At this very moment Apple is webcasting its conference call for all to listen. World of Apple will offer a breakdown of this key points and some of the Q and A’s on this page.

Call Notes

  • Another record breaking quarter in Apple history
  • Highest revenue in June quarter ever
  • Highest Mac sales in a quarter ever
  • Mac business represents ~60% of Quarterly revenue. 33% Growth year-over-year growth.
  • Sales of Mac notebooks grew 42% year-over-year.
  • Music Business represents ~40% of Quarterly revenue.
  • iTunes is reported to be third largest music retailer in US
  • Apple says it sold 270,000 iPhones in first 30 hours of sales
  • AT&T had iPhone activation problems at first but all is well now
  • Based on surveys, people love their iPhones. 90% of iPhone owners were Extremely or Very satisfied with their phone. 85% Extremely or Very Likely to recommend the iPhone to others
  • Apple intends to sell 1 million iPhones by end of 4th quarter (September 29)
  • iPhone coming to “select” European countries in Q4
  • Apple’s goal is to sell 10 million iPhones in calendar 2008
  • Plan on incorporating new Software and Features into iPhone over time.
  • Will begin to receive payments from AT&T in the future quarters.
  • Subscription accounting on iPhone and Apple TV sales.

Questions and Answers

Q: More details on iPhone sales?
A: We’ve gotten off to a great start. Focus is not on initial sales, but instead a long term business. Our perspective is measured in years, not months. Reward is huge. Apple has the skill that makes us confident to succeed. iPhone in Europe next quarter in a few select countries. It took Apple almost 2 years to sell one million iPods, we expect to sell one million iPhones in the first full quarter.

Q: See any shortages in iPhone components?
A: Almost all AT&T and Apple Retail stores have the iPhone in stock and we are shipping units off of Apple.com in 1-2 days. We’ve included our expectations of long term supply/demand in our projections.

Q: You mentioned no payment from AT&T this quarter, can you clarify that comment?
A: We can’t go beyond it and won’t discuss the terms of the agreement. We will recognize revenue eared from AT&T over time.

Q: How to model AT&T revenue share?
A: Can’t comment on it.

Q: In the near term, how do you think about the initial wave of iPhone sales.
A: 270,000 in the 30 hours laster quarter. What we’ve seen so far gives us a lot of confidence we can sell 10 million iPhones in 2008.

Q: In addition to payments from AT&T are you getting any other payments for placement of applications on the iPhone?
A: We don’t discuss it.

Q: How’s the Best Buy rollout? Did it contribute to Mac sales?
A: Around 50 stores at the beginning last quarter, around 75 at the end. Over 200 by end of this quarter. 300 by end of calendar year.

Q: iPhone price points? Should we assume we’ll have a family of Phones?
A: We believe the iPhone offers tremendous value that customers couldn’t even imagine before. It’s 3 products in one.

Q: Any seasonality in the iPod and Mac?
A: June quarter begins education buying season. June -> September seasonality has been mixed. In terms of the iPod, we’ve learned that what drives the product is innovative new features and holiday seasonality.

Q: You see any slowdown in sales prior to Leopard?
A: We’ll have to see, but last quarter we sold more Macs than ever.

Q: iPod cannibalization from iPhone?
A: Haven’t seen any in the June quarter, but will monitor it.

Q: Are there thoughts about addressing corporate email on the iPhone?
A: We think that the iPhone is a breakthrough product for all customers including business customers. With very little help from the IT department, it will work.

Q: Store Openings?
A: We expect to open 12 stores in the September Quarter to end the year with 197 stores. We’ve not set a target for 2008 openings.

Q: Apple TV Units?
A: We don’t announce that level of product detail.

Q: Is there any high level commentary with regard to the learning experiences with launching the iPhone?
A: We’ve only been at this a few weeks. We’re very much beginners at this, so every day there’s something to learn. We’re interested in building the business to the next level.