Apple's 2nd Quarter Financial Conference Call
Category: Apple/Mac OS...
Posted Wednesday, April 23, 2008 at 04:04 PM [GMT-6]

Note: Refresh this post to see updates. New comments added at the top. You have my sympathies if you have nothing better to do.

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OK, other responsibilities beckon, so I'm signing off, even as the conference call drones on.

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Clarification on iPhone inventories: more shortages in Apple stores, due to multiple unit buying; Europe not experiencing same level of shortages, and in fact are discounting iPhone prices

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Apple has acquired PA Semi, a small chip designer, but refuses to comment on the reason. (Some speculation is that Apple bought the company to get the employees, not their technology.)

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Refused to address question about gross margin for MacBook Air (company policy)

MacBook Air "near" a supply/demand balance now, recovering from early shortages.

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Carrier partners are free to price iPhones however they wish.

No comment on upcoming availability of 3G iPhones.

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iPhone 2.0 software will be provided for free to all iPhone owners, regardless of when they bought the phone.

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Apple not projecting continued free fall in DRAM and NAND prices, feeling that they're already priced near their cash cost. But, also not expecting significant price increases.

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Leopard sales: $210 million revenue during first two quarters ($170 million in previous quarter, $40 million this quarter), best selling OS in Apple history

Almost half of the new Apple Stores in 2008 will be international.

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Projecting $7.2 billion revenue in third quarter revenue, which is down slightly from Q2, but still up year over year.

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Refused to address overall economic climate and how it might affect future performance. Interestingly coy. Could Apple actually believe that its target market is immune?

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Apple has surpassed Dell in the portable higher ed market (unclear as to whether this is in units or $)

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Direct sales: 53%

400 Best Buy stores are now selling Apple computer products; roll-out continues

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Response to analyst question re: shortage of iPhones - Apple still projecting 10 million unit sales for full year; admits that iPhones remain in short supply; feeling is that many people are buying iPhones with the intent of "unlocking" them to run third part software

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NAND and DRAM pricing hit historic lows during quarter, contributing to higher than expected gross margin (32.9%); lower hard drive prices also helped

Negative impacts on gross margin: lowered iPod shuffle prices, increased iTunes sales

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iPhone 2.0 software package will be delivered late June (later than previously projected?)

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Generated $1 billion in cash during quarter, now has over $19 billion on-hand

3rd quarter profit projection: $1 earning per share

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Retail stores sold 67% more Macs, quarter vs quarter

$7 million per store, average quarterly revenue

Will soon open stores in Australia, Ireland, China

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1.7 million iPhones sold during the quarter; related revenue - $378 million

200,000 (!) developers have downloaded the SDK for iPhone applications

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iPod revenue grew 8% year over year. Not bad for a saturated market.

Share of US MP3 player market continues to be over 70%

iTunes sales surpassed Wal-Mart's; Apple is now largest music vendor

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Peter Oppenheimer, Apple's CFO, is reporting record earnings (over $1B) for the quarter, up 36% over last year.

US sales grew 40%; international 47% - year over year.

Apple Store sales grew 74%, year over year.

Education sales grew 35%, year over year, another record.

2.9 million Macs shipped, 51% growth, 3.5x overall PC growth rate

Desktop sales grew 37%; sales of portables grew 61%

36% of total revenue attributed to music business

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OK, we're underway. However, it seems that Jobs will not be participating. Bummer.

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The conference call was supposed to begin at 4:00 pm (CDT), but we're still listening to a piano concerto. I can only assume that Steve Jobs is still trying to decide between the black turtleneck and the, um, other black turtleneck.