? Any thoughts?
• TC: Discuss it internally, only selling 3 months. To early to tell. Thrilled they recorded best Mac quarter ever even with iPad sales. Jaw dropper.
• Q: iAds business?
• OP: Just launched in July. Will learn a lot this calendar year. No further specifics.
• Q: Datacenter coming along?
• OP: On schedule. Everything going fine. Expect to complete by end of calendar year.
• Q: Cannibalization of iPad on iPod touch?
• OP: iPod ASPs down $7, driven by start of back to school promotion, stronger US dollar. Mix up on iPod touch.
• Q: Impact of bumper give-away?
• OP: Will need to defer revenue for iPhone 4 they sell where they’ve not delivered bumpers, not heard from customers wanting to place order. Revenue accrual with no cost, will expense cost when shipped to customers.
• Q: Android shipments increasing, competition to iPhone family?
• TC: Haven’t seen Android results, sum of several companies. iPhone up 61% despite drawdowns and transition, growing faster than market.
• Q: Competing tablets, 3G subsidies coming fall, impact?
• TC: Selling every unit they can make, looks good in every country they’ve launched it in. Anecdotally growing faster than early adopter, faster than any product he knows of. Doesn’t know what competition will do. Everyone working on something. Apple extremely happy with position and business model. Affordable rate structure, starts at $15, no commitment, aggressive device pricing. Yes, someone could jack up rate plans, subsidize. Not sure people will want another contract. If someone tries it, both learn.
• Q: iPhone software developers have complained not about App Store rules but about arbitrary nature. Apple done anything?
• OP: Always looking to make developers happy, 225K apps, 5 billion downloads, 1 billion in payments to devs, iAds a second stream. Care deeply. Want to have great apps. Success is unparalleled.
• TC: Vast majority of apps approved within 7 days. Many that aren’t have bugs, re-submitted, approved. Want to ensure pornography, graphic scenes don’t come on platform. Not everyone agrees, but that’s how they’re doing it.
• Q: Dev concern misplaced?
• TC: Value their concerns, modify when appropriate. Won’t say every concern misplaced. Value their feedback.
• Q: Move to mobility?
• TC: Long run, will see portables grow.
• Q: FaceTime, industry standard, how will it role out? Windows, Mac?
• TC: Sticking to financials for today.
• Q: iPhone strong in Asia, Europe, Japan. Why not North America?
• TC: Not law of large numbers. Phone market will increasingly become smartphone market. Steve said that long ago. Lots of domestic, Americas opportunities. Mac, iPhone, or iPad growing faster internationally. See that in revenues as well. Perspective, Americas growing 40% so this is huge number, just international numbers are killer.
• Q: iPhone growth has come from broader carrier distribution. Broaden within countries, emerging markets like China, India, pre-paid?
• TC: Extraordinary opportunity. Mac as example, AsiaPC Mac grew 73%, phenomenal. In China, grew 144%. Korea, 184%. HK almost 200%. Even in difficult economy like Spain, grew 59%.
• TC: iPhone space doing well in all key markets, expanding that, learning what they learned with exclusive deals, looking market by market, opening Spain up. Will go from exclusive in Spain to 3. More countries remaining. Increased distribution, market, move to smartphone. All in iPhone favor. Sees enormous opportunity. Biggest challenge is determining which to deploy resources.
• Q: Will there be iPad halo?
• TC: Agrees, most people external to Apple focus on cannibalization, internally focus on synergy between. iPod historically people at Apple felt iPod created halo for Mac. Will see about iPad, doesn’t want to predict it. Mac share still low. Still enormous opportunity to grow. Might be some synergy. iDevices -> Mac, iPad < -> iPhone. This is where it’s great to have lower share. If iPad cannibalizes PCs, fantastic for Apple. Big market.
• Q: Impact of wage hikes from sub-contractors?
• TC: Don’t want to get into terms of commercial agreements, competitive info.
• Q: Expand carriers to tap domestic demand, or enough with AT&T?
• TC: Very happy to be partner with AT&T. Been first class partner, pioneered smartphone growth from network POV in US. That’s all.
• OP: Best iPhone they’ve ever shipped, higher cost structure.
• Q: Gap iPhone, iPad supply and demand? How many units?
• TC: Don’t know. Only know if you have enough supply. Don’t have it.
• That’s all folks!

