New Skylake MacBook Pros coming in the fourth quarter.
Apple Reports $1.14 Billion Profit for Q4 2008
Apple shipped 2,611,000 Macintosh computers during the quarter, representing 21 percent unit growth and 17 percent revenue growth over the year-ago quarter. The Company sold 11,052,000 iPods during the quarter, representing eight percent unit growth and three percent revenue growth over the year-ago quarter. Quarterly iPhone units sold were 6,892,000 compared to 1,119,000 in the year-ago-quarter.
"Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone -- we sold more phones than RIM," said Steve Jobs, Apple's CEO. "We don't yet know how this economic downturn will affect Apple. But we're armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt."Apple will provide live streaming of its Q4 2008 financial results conference call at a 2:00 p.m. PDT.
Conference Call Highlights- Record breaking: more Macs than in any other quarter in Apple's history. More iPhones than in all previous quarters combined. More revenue and earnings than any previous September quarter.
- iPhone unit sales grew significantly. If iPhone results were not deferred (subscription accounting), it would have represented 39% of Apple's revenue for the quarter.
- Sold nearly 6.9 million iPhones during September quarter. With more than 2 months to go, have already surpassed 10 million iPhone sales in calendar 2008.
- In more than 70 countries by the end of the December quarter. 3100 points of iPhone distribution in the U.S. Over 30,000 points of distribution around the world.
- 21% year-over-year growth for Mac sales, beating industry growth
- Despite growth, believe purchase delays due to speculation and budget constraints
- Sold over 11 million iPods, new record for a non-holiday quarter.
- iTunes Store had a good quarter. Over 65 million iTunes customer accounts. Over 8.5 million music titles. Pleased with fall lineup including HD shows from major networks.
- Apple retail had strong results. Over half of Macs sold were to customers who had never owned a Mac before. 247 stores by end of quarter.
- Better than expected gross margins due to better component prices and software sales.
- Outlook for next quarter: "best products we've ever shipped". Very confident in business. Prudent predictions for December quarter. Revenue target between $9-10 billion.
- Steve Jobs speaking at conference call. Talks about impact of subscription reporting on financial results. Non GAAP financial results will be reported alongside GAAP reporting to show the average investor the impact of the iPhone.
- Jobs: Apple beat RIM. RIM 6.7 million Blackberries, Apple sold 6.9 million iPhones.
- Jobs: Measured by revenue, Apple has the world's 3rd largest mobile phone supplier. Nokia and Samsung are #1 and #2. Apple at #3. Sony Ericsson at #4.
- Jobs: Who knows what the future results will be due to economic slow down, but not bad for being in market for so short a period of time.
- Jobs: App Store. 200 millionth application will be downloaded tomorrow. Rate of new applications being submitted is increasing every week. Competitors are scrambling to copy the App Store, but it's not that easy to do. All of this in 102 days.
- Jobs: New MacBook and MacBook Pro. Notebooks comprise 2/3 of the Macs they sell. Best products they've ever created. Customers already love them. Anxious to see the demand trajectory. Unibody precision would normally cost hundreds of dollars by themselves. LED Backlights, GPU. New notebooks are the greenest products Apple has ever offered.
- Jobs: The economy. We are not economists. But: we have the best customers in the world. Smartest, product aware customers in the market. They have chosen Apple's quality products. While they may postpone purchases, they are unlikely to abandon Apple's products. More likely to delay than switch. We still have a minority marketshare of the PC market. While we may not appeal to every prospective customer, the percentage of new customers we have to attract is relatively small to significantly impact our revenues. Feel very good about Apple's product lineup. We have the most talented designers in the world. None of our competitors can deliver productt in this class. $25 billion dollars and zero debt. We can continue to invest in R&D.
- Summary: strongest Apple products, most talented employees, best customers and $25 billion in the bank.
- Q: Why is there just a disparity between results and next quarter guidance? A: Slow period in October, but a lot of prudence is built in.
- Q: Thoughts on share repurchasing? A: I think this economic downturn will represent some extraordinary opportunities for companies that have cash. We are very comfortable with our cash position in the bank.
- Q: How much more expensive of the unibody aluminum shell? A: Many new technologies and features besides just the unibody. As said in the last call, these new products will have high cost at first and will come down over time.
- Q: Can you comment about the pricing of the Mac line? And thoughts about netbooks? A: This particular downturn is not creating a market of cheaper computers. That market has existed. There are parts of that market we choose not to play in. We choose to be in certain segments of the market, and choose not to be in certain segments. Will the downturn drive customers to different cheaper products? I'd be surprised if that happened in large numbers. I think there are a tremendous number of customers that we don't have that would like to and can afford to buy Apple products. We'll see what the ratio of those two are, but we're not tremendously worried. The netbook: not a lot of them getting sold, one of our entrants into that category is the iPhone. Browsing, connectivity, etc... the iPhone is a pretty good solution to that. We'll see how the netbook evolves, and we have some pretty interesting ideas if it does evolve.
- Q: Factors impacting on Mac sales? A: K-12 budget constraints resulted in 7% contraction, customers were delaying purchases due to rumors about the new portables, but saw a considerable rebound in sales.
- Q: In 2009, with more competition, how do you think of your roadmap? A: We have to be the best, and I think we have to not leave a price umbrella underneath us, and we are working hard to fulfill both of those goals. Great partner in AT&T, together, I think we're both very committed at making the iPhone a great value for customers next year and beyond.
- Q: Cheaper Macs? A: We chose not to server a certain customer base. We don't know how to make a $500 computer that's not a piece of junk. Our DNA will not allow us to ship that. We can continue to deliver value to customers we do choose to serve.
- Q: How are you thinking about Apple TV and digital living room opportunity? A: I think the whole category is still a hobby right now. And I don't think anyone's succeeded yet. Given the economic conditions, I continue to believe it will be a hobby in 2009.
- Q: Tablet and touchscreens? When you look at tablet computing, does that get to be a more attractive opportunity? A: I think we have such creative people that are looking at a lot of things, but can't talk about products we're working on.