Notes of interest from Apple's Q208 quarterly conference call

[AppleInsider]

Apple on Wednesday announced its most profitable second quarter in company history, and held a financial conference call with analysts and members of the media. Several notes of interest from the now concluded call follow:

Apple said second-quarter profits rose over 36 percent to $1.05 billion, or $1.16 per diluted share, on sales of $7.51 billion for the three-month period ended March 29, 2008.

Apple regional business segments

Apple Americas accounted for 884,000 Mac shipments and $3.268B in revenues. These figures are up 46 percent and 32 percent year-over-year. Sequentially, shipments are up 5 percent with revenue down 24 percent.

Apple Europe accounted for 627,000 Mac shipments and $1.78B in revenues. Both these figures are up 45 percent and 43 percent year-over-year, but down 11 percent and 28 percent sequentially.

Apple Japan accounted for 118,000 Mac shipments and $424M in revenues. These figures have increased by 49 percent each year-over-year, as well as 30 and 6 percent sequentially.

Apple's Asia Pacific (and FileMaker Inc), billed as "Other Segments," accounted for 202,000 Mac shipments and $589M in revenues. These figures are up significantly, by 67 percent and 74 percent year-over-year. Sequentially, unit shipments rose 13 percent in the Asia Pacific regions with revenue decreasing 20 percent.

Apple's "Other Music Related Products and Services" segment accounted for $XXM in revenue. The figure represents a x percent year-over-year increase and a x percent sequential lift to Apple's results.

Apple's "Peripherals and Other Hardware" added $881M in revenue, representing a 35 percent growth year-over-year and 9 percent sequentially.

Apple's "Software, Service and Other Sales" segment accounted for $529M in revenue, an upward climb of 53 percent year-over-year but a 16 percent drop sequentially.

Apple's Mac business

Apple sold 856,000 desktops during the quarter and 1,433,000 notebooks. The figures signal Mac shipment increases of 37 and 61 percent for each category year-over-year. Notebook shipments climbed sequentially by 7 percent, while desktops decreased by 12 percent from quarter to quarter.

Macs accounted for 59 percent of total revenue. At an increase of 51 percent year-over-year, this growth was more than 3.5 times the market growth rate, according to IDC forecasts; this is even higher than the 2.66 times growth Apple has enjoyed in the recent past.

Revenue in the quarter was driven primarily by the Mac.

MacBooks and MacBook Pros both saw strong sales. There was equally strong demand for the iMac, plus an increase in sales of the Mac Pro.

The MacBook Air launched successfully, and customers have responded "very well" to the ultraportable design.

Educational Mac unit growth was 35 percent, the highest of any quarter in the last eight years. The company overtook Dell last year in portable sales.

Apple is worried a little bit about institutional budgets, but with 35 percent growth in the quarter hasn't seen anything to suggest a downward trend.

There are 3 to 4 weeks of Mac channel inventory.

Mac OS X Leopard revenues were just over $40 million. While a drop from the launch quarter's $170 million, this still represents the bestselling Mac OS X release in history, according to Apple.

iLife and iWork are entering their third quarter of sales and are so on the decline.

The MacBook Air was "constrained" most of the quarter, but by the end of March was in a near-ideal supply balance.

Apple repeated its first quarter observations on the demographics of MacBook Air purchasers, saying that it appealed to college professors, students, and frequent travelers.

Cannibalization of other MacBook lines by the Air is said to be low.

Apple's Apple TV and iPhone businesses

Apple sold 1,703,000 million iPhones during the quarter and earned about $378 million.

Total deferred revenue from Apple TV and iPhone was $1.93B.

Over a third of companies in the Fortune 500, and over 400 higher education institutions, have applied for iPhone developer status.

More than 200,000 people have downloaded the SDK.

Apple beat its own internal expectations for iPhone sales during the quarter, which resulted in the ongoing shortage. Inventories in US Apple stores was particularly spotty due to large numbers of iPhones being bought with an intention to unlock and resell. The company expects this to continue and sees it as a signal of strong global demand.

Apple is working very hard to roll out the iPhone to more places in Europe and Asia during the year.

Apple's 10 million-unit iPhone sales goal for 2008 includes unlocked devices.

