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Apple on 'Fall Transition', Apple TV, Impact of Rumors and More

Apple held its Q3 2012 financial results conference call this evening. We have posted a full transcript of the call.

From the call, Apple discusses their expectations for the next quarter which runs through July, August and September. In particular, Apple CFO Peter Oppenheimer expects gross margins to decline in the next quarter due to a "Fall transition". He was unwilling to provide more details on direct questioning:
A: "Fall transition" that I spoke about is driving most of the decline that we see sequentially in gross margin. Not something that we're going to talk about in any level of detail today. We could not be more confident in our new product pipeline.
Apple uses such terms as "Fall transition" to represent changes to their product lines. Lower expected gross margins could point to new products with lower prices. The obvious speculation would point to the much rumored smaller/cheaper 7.85" iPad. Whatever the "fall transition" is, Apple expects it to take place before the end of September in order for it to impact the next quarter.

Apple was also asked about the impact of rumors and speculation on their sales
Q: Rumor and speculation, how much does it hurt sales in the quarter?

A: There's a lot of speculation out there. It's difficult to sort out but I'm fairly convinced that there's an incredible anticipation out there for future products. As you would expect given what we've been able to deliver in the past. I think it's a reasonable amount.
And later...
Try very hard to keep our product roadmap secret and confidential. We go to extremes to do that. That, however, doesn't stop people from speculating or wondering and they'll never do that. The great thing about this country is that people can say what they think and so-forth. I'm not going to spend any energy trying to change that. I'm glad that people want the next thing. I'm super happy about it. There are obviously quite a few that want what we're doing now as well. I'm not going to put any energy into trying to get people to stop speculating. I don't think it would amount to anything.
Finally, Apple is still optimistic about the Apple TV, and continues to believe in it despite it being a comparably smaller market.
Q: Did you give an Apple TV number and updated thoughts?

A: Sold 1.3 million last quarter, up more than 170% year over year. Brings fiscal year to 4 million units. This is pretty incredible. Still at a level that we would call a "hobby" -- continue to pull the string to see where it takes us. Not one to keep around projects that we don't believe in. Lot of people here that believe in Apple TV. Continue to invest.

Q: Don't do hobbies to be hobbies -- do it to make something bigger?

A: We do it because we think it'll lead us somewhere. We'll see. 4 million isn't a small number and there are a lot of believers in it.
We have a full transcript available from the call.

Related roundup: Apple TV

Top Rated Comments

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26 months ago
Ok - so there's no downvote button (for now) - so I'll say it out loud. (And still be bludgeoned for it)

For the first time in a long time - I'm not remotely excited about what Apple has in store for the remainder of this year. Something isn't there - that once was...

I know, I'm a horrible person. :(
Rating: 26 Votes
26 months ago

So disappointing that Apple failed so greatly on their earnings last quarter.


I checked the dictionary for the word fail, and making over $8b profit didn't show up :rolleyes:
Rating: 24 Votes
26 months ago

So disappointing that Apple failed so greatly on their earnings last quarter.


:confused:
Rating: 15 Votes
26 months ago
"The great thing about this country is that people can say what they think and so-forth."

Is it just me or do Americans think they invented free speech, you can say what you think in the vast majority of countries!
Rating: 12 Votes
26 months ago

So disappointing that Apple failed so greatly on their earnings last quarter.


Apple, the worlds most valued company, grew 23% over one year, beating their own quarterly predication. That is only disappointing in a VERY specialized sense of the word.
Rating: 12 Votes
26 months ago

So disappointing that Apple failed so greatly on their earnings last quarter.


..... So unload your stock so that we can buy it.......

Apple is a Cyclical company with relatively predictable product pipelines.

Apple really needs to be judged in a YoY capacity.

They are doing just fine. If we see similar numbers for the next two quarters (Depends on exact iPhone and iMac refresh periods) then we have a real issue.

At the moment it's no different than any other quarter. Apple releases numbers (beating their own guidance by some amount) and then the stock goes down to recover over the next few weeks.

While it's true they didn't beat their own numbers by the same ratio as they have in other times, that could be any number of legitimate reasons, the simplest of which is that Tim Cook may be trying to give more accurate guidance.

At the end of the day, the official guidance was well exceeded, they have strong YoY growth and as a company their image is only improving.

Cracking success I would say.
Rating: 9 Votes
26 months ago
iLove my ATV
Rating: 9 Votes
26 months ago

iLove my ATV


But it could be soooo much better!!! Eg Web browser, more tv channels! And maybe Apps???
Rating: 9 Votes
26 months ago
I really like my Apple TV.

Hopefully Apple continues to progress the platform.
Rating: 7 Votes
26 months ago
Apple is Doomed™


Great news on the Apple TV. The more that becomes a viable resource the better.

Open it up to developers Apple. They'll take that platform to new heights.
Rating: 7 Votes

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