Hot on the heels of Apple’s Q4 results come AT&T’s Q3 report, and the iPhone-related news keeps getting better and better, including a record 3.2 million activations, 40% of which went to new customers.

And the records didn’t stop there. Highest Q3 net subscriber gain, best ever Q3 churn rate, largest quarterly increase of integrated devices (like iPhone) in history, and 33.6% increase in data revenue.

What’s astonishing is this growth persists despite widespread, ongoing — almost farcical at this point — reports of poor network experience for iPhone users. Imagine if AT&T could build out infrastructure to meet demand in areas like San Francisco and New York?

And how happy are they Verizon appears to be out of the iPhone picture, at least for now?

Apple announced their Q3, 2009 financial results today. - Press release is live: The Company posted revenue of $8.34 billion, with 5.2 Million iPhone sales in the quarter. (That makes an install base of 45 million plus iPhone OS devices, including iPod touch). Boom.

“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple’s CEO. “We’re thrilled to have sold over 5.2 million iPhones during the quarter and users have downloaded more than 1.5 billion applications from our App Store in its first year.”

Apple also hosted an accompanying conference call, highlights after the break!

(Updates posted in reverse chronological order from latest or oldest)

• And we’re done!
• App Store pricing. Race to the bottom with $0.99 apps? Can Apple help sort out quality vs. quantity? Tim Cook: has ideas on categorizing Apps differently. Today does it based on type. As App Store grows, makes sense to have lower prices but that’s up to developers.
• iPhone sales, anything on new activations vs. upgrades? Tim Cook: Can’t share, confidential to carriers.
• iPhone in China? Tim Cook: Nothing to add today but continues to be priority project. Hopes to be there within a year.
• Supply constraints to effect international rollout? When will it balance? Tim Cook: Won’t balance in short term but won’t give prediction. Too hard to judge demand without supply. Vast majority will be selling 3GS by end of quarter, may move date by a week or more.
• iPod touch user base, how many upgraded? Tim Cook: a good number, won’t be specific. Priced aggressively. Want to get platform out there, good for ecosystem, developers. Try to get people to upgrade.
• Competitors tinkering with pre-paid model. Apple interested? Tim Cook: Apple doing that as well in markets that are predominantly pre-pay. Apple has lots to learn. Still a beginner. Can make improvements. Model works well in post-paid, but pre-paid could be interesting. Have multiple things going on. Hope to improve going forward.
• Asking about iPhone activations. US represents 40% of activations. Shouldn’t international side pick up, grow faster? Tim Cook: don’t release sales by geography. Smartphones in general sell better in post-pay environment. Not unique to Apple, reality of market.
• Follow up on netbook. Think an emerging market for a truly mobile device, larger screen, do more than with iPhone? Tim Cook: Never discount anything, won’t answer about new products. Customers want full featured notebooks. Apple delivers those, delivers value. Customers very happy. Current netbooks are very slow, software is old, don’t have robust computing experience, lack horsepower, small screens, cramped keyboards. People not happy. Apple will only play where they can deliver products that are innovative, proud of.
• Will Apple invest in NOC to take pressure off carrier? Cook: No plans to do so. When they entered business, they came to conclusion they could deliver world class handset, deliver something revolutionary. Other people have better skills at networks. Apple working with them as partners.
• AP asks if growth of Apps constrained by network capacity of carrier partners? Tim Cook: better question for them. Without singling out [AT&T] Cook sees them investing in making better networks, happy with rising ARPU, lower churn. Changes customer acquisition. Thinks they will continue to make investments to deliver faster networks.
• Has outgrown market 18/19 quarters. Cook thinks that means they have right approach.
• Asking about netbooks. Tim Cook: Apple’s goal is not to build most computers but to build the best. Will play at whatever price point they can build the best. Don’t see a way to build a great product at $399/$499. Thinks customers, many customers, become disenchanted after they buy them. Continue to focus on building best and giving tremendous value.