The iPhone 2.0 software is coming in "late June." This is the first time Apple has offered a more specific timeframe for the update.

All iPhone customers will get the 2.0 software for free, whether they bought before or after the SDK announcement.

However, revenue for all iPhones sold after March 6th (the announcement date) will be deferred until after the software ships. The company reasons that every prospective buyer is aware of the upcoming software and may be influenced in their purchases.

Guidance for shipments has factored the iPhone's supply levels into the balance.

International carriers are free to price iPhones as low as they wish, Apple says. The company however won't give more detail on which companies in the relationship absorb the price drops instituted by European carriers.

American iPhone supply was low both at retail and in the channel. Apple disagrees with assertions that it mismanaged shipments by allowing overstocks in Europe while the US runs low.

Unsurprisingly, Apple won't comment on whether it will keep a 2G iPhone alongside any future 3G model. The company won't comment on "unreleased products."

Apple's Retail business

Apple's retail stores combined to sell 458,000 Mac units and generate $1.451B in revenues during Apple's fourth fiscal quarter, representing yearly growth of 67 percent in units and 74 percent in revenue. Sequentially, the retail segment produced a 9 percent decline in units and a 15 percent decline in revenue.

53 percent of retail computer buyers are new to the Mac.

Retail operating profits doubled to $334 million.

Over 580,000 hour-long personal training sessions were delivered during the quarter.

Australia, China, and Switzerland will be receiving new Apple stores.

Apple has a total of 208 stores open, and still plans to open a total of 45 in fiscal 2008. This is up slightly from earlier forecasts.

With an average 205 stores open over the period, an average store's revenue was $7.1 million, up 48 percent year over year.

There were 33.7 million visitors total to all of Apple's stores, up 57 percent year over year.

The Best Buy project ended with a little under 400 stores hosting Apple products, with a target of 600 by the summer.

Traffic in retail stores was up 12 million people year over year.

Apple's iPod and iTunes businesses

Over 10,644,000 million iPods were shipped this quarter.

iPod channel inventory remains on track at 4-6 weeks of inventory.

According to NPD, the iPod's share of digital media players gained in almost every market for which the researchers have data, resulting in 73 percent of the US market.

The iTunes Store has 50 million customers and over 85 percent marketshare in the US, according to Nielsen.

iPod shuffle sales were down until the price cut, which triggered a resurgence.

iTunes makes up a larger proportion of Apple's business this quarter versus the last.

The financial side of Q2

Operating margins were higher than expected at 17.5 percent, mainly due to higher than anticipated revenues and gross margins.

Apple held $19.4B in cash as of quarter's end, and generated $4B in cash during the last two quarters. The company has "no comment" on what it plans to do with the cash.

Much of the gross margin decline in the quarter was due to Leopard sales falling off from a historically strong first quarter on the market, as well as a drop-off in other software sales. This was also accounted for by the iPod shuffle's price cut, and international price cuts that reflect changes in currency value.

Apple's next (Q208) fiscal quarter

Apple is targeting $7.2B in revenue, gross margins of 33 percent, and earnings per share of exactly $1.

Commodity prices on flash and DRAM hit historical lows, and should remain that way for the current quarter. The LCD market is in a supply-and-demand balance, as are most other commodities such as hard drives. These should all follow historical pricing trends, and this is all factored into management's guidance.

Apple sees a sequential increase in Mac shipments for the June quarter as the educational buying season begins. The quarter typically skews towards K-12, which often buys at lower average sales prices, while the September quarter is weighted towards higher education and higher prices.

The company declines to comment on its plans for recently acquired PA Semiconductor.

[ View this article at AppleInsider.com ]

[Cubert]

Is it just me or is the page not autorefreshing?

[Rot'nApple]

Originally Posted by AppleInsider

Over a third of companies in the Fortune 500, and over 400 higher education institutions, have applied for iPhone developer status.]

WOW!

[NasserAE]

Originally Posted by Cubert

Is it just me or is the page not autorefreshing?

Yep, it is not auto refresh. I am listening to the conference call live though on Apple.com

[Kasper]

Originally Posted by NasserAE

Yep, it is not auto refresh. I am listening to the conference call live though on Apple.com

Fixing... Sorry, was set to 600 seconds instead of 90, my bad.

