Apple Conference Call: “Future Product Transition”

In a question related to revenue for next quarter, the response included four factors: a stronger U.S. dollar, a Mac portable transition, the educational buying season, and a “future product transition.”

The “future product” could be the new iPhone, which is expected to launch in June. As for the portables, while the MacBook Pros were just updated, the MacBook awaits a refresh, as does the MacBook Air, assuming it’s not discontinued.
Besides that enigmatic statement, there were more than a few interesting questions and answers for this call.
The iPad was a popular topic. While units sold wasn’t updated at the call, next quarter iPads will be reported as a “line item on our data summary,” meaning units sold and revenue. That’s a clear indicator of success. More concretely, the iPad 3G will ship on April 30 in the U.S., and come to nine additional countries in May. There are more than 5,000 accessories compatible with the iPad, and more than 3,500 specific apps for the iPad. Price came up more than once, which Apple considers to be “aggressive” on the iPad. Nonetheless, regarding price cuts, the reply was “nothing to announce today.”
[pullquote]It was just so awkward hearing someone praise AT&T.[/pullquote]The iPhone, which sold a record 8.572 million units, saw a 41 percent jump year-over-year, three times better than the overall smartphone market. The iPhone is seeing crazy growth in Asia Pacific, Japan, and Europe, up 484, 183, and 133 percent respectively. The iPhone in China is seeing a sales increase of nine times and revenue doubling, but that has more to do with the lackluster launch than real success so far.
In an awkwardly answered question about iPhone exclusivity, it was admitted that multiple carriers increases units sales and market share where it’s done, but that “the formula doesn’t work in every single case.” Also, AT&T (s att) has made some “big strides” in network improvement. Good grief, why not just admit AT&T pays more per phone than Verizon (s vz) ever will and be done with it. It was just so awkward hearing someone praise AT&T.
Speaking of awkward, in response to a question about whatever happened to the Apple TV, it was stated sales are up 34 percent YOY, but that’s still a “small” number that we will likely never learn. There was a little rationalizing about how the Mac and the iPhone compete in much larger markets, hundreds of millions of units sold per year, so that’s why the Apple TV remains a “hobby” for Apple. Note to Apple: 200 million televisions were sold last year.
Additional random bits:

  • Not much was said about the Mac, except that you can forget about a MacBook mini because Apple executives can’t think of “a single thing” a netbook does well.
  • As for the iPod, as noted, while sales were flat, revenue was up. That’s because the iPod touch saw 63 percent sales growth.
  • Apple still owns about 70 percent of the media player market.
  • Half of people buying Macs in Apple Stores continue to be new to the platform.
  • There are now 286 Apple Stores, which saw 47 million visitors last quarter.
  • Apple expects to open 25 Apple Stores in China, up from two, by the end of 2011.
  • Apple has $41.7 billion in cash on hand, enough to purchase Adobe twice over and put an end to Flash without the passive-aggressive behavior.
  • Apple considers the advertising initiative iAd a “toe in the water,” or possibly in Google’s eye, depending on how you look at it.
  • As always, the company is excited about the “product pipeline.”

Overall, a great quarter and a pretty good conference call. I’m looking forward to “future product transitions” for all.