• Additional distribution and pricing model needed to sustain growth? Tim Cook: Just took major change with intro of $99 product. Reason to do that was view of elasticity. Working hard to continue expanding distribution in countries they’re in, (where it makes sense) and adding new countries. Still large markets left uncovered. [China?]
• RBC Capital asking about competitive App Stores and software. How to out innovate in user experience and leadership? Tim Cook: Won’t talk about future plans. Summarize last 30 days: shipped iPhone 3.0, App Store now available in 77 countries. Install base more than 45 million (iPhone + iPod touch). Quotes App Store stats. 65,000 apps compares RIM/Nokia, Android. Substantial lead in Apps and innovation. Years ahead of other people.
• Asking why iPod channel was reduced. Tim Cook: to support new Shuffle and easter holiday, they increased. When that was done, they decreased, and also demand was lower and iPhone cannibalized. Shuffle, nano, and classic demand also lowering (“classic MP3 player market”). Still in target range, however.
• Apple benefitting from higher iPhone revenue. [No doubt!]
• Asking if $99 iPhone 3G actually served as traffic driver for iPhone 3GS. Was that it’s role, or is it really part of iPhone story. Tim Cook: Focused on total iPhone story. Too early to tell ultimate mix due to only shipping in 18/80 countries and supply constraints. Also upgrades happen early, upgraders likely to pick newer version.
• Talking about $999 MacBook vs. cheaper MacBook Pro pricing mix. Tim Cook: competitive info.
• Asking why Snow Leopard was priced so low. Tim Cook: Even better Leopard, redefines 90% of projects. Something about not even Windows building in (Exchange support?). Priced aggressively so all users can upgrade. Hoping they do. Expect to ship later this quarter.
• Talking about MacBook pricing elasticity. When they can do it at lower prices, they will but won’t put Apple brand on products that don’t innovate.
• Asking about 5.2 million iPhone sales in Q3 and supplies still constrained. How’s inventory. Tim Cook: Flat sequentially. What that means is selling more units at the end, don’t have a channel loaded. Haven’t seen anything like it. About 1.83 million inventory, including in transit, invoice, demo — counted conservatively.
• Talking about reduced margins due to back to school promotions, lower MacBook prices, etc.
• Questions on guidance and margins…
• Follow up question on progress in enterprise accounts? Tim Cook: Growing interest with release of iPhone 3GS and iPhone 3.0 due in part to new hardware encryption and security policies. Doing best in corporate and government who allow individual purchases. 20% of Fortune 100 customers bought 10,000 iPhone, some have bought 25,000. In over 300 higher education institutions.
• David Baily asks how $99 iPhone is doing. Change in mix since launch? Tim Cook: Acceleration of total unit sales, can’t tell exact mix since it’s competitive data. iPhone 3GS supply is still constrained, so demand very robust.
• Nothing to announce about U-Verse, 3G in laptops. Happy with AT&T relationship.
• Tim Cook answering Gene Munster on how carrier relationships will evolve: most of the carriers they’re doing business with are thrilled with lower churn and higher ARPU. Customers demanding iPhone. Looking to expand.
• Closing canned remarks. Can has Q&A soon?
• $500M prepayment to Toshiba for NAND flash memory
• 31.1 BILLION in cash on hand(!)
• More financial stuff…
• 1.5 billion in revenue for Apple Stores.
• iTunes experience getting better. 8 billion songs purchased.
• Didn’t recognize iPhone revenue until iPhone 3.0 became available on June 17.
• 1.69 billion from iPhone, accessories, carriers, etc.
• App Store stats: 65,000 apps. 3.0 will create even more innovative apps.
• Continuing to roll out 3GS to 80 countries this summer.
• iPhone 5.2 million sold in June quarter! 1 Million iPhone 3GS in 3 day launch. Cannot make enough to meet demand. Working to address this.
• 70% of US market. iPod top selling MP3 player. Gaining share in almost every country tracked.
• iPod touch grew 30% year over year.
• 50% of iPod buyers are still new buyers, even in established markets
• Traditional MP3 players declined, as internally forecast. Reason why they developed iPod touch and iPhone. They’re cannibalizing themselves. Business will still last for years.
• 10.2 million iPods. Down from last quarter. Reduced channel inventory and sell-through declines.
• 13% increase in laptop sales. Customers favorable on new portables.
• 2.6 million Macs. Sales increased 100K units over prior year.
• Lots of financial info we shan’t bore you with. Read press link below…
• Record June revenue. Highest non-Holiday revenue in history.
• Call’s about to start. Will update as news is announced.