K

[NasserAE]

Originally Posted by Kasper

Fixing... Sorry, was set to 600 seconds instead of 90, my bad.

K

Thank you

[mbene12]

sigh... I hate day traders.

Record quarter, beat all numbers across the board,conservative forward guidance (which they will obviously beat) HUGE products on the horizon...initial reaction:stock drops 3% in after hours trading. WTF do they have to do to get a boost outa quaterly results?!?!

They again are reporting that they are gonna hit that 10M number. Does anyone really think that they arent planning on actually selling 12M?

[minderbinder]

And reiteration of the goal of ten million sold in 2008 (again misreported by some news sources as by the end of 2008).

""We are very pleased with iPhone momentum and we remain confident of achieving our goal of selling 10 million iPhones in calendar 2008"

[shanmugam]

Over 10,644,000 million iPods were shipped this quarter.

how many billions of them?

i though we are in recession? not bad best Quarter in the history ...

[DCJ001]

Originally Posted by shanmugam

Over 10,644,000 million iPods were shipped this quarter.

how many billions of them?

i though we are in recession? not bad best Quarter in the history ...

Plus "Apple sold 1,703,000 million iPhones during the quarter."

Does that mean that they've already exceeded the 10 million iPhone goal for the year... by a large margin?

[tchwojko]

Originally Posted by mbene12

sigh... I hate day traders.

Record quarter, beat all numbers across the board,conservative forward guidance (which they will obviously beat) HUGE products on the horizon...initial reaction:stock drops 3% in after hours trading. WTF do they have to do to get a boost outa quaterly results?!?!

They again are reporting that they are gonna hit that 10M number. Does anyone really think that they arent planning on actually selling 12M?

If you're not a day trader, why do you care what happens on any single day of trading? I'm happy they had great numbers, and they continue to have a great long term future. At $160, the stock is in the ballpark of being reasonably valued by some metrics (price to earnings growth ratio is about one).

[Adjei]

So Apple is happy with how the iphone is doing but yet we have some people setting their own expectations for Apple and calling the product a failure because it didn't meet their so called expecations.

[TBaggins]

Originally Posted by DCJ001

Plus "Apple sold 1,703,000 million iPhones during the quarter."

Does that mean that they've already exceeded the 10 million iPhone goal for the year... by a large margin?

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great, since that'd be well below pace to meet Apple's own goal of 10 million sold in calendar 2008 (I'll let others argue over the 'calendar 2008' part... all I know is that it's definitely for a 12-month period of time).

3G ASAP, a solid Asian launch, and launching in more large Euro countries (Italy, Spain) are all key to Apple making their 10 million goal, in any case.


.

[minderbinder]

Originally Posted by TBaggins

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great...

But the article didn't say 1.7 million, it said 1,703,000 million. Or 1.7 trillion of them. That would be pretty good, but I suspect the article is wrong.

I'm not too worried about hitting 10M in 2008, Q1 seems to be a slow quarter plus there will be new markets and new models that will cause a big boost in sales.

[TBaggins]

Originally Posted by minderbinder

But the article didn't say 1.7 million, it said 1,703,000 million. Or 1.7 trillion of them. That would be pretty good, but I suspect the article is wrong.

I'm not too worried about hitting 10M in 2008, Q1 seems to be a slow quarter plus there will be new markets and new models that will cause a big boost in sales.

Yahoo Business confirms the 1.7 million number (but not the "1,703,000 million" one... ):

The company sold 10.6 million iPods during the quarter, one percent higher than last year, and 1.7 million iPhones.


Far as whether Apple can make their goal... I dunno. As I already said, getting the 3G model out soon is important, as is launching well in the key markets of Japan, Korea, China, Italy, and Spain. The iPhone 2.0 software, and also how much Apple can expand the appeal of the iPhone to business, is also key.

So, I dunno... I think the matter is still up in the air. Apple will have execute well down the line to make it. Realistically, the current odds I'd give them would be 50-50. Maybe slightly better.


.

[abrooks]

Originally Posted by AppleInsider

All iPhone customers will get the 2.0 software for free, whether they bought before or after the SDK announcement.

