Apple third-quarter earnings call live blog | CNET

Apple third-quarter earnings call live blog

Join CNET for live coverage of Apple's third fiscal quarter conference call.

  • Roger Cheng 7/24/2012 9:30:51 PM
    Q: Talk about the Mac business, which was up 2% year over year. Talk about what you're seeing in terms of slower growth. Thoughts on cannibalization by the iPad?
  • Roger Cheng 7/24/2012 9:31:11 PM
    Cook: We believe the primary factor for our lower growth rate is the timing of our portable announcement within the quarter.
  • Roger Cheng 7/24/2012 9:31:40 PM
    Cook: The portable lineup was introduced and well received. A year ago, we made a transition in portable area in February, so we got the benefit of an entire quarter of new devices.
  • Roger Cheng 7/24/2012 9:31:59 PM
    Cook: After the developer's conference, Mac sales rose year over year because of the refresh.
  • Roger Cheng 7/24/2012 9:32:22 PM
    Cook: MacBook Pro with Retina was incredibly well received. Ended the quarter with backlog.
  • Roger Cheng 7/24/2012 9:32:34 PM
    Cook: We haven't caught up to demand, but expect to do so by next month.
  • Roger Cheng 7/24/2012 9:33:02 PM
    Cook: I would attribute a large amount to what has happened in terms of timing of new MacBook announcements.
  • Roger Cheng 7/24/2012 9:33:17 PM
    Follow-up question: Talk about discussion with carriers regarding subsidies.
  • Roger Cheng 7/24/2012 9:33:33 PM
    Cook: Chuckles as he dodges another "product transition" question.
  • Josh Lowensohn 7/24/2012 9:33:59 PM
    Today I learned you can hear eye rolls through the telephone.
  • Roger Cheng 7/24/2012 9:34:15 PM
    Cook on subsidies and carriers: Our role is to make the very best smartphone in the world. At the end of the day, the carriers want to provide their customers with what they want to buy. The most important thing to do is to create the best smartphone in the world.
  • Roger Cheng 7/24/2012 9:34:35 PM
    Cook: Important to note that the subsidy they pay is small relative to the revenue they collect over the life of a contract.
  • Roger Cheng 7/24/2012 9:35:04 PM
    Cook: iPhone contributes to lower customer turnover rate. Carriers are now focusing on shared data plan. An iPhone customer is more likely to have a tablet. Carriers really value these customers.
  • Roger Cheng 7/24/2012 9:35:34 PM
    Cook: We're the most efficient smartphone in a market for an app-rich environment.
  • Josh Lowensohn 7/24/2012 9:36:17 PM
    Q: Bernstein asks about being above expectation on guidance on iPhone, yet EPS came in above guidance, so where were you disappointed relative to your guidance?
  • Josh Lowensohn 7/24/2012 9:36:50 PM
    A: Oppenheimer -- wherever we came in, we were happy with our quarter. Sales came in ahead of where the guidance was, and we had $6.5B YoY revenue growth.
  • Josh Lowensohn 7/24/2012 9:37:34 PM
    A: BUT, Europe isn't doing well. Also, Australia, Brazil and Canada didn't do too hot with natural resources. Also, rumors of new iPhones, as well as rumors of Intel's Ivy Bridge processors ahead of WWDC.
  • Josh Lowensohn 7/24/2012 9:38:40 PM
    And after the products came out, people started buying those -- including the new MacBook Pro. Also, the new iPad and new MacBook portables in China pending regulatory approval. Last but not least, the dollar's position around the world.
  • Josh Lowensohn 7/24/2012 9:39:17 PM
    Follow up: $200-$300 smartphones in emerging markets. At what point does that math keep you from gaining share?
  • Josh Lowensohn 7/24/2012 9:39:58 PM
    A: (Cook), the 70 percent (of smartphones) you mentioned doesn't map to what I've seen. But about China, we've been specific on it because we see it as an enormous opportunity. I'm pleased we were able to grow iPhone sales there over 100% in the quarter.
  • Josh Lowensohn 7/24/2012 9:40:25 PM
