iPhone Business Model


  • Waiting for call to start, any minute now. Will post updates only when major iPhone-ish news is announced (or inner fanboy takes over).
  • Covering Macs
  • iPod touch growth, customers embrace superior features and apps.
  • US market share for MP3 players 70%, gaining share in most international markets
  • UK, France, Germany, Japan, Australia, China, growing.
  • iTunes store had good quarter.
  • DRM free now all 4 major labels and indies.
  • App Store unparalleled succes.
  • 35,000 apps, +20,000 since last call
  • Almost at 1 billion downloads

More after the break!

  • App Store key differentiator
  • Still believe they are years ahead of competition.
  • iPhone sold 3.8 million, 123% increase from a year ago
  • iPhone reach now in 81 countries
  • iPhone 3.0 and SDK being covered, highlighting features...
  • (We've already done our massive coverage)
  • Delaying recognition of revenue on all iPhones sold since March 17 delayed until 3.0 is released this summer. Prior sales not effected.
  • Covering Apple Stores
  • Margins 36%, driven by commodity costs being lower, sales of higher margin products like software and accessories, lower freight costs
  • Cash for short term is 28.9 billion (!)
  • Going to conserve capital
  • Covering projections for next quarter...
  • Predicting 7.7 - 7.9 billion (includes delay in iPhone revenue recognition)
  • Can't wait to get iPhone 3.0 into customer's hands this summer. (er... and other stuff :) )
  • (Giving iPhone the most love?)
  • Q&A now beginning...
  • Talking component prices, NAND memory prices might be going up...
  • Bank of Montreal in the house! Asking about cash flow being down... snore.
  • Talking about sales of desktops, laptops...
  • Cook: For Apple is about doing great products, Netbooks are cramped, junky, small, not a consumer experience and not something they would put the Mac brand on. Not interested in it, don't think long-term customers are interested either. Watching space, however.
  • Customers looking for netbooks might want to look at iPhone, iPod touch
  • If Apple can find innovative product that makes contribution, they have some ideas, pipeline looks fantastic.
  • Netbooks - stretch to call them computers -- are propping up unit sales for others.
  • App Store mix between paid and free, between iPhone and iPod touch? Apple doesn't disclose.
  • Key growth to iPod this quarter despite economics, iPod touch more than doubled year over year.
  • iPhone + iPod touch now 37 million units
  • Tim Cook: we're not economists (!)
  • Question: Survey says #1 reason people don't buy iPhone
  • Cook: AT&T good partner, #1 carrier, very happy to do business with them. Have put full weight behind iPhone. No plan to change it.
  • Cook: Verizon is on CDMA, chose from beginning of iPhone to focus on one phone for world, which means GSM route. CDMA has no life to it after a point in time.
  • Cook: No iPhone in China yet, would like to be in next year. Nothing to announce today.
  • Steve Jobs?
  • Oppenheimer: Look forward to Steve returning at the end of June.
  • Talking Mac, desktop, "things I can't talk about" in pipeline. Years ahead, leader in space. Won't leave price umbrella.
  • Talking about currency values now. Snore.
  • iTunes upgrades of music to DRM free? Oppenheimer: too soon to tell.
  • Very strong growth in music, video, apps
  • Walmart for iPhone?
  • Cook: Strong partner for iPod, expanded for iPhone. Believe they provide extended reach into areas not hitting before. Pleased with results so far, but early going and not much to report.
  • iPhone now being sold in almost 50,000 storefronts in 81 countries. Sizable presence and space.
  • Channel inventory, 1.57 million units in inventory last quarter. Apple very conservative in count. 100,000 demos in 50,000 storesfronts, count units in transit from factory not yet for sale. 100,000 units last quarter. Also count inventory all the way to storefront.
  • First June quarter with worldwide spread. Saw channel inventory in countries they were in at beginning of Dec. quarter fell at beginning, new countries added net at 80,000. Now 1.83 million units.
  • Net net, Apple very comfortable with inventory, people want more.
  • What steps Apple taking to ensure iPhone apps can be discovered, different from music discovery?
  • Oppenheimer: We include easy to find top 50, 100, paid/free. Expanding genres. Team has done fantastic job making apps easy, fun to discover.
  • Any unusual patterns in app sales vs. music?
  • Oppenheimer: Hitting 1 billion in 9 months, customers having fun. Games are quite popular. 1 reason why iPod touch has been success.
  • Palm Pre?
  • Cook: difficult to comment on products not shipping, can't talk intelligently.
  • iPhone sold 21 million, highest satisfaction. Years ahead. Look at business through software platform lens. Benefits Apple and customers. Games to serious medical apps. Power of device and ecosystem is enormous, Apple just scratching surface.
  • Talking about margins, education buying season.
  • (Free iPod touches with Mac purchase for education again this year?)
  • Protecting IP (Palm Pre?!) haven't seen anything yet? Patent position or waiting for shipment?
  • Cook: Think iPhone innovation leading industry by years, competition is great... as long as other companies invent their own stuff.
  • That's it, we're done!

UPDATE ON RESULTS: Apple has published their results:

  • The Company sold 11.01 million iPods during the quarter, representing three percent unit growth over the year-ago quarter.
  • Quarterly iPhone units sold were 3.79 million representing 123 percent unit growth over the year-ago quarter.

Apple doesn't break out iPod touch numbers, but last month during the iPhone OS 3.0 event, Apple did say 30 million iPhone OS units were sold, with 17 million being iPhone, leaving 13 million iPod touches on the market... and likely growing.

Original article after the break..

Apple will be reporting their Q2, 2009 financial results today at 5pm EDT/2pm PDT. While often tedious and filled with legally necessitated boilerplate responses, Apple typically discloses iPhone sales figures, App Store numbers, and other related metrics. TiPb likely won't live-blog the call (which you can listen to via Apple.com if you really want to), but we will update this post any and all iPhone news, especially if we get some rumbling like last quarter's veiled legal threats against the Palm Pre...

Remember, it's all about the profits. Check back later this afternoon/tonight for the updates!

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