Can anyone clarify this, I'll probably go back and listen again but I was certain they said that customers who bought after March 6th WOULD be charged.

[shanmugam]

Originally Posted by TBaggins

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great, since that'd be well below pace to meet Apple's own goal of 10 million sold in calendar 2008 (I'll let others argue over the 'calendar 2008' part... all I know is that it's definitely for a 12-month period of time).

3G ASAP, a solid Asian launch, and launching in more large Euro countries (Italy, Spain) are all key to Apple making their 10 million goal, in any case.


.

he/she referring to the typo it should be 1.73 million instead of 1,703,000 million

really accountant article! too many billion and million and poster and thread starter all in TYPO mess ...

[Isomorphic]

Originally Posted by AppleInsider

Apple's "Other Music Related Products and Services" segment accounted for $XXM in revenue. The figure represents a x percent year-over-year increase and a x percent sequential lift to Apple's results.

Gotta love that X-percent growth!

And, does XXM mean 980? I can never remember my Roman subtractive notation.

[abrooks]

Originally Posted by abrooks

Can anyone clarify this, I'll probably go back and listen again but I was certain they said that customers who bought after March 6th WOULD be charged.

Kind of found my own answer from Macworld.com's transcript.

2:43 PT - DM: Piper Jaffray: And we’re back to the iPhone revenue recognition delay.

2:43 PT - DM: Opp: Delay recognition of revenue and product cost of iPhone, but will continue to expense operating expenses on advertising, engineering, period costs, etc.

2:43 PT - DM: PJ: Charging for iPhone 2.0 for those who bought before March 6th?

2:44 PT - DM: Opp says it’s free.

2:44 PT - DM: PJ: Why deferring after March 6th if everybody gets it for free?

2:44 PT - DM: Opp: Customers presuming when they bought it that they’d get it for free. Proper accounting.

Is it me or is that avoiding the question?

[mh71]

Originally Posted by abrooks

Can anyone clarify this, I'll probably go back and listen again but I was certain they said that customers who bought after March 6th WOULD be charged.

All iPhone customers get the 2.0 software upgrade for free, as they do all other software upgrades. The issue arises with iPod Touch customers, who have to pay for upgrades. This is a result of Sarbox and the different ways in which the iPhone and ipods are accounted for internally.

[TBaggins]

Originally Posted by shanmugam

he/she referring to the typo it should be 1.73 million instead of 1,703,000 million

really accountant article! too many billion and million and poster and thread starter all in TYPO mess ...

Yeah, he was tryin' to make a funny, my bad. I had already read the Yahoo Business article and mentally auto-corrected it to 1.7 million.

AI does seem to have its share of typos.


.

[solipsism]

Originally Posted by AppleInsider

Over a third of companies in the Fortune 500, and over 400 higher education institutions, have applied for iPhone developer status.

That is impressive, good news news for the future of my holdings.

[solipsism]

Originally Posted by Isomorphic

Gotta love that X-percent growth!

I was expecting X+1 percent growth.

[Adjei]

Originally Posted by TBaggins

Yahoo Business confirms the 1.7 million number (but not the "1,703,000 million" one... ):

The company sold 10.6 million iPods during the quarter, one percent higher than last year, and 1.7 million iPhones.


Far as whether Apple can make their goal... I dunno. As I already said, getting the 3G model out soon is important, as is launching well in the key markets of Japan, Korea, China, Italy, and Spain. The iPhone 2.0 software, and also how much Apple can expand the appeal of the iPhone to business, is also key.

So, I dunno... I think the matter is still up in the air. Apple will have execute well down the line to make it. Realistically, the current odds I'd give them would be 50-50. Maybe slightly better.


.

But yet again they keep on being confident of selling the amount so I'm sure they would do everything to get that amount sold, I wouldn't even be surprised if they sell more than that, which is why they seem so confident.

[Adjei]

Originally Posted by TBaggins

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great, since that'd be well below pace to meet Apple's own goal of 10 million sold in calendar 2008 (I'll let others argue over the 'calendar 2008' part... all I know is that it's definitely for a 12-month period of time).

3G ASAP, a solid Asian launch, and launching in more large Euro countries (Italy, Spain) are all key to Apple making their 10 million goal, in any case.