    Cook: I believe people in emerging markets want good products like they do in developing markets. We're going to stick with our (knitting?) and make the best products.
  • Josh Lowensohn 7/24/2012 9:40:48 PM
    Follow up Q: Is that an objective in the iPhone's global business?
  • Josh Lowensohn 7/24/2012 9:41:09 PM
    Cook: Our goal in everything we make is to make the very best product, and with that we'll have a good business and our results today show that.
  • Josh Lowensohn 7/24/2012 9:42:10 PM
    Q on channel inventory and sellthrough expectations of Apple's products.
  • Roger Cheng 7/24/2012 9:42:28 PM
    Cook: Channel inventory is for the indirect channel. It's not used to support for Apple stores, education and online sales.
  • Roger Cheng 7/24/2012 9:43:24 PM
    Cook: We repriced the iPad 2 to $399 and it did very well. It was particularly key in the K-12 area, where we sold 1M units in the quarter.
  • Roger Cheng 7/24/2012 9:43:37 PM
    We have been very aggressive in this phase, and I won't be changing it.
  • Roger Cheng 7/24/2012 9:44:01 PM
    Cook: In terms of competition, we've seen hundreds of tablets come to market. I have yet to see any of them gain any level of traction. Touts the number of apps on the iPad.
  • Roger Cheng 7/24/2012 9:44:17 PM
    Cook: Most customers feel they aren't looking for a tablet, they're looking for an iPad.
  • Roger Cheng 7/24/2012 9:44:33 PM
    It's the classic tissue vs. Kleenex model!
  • Josh Lowensohn 7/24/2012 9:44:57 PM
    One thing to point out on these YoY iPad sales: Apple really could not keep up with demand with the iPad 2 launch. Took months to get one
  • Roger Cheng 7/24/2012 9:45:04 PM
    We feel really good about our momentum in the iPad space, Cook says.
  • Josh Lowensohn 7/24/2012 9:45:29 PM
    Q: Piper Jaffray asks Cook to talk more about segments driving sales.
  • Josh Lowensohn 7/24/2012 9:46:07 PM
    A Cook: We're seeing triple digit growth rates in many different geographies. Generally speaking the intl markets in the aggregate are in the triple digits. The U.S. was on a faster adoption curve with the iPad.
  • Josh Lowensohn 7/24/2012 9:46:35 PM
    Cook: Latin America is tripling. We're seeing growth out of countries that are bordering on being shocking. We would not have dreamed selling more than 17M.
  • Josh Lowensohn 7/24/2012 9:46:44 PM
    Q: What about Apple TV?
  • Josh Lowensohn 7/24/2012 9:47:25 PM
    Cook: We sold 1.3M last quarter. It brings our fiscal year up to 4M units. We continue to pull the strings to see where it takes us. We're not one to keep around projects we don't believe in. We continue to invest in it and see where it will keep us.
  • Josh Lowensohn 7/24/2012 9:47:37 PM
    Q: So you don't do it as a hobby, you do it b/c you think it will be something bigger.
  • Josh Lowensohn 7/24/2012 9:47:56 PM
    A: Cook: Yes. we do it because we think it will lead us somewher.
  • Josh Lowensohn 7/24/2012 9:48:10 PM
    Cook: 4M is not a small number. Maybe compared to iPads and iPhones, but not small.
  • Roger Cheng 7/24/2012 9:48:21 PM
    Q: iPad and iPhone average sales price seemed to decline. Was that a function of the product portfolio, or Apple testing price elacity.
  • Roger Cheng 7/24/2012 9:48:55 PM
    Oppenheimer: The iPhone ASPs were down because of a higher mix of lower end iPhones and stronger doller.
  • Roger Cheng 7/24/2012 9:49:15 PM
    All of the new product rumors, economic conditions in Europe, and change in inventory that influenced average selling price.
  • Roger Cheng 7/24/2012 9:49:51 PM
    iPad ASP decrease came from a higher mix of lower-priced models, and discounted iPad 2, and a higher mix of indirect sales, and the effect of stronger dollar, Oppenheimer says.
  • Josh Lowensohn 7/24/2012 9:49:55 PM
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