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Apple Conference Call: Tablet-free Edition

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Well, it was almost free of the tablet. On yesterday’s quarterly earnings conference call, when asked about a new product that might have the impact of the Mac, iPod or iPhone, the response from Apple was that it “wouldn’t want to take away your joy of surprise at our latest creation.” How thoughtful.

Regarding the company itself, the big news was that Apple adopted the new accounting standards. Besides ruining my charts, this means subscription accounting deferred and recognized over 24 months is now up front. Which could mean an end to fees for iPod touch owners upgrading iPhone OS, but probably not, and not much for everyone else. What matters is how Apple products are selling. Sales of the Mac and the iPhone are way up, while sales of the iPod are down a little.


According to Cupertino, 3.362 million Macs were sold last quarter, a new record, and one that works out to a 33 percent year-over-year gain and nearly double the 17 percent growth rate of PCs. The new iMac led the way with a 70 percent increase in sales over the same time last year. Unfortunately, Mac Pro sales seem to be suffering. Apple sees the Mac Pro as an “economically challenged area” at present, and the company is “hoping” for, but not projecting, improvement.


As for the iPhone, 8.737 million units were sold, also a new record. AT&T is a “great partner,” Apple said, and offers a “great experience” for the majority of customers, which apparently does not include me. Regarding the App Store, it’s a great success, and the approval process is fine, too. Some 90 percent of apps are approved in two weeks, and the “noise is higher than the reality” about problems. China is the focus of a lot of attention for Apple and the iPhone, with 200,000 units activated as of this year. It’s about “building brand” right now.


The bad news is that the “traditional” iPod is in decline. Overall, iPod sales were down 8 percent year over year, to 20.97 million last quarter vs. 22.72 million a year ago. The good news — great, really — is that non-traditional iPod touch sales were up 55 percent year over year. That means the iPod touch and iPhone are probably selling in about equal numbers.

A few additional notes of interest:

  • Nearly 700,000 Macs were sold in 283 Apple Stores and about half of the buyers “never owned a Mac before.”
  • Apple has $39.8 billion in cash, up nearly $6 billion from last quarter.
  • Regarding that cash, Apple usually never comments on why it holds so much. Today, it was said that “nothing is forever.” Crazy Nintendo buyout rumor, anyone?
  • Mac sales for the quarter saw 40 percent growth in Italy, France and Spain, and 100 percent in China
  • “No comment” on the Nokia (s nok) legal battle.

Finally, as Apple execs said several times, “stay tuned” until Wednesday for the latest “creation,” which will be covered by TheAppleBlog, too.

6 Responses to “Apple Conference Call: Tablet-free Edition”

  1. Logically, if Apple wasn’t lying about why it was charging for OS upgrades for iPod Touch users, this shouldn’t be the end for such charges for Touch users, but the beginning of such charges for iPhone users.