Apple's Q2 2006 Financial Conference Call Notes

Apple reported on their Q2 2006 Financial Results and provided a webcast conference call. Here are relevant notes from that conference call:

Mac business 50% of quarterly revenue.

- Up 4% from the same quarter last year
- Pleased with Intel transition progress, and "solidly on track" to complete the Intel transition by the end of calendar 2006.
- "Pause" in sales due to transition anticipation. Reasons listed include: delays due to shipping delays on MacBook Pro, users awaiting Universal Apps and users awaiting upcoming Intel Macs.
- 1,112,000 Macs sold during March; $1.572 Billion in Revenue.
- 614,000 Desktop Macs ($833 million revenue)
- 498,000 Portable Macs ($739 million revenue)

Music business 50% of quarterly revenue

- Up 79% year over year
- Over 50 million iPods sold cumulatively
- 8,526,000 iPods sold
- Over 1 billion iTunes Songs sold. 87% marketshare.
- iTunes: 2.9 million songs, 60,000 podcasts, 9000 music videos, 70+ television programs
- iPod: 78% of MP3 player marketshare (up from 71% in December) in U.S.
- 2000+ iPod Accessories
- 40% of New Cars sold in U.S. will offer direct iPod integration

Retail
- $636 Million in revenue
- 50% of Macs sold were "new to Mac"
- 141 Stores Open by end of Quarter

Outlook
- Still expect a pause in demand in Mac business due to transition
- Happy with the Intel transition
- "Very excited about the products in our pipeline"

From Q&A
- Software sales better than expected (iLife and iWork, particularly).
- iPod: Plans to increase local advertising and point of sale locations in outside countries to boost marketshare.
- Question about Intel Mac mini price increase: Apple viewed Mac mini as still an "incredible" value, wouldn't comment on future pricing plans.
- Supply/Demand balance for Intel Macs.
- 40 New retails stores this year, primarily in the U.S.
- Boot Camp impact? A lot of customer requests for it. Many Windows users were considering switching to the Mac, and feel it makes it more appealing. Still gathering data. "High level of interest". Not releasing the download number for Boot Camp.
- Again, on target to transition the entire product line to Intel by end of the year.
- No plan to sell and support Windows.
- Music store "above break even"
- Don't feel the French DRM legislation is good for anyone
- Very excited about the product pipeline including Macs
- Nothing holding back the Intel transition

Related Roundups: MacBook Pro, Mac Pro
Buyer's Guide: Mac Pro (Neutral)

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