Apple's Beats brand in April unveiled the Powerbeats Pro, a redesigned wire-free version of its popular fitness-oriented Powerbeats earbuds.
Apple 1Q 2008 Results: Record $1.58 Billion Profit
- 2,319,000 Macs shipped (44% unit growth and 47% revenue growth)
- 22,121,000 iPods shipped (5% unit growth and 17% revenue growth)
- 2,315,000 iPhone sales
"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks."
"Apple's revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarters record-breaking results," said Peter Oppenheimer, Apple's CFO. "Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding an ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94."
The 2nd quarter expectations, however, fall short of analyst projects. We have posted notes of interest from the conference call:Conference Call Notes
- Highest Revenue ever. Record Mac, iPod and iPhone sales. Strong demand for software.
- Mac: 47% of quarterly revenue. 44% year-over-year growth. 2.5x the general market growth
- iMac sales remain robust. 53% year-over-year growth
- 38% portable year-over-year growth
- Successful launch of Leopard. "Terrific" response.
- Sold over 22 million iPods.
- New type of iPod: iPod Touch. Potential to grow the iPod from just music/video player to first mainstream wifi-platform running applications.
- iPod Touch responsible for overall increase in average sales price.
- iPod Touch software upgrade last week (at macworld)
- iPod U.S. share for MP3 players is consistent with year ago quarter.
- In International, gaining marketshare in virtually all European and Asian countries.
- Over 2.3 million iPhones sold in quarter.
- Apple Retail Stores. Revenue was 1.7 billion. 53% year-over-year growth.
- 3rd store in Manhattan. Great start. entire floor to genius bar/personal training/pro lab
- Over 50% of customers buying Macs in stores were new to Mac.
- 38.4 million visitors in the retail stores during the quarter
- Cash balance increased to over $18.4 billion.
- Looking ahead to next quarter. Targeting $6.8 billion in revenue. Gross margins of 32%. Lower margins due to 1) sequential decline is software sales (as Leopard and iWork sales slow) 2) lower revenue due to seasonality.
- Enthusiastic about announcements at Macworld. Very confident in our product line outlook for 2008.
- Confident hitting 10 million iPhone sales goal by 2008
- Sees iPod Touch as a new Wifi mobile platform
Q: Any cannibalization of iPod sales from iPhone?
A: Not seen in Europe, and difficult to say in U.S.
Q: Use of cash for stock buyback program?
A: These possibilities are discussed, but preference to maintain strong balance sheet for strategic investments or acquisitions.
- Very confident in our business, strategy, and products. Very confident about what's coming in the product line. Couldn't be more proud of the Apple team. We give guidance that we have reasonable confidence in achieving.
Q: MacBook Air. Do you think that will be incremental or cannibalize exhisting lines.
A: MacBook Air orders have been very strong but too early to tell regarding cannibalization.
Q: Mac Channels such as Best Buy
A: About 286 stores in Best Buy. Thrilled with results. Added to the Mac momentum. Will be expanded further to 600 over the next 6 months.
Q: iTunes Rentals goals? Drive hardware sales or profit by itself?
A: We think customers are going to love it, but we'll have to see. Goal for iTunes store has been to run it above break-even and use it to drive hardware sales.
Q: Regarding MacBook Air market?
A: The MacBook Air will appeal to travelers, professors, all different kind of people who want to access a computer very quickly where ever they are. Competitively priced. Great new product. Orders are very strong.
- 19% of the Mac OS X installed base is enjoying Leopard
Q: Question about Revenue sharing on iPhone. France selling unlocked iPhone.
A: We aren't discussing terms of agreements with carriers.
- Still planning on launching iPhone in Asia and additional European companies in 2008.