Apple Conference Call: Maybe, Just Maybe Cheaper Macs

18 Comments

Capping the most profitable quarter ever with the most Macs sold in a quarter, the conference call to discuss Apple’s fourth fiscal quarter for 2009 may have been the most boring ever, too. However, distilling the tedium into bullet points is more interesting.

iPhone

  • Total sales for the year were 21 million, up 78 percent, average selling price around $600. There are more than 85,000 apps in the App Store, 2 billion downloads, 500 million in the last quarter.
  • The iPhone 3GS, available in 64 countries last quarter, will match the iPhone 3G with availability in 80 countries by year’s end.
  • China gets the iPhone on October 30 with approximately 1,000 points of sale to begin with. Plans will range from the equivalent of $18 to $85 per month, the phone being free at the higher end.
  • Korea will be getting the iPhone soon, and there will be multiple carriers in Canada and the UK.
    The iPhone 3GS shortage over the summer may have been the result of sales exceeding Apple’s expectations. Changing the inventory mix between the 3G and the 3GS may have caused component issues, but those were solved as of early October.
    According to Apple, “people are trying to catch up with first iPhone,” so apparently no worries about Droid, Storm2, and the Pre.
  • In some instances, the benefit of exclusive carrier agreements allows for greater levels of innovation, like visual voicemail, and in some cases exclusive carriers “invest more.” Apple execs must be using jailbroken phones on carriers besides AT&T.

Mac

  • 3.05 million Macs sold, up 440,000 YOY. For 19 out of the last 20 quarters, the Mac grew faster than the rest of the market. For the quarter, 74 percent of Macs sold were portables, up 35 percent YOY — wow.
  • Snow Leopard has twice the upgrade rate of Leopard over its first five weeks. In response to a comment about the lower price working for Snow Leopard, the reply was, “yes, it did.”
  • The Back-to-School promotion was the strongest ever for the Mac.
  • Due to demand for the new portables last quarter and Snow Leopard being launched, it wasn’t quite hinted that sales of Macs might be down for the holiday quarter.

iPod

  • The iPod controls over 70 percent of the media player market, and is gaining YOY in every country tracked.
  • 50 percent of buyers are purchasing their first iPod.
  • iPod touch sales were up 100 percent YOY — again, wow.

Finally, there were two interesting comments, the first being about the Apple Stores and Mac sales. For the first time I can recall, an Apple executive did not say “half or more than half” of Mac buyers were new to the platform. This time it was “about half.” Interpret freely.

Besides that, the most interesting comment came regarding expected margin declines. The rationale included the seasonality of greater iPod sales, fewer Snow Leopard sales than the previous quarter, higher component and other expenses, and this quote:

For the new products we have and will announce, we are delivering greater value to our customers, and these products have lower gross margins than their predecessors.

That would be in keeping with rumors about price reductions on some Macs, including the Mac mini. Start refreshing your browser window on the Apple Store tomorrow, early.

18 Comments

Jennifer johnson

Nice analysis but i guess there’s something wrong with the figures because i have read an other article about the same thing but the digits where quite different, i am kinda confused…

joejoetheidiotpet

“Sales down for the Macs.”

That is cause people are tired of paying the ridiculously high prices and are building Hackintoshes. Maybe Apple will wake up.

Louis

Sorry, but where on earth did you get that quote from? I can’t see it anywhere in the article: Mac sales were *up* on last year.

L

Costanza

A drop in switchers per store shouldn’t come as a surprise. After all, once they’ve switched and come back to buy their second or third Mac, they don’t count as switchers for those visits.

MacRat

“That would be in keeping with rumors about price reductions on some Macs, including the Mac mini.”

That’s a big leap in logic.

Especially when they also stated that component costs and freight are
costing more. More likely the Mac price will stay the same, but the margin will still be smaller due to the extra costs to Apple.

Charles Jade

I balance my poor reputation as a prognosticator with the leaked prices and the need for Apple to better compete with netbooks. By better, I do not mean a $500 MacBook mini, but a $799 or $899 MacBook. We’ll know soon.

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