.

But they said in the article above, that they exceeded their own internal expectations for the iphone for the quarter, how can you determine which number of iphones is great or not, Apple is happy with how much they sold.

[MacTel]

Originally Posted by TBaggins

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great, since that'd be well below pace to meet Apple's own goal of 10 million sold in calendar 2008 (I'll let others argue over the 'calendar 2008' part... all I know is that it's definitely for a 12-month period of time).

3G ASAP, a solid Asian launch, and launching in more large Euro countries (Italy, Spain) are all key to Apple making their 10 million goal, in any case.


.

The iPhone 2.0 software will be enough to boost sales to their goal of 10 million in 2008. Corporations will start buying en masse where they once bought Blackberry devices. I love my Blackberry though.

[SpamSandwich]

Originally Posted by MacTel

The iPhone 2.0 software will be enough to boost sales to their goal of 10 million in 2008. Corporations will start buying en masse where they once bought Blackberry devices. I love my Blackberry though.

I think with a 3G iPhone, a speed increase on at&t's network... we just might make that 10 mil after all!

[solipsism]

Originally Posted by SpamSandwich

I think with a 3G iPhone, a speed increase on at&t's network... we just might make that 10 mil after all!

I still think a 3G iPhone with v2.0 and the assumed markets opening this year will lead to 10M units sold in the last 6 months of the year.

[TBaggins]

Originally Posted by Adjei

But yet again they keep on being confident of selling the amount so I'm sure they would do everything to get that amount sold, I wouldn't even be surprised if they sell more than that, which is why they seem so confident.

Uhh... when's the last time you read a press release or a statement from a company where they didn't seem confident?

It's pretty rare, and usually reserved for circumstances where a company is crashing and burning beyond a shadow of a doubt (not that Apple is). And even then, they're just being honest to avoid the appearance of being utterly clueless and out of touch.

Everybody spins, if they can.


.

[TBaggins]

Originally Posted by solipsism

I still think a 3G iPhone with v2.0 and the assumed markets opening this year will lead to 10M units sold in the last 6 months of the year.

That is really optimistic. I'll be happy if they simply make their 10M goal for the whole year.


.

[NasserAE]

Originally Posted by TBaggins

How do you infer that out of that?

In fact, Apple selling 1.7 million iPhones in Q1 isn't so great, since that'd be well below pace to meet Apple's own goal of 10 million sold in calendar 2008 (I'll let others argue over the 'calendar 2008' part... all I know is that it's definitely for a 12-month period of time).

3G ASAP, a solid Asian launch, and launching in more large Euro countries (Italy, Spain) are all key to Apple making their 10 million goal, in any case.


.

It is official, 10 Million iPhone for calender year 2008. This was clearly stated during the call.

[TenoBell]

You do have to keep it in perspective. 1.73 million is not much less than what they sold over Christmas. And isn't that bad for the quarter right after Christmas when consumer spending is expected to slow down.

The next quarter should see even lower sales. Probably around 1.3 million iPhones sold. That would leave two quarters to sell about 7 million phones. Apple must really have something good waiting.

The iPhone 2.0, 200,000 potential apps, and deals with more countries. The iPhone will need to sell nearly twice per quarter what it currently sells.

[solipsism]

Originally Posted by TenoBell

You do have to keep it in perspective. 1.73 million is not much less than what they sold over Christmas. And isn't that bad for the quarter right after Christmas when consumer spending is expected to slow down.

The next quarter should see even lower sales. Probably around 1.3 million iPhones sold. That would leave two quarters to sell about 7 million phones. Apple must really have something good waiting.

The iPhone 2.0, 200,000 potential apps, and deals with more countries. The iPhone will need to sell nearly twice per quarter what it currently sells.

I think they will sell more than 1.7M iPhones this quarter. I think their will be a surge of sales after v2.0 is released, bu tI think the real surge will come from the 3G version being released the same day. I'm going for a Friday at 5pm release which will give a solid weekend of sales which may be another stand inline event not too off from the first iPhone launch.

I also expect to see AT&T subscribers to increase. Besides those waiting for a 3G iPhone I suspect there is another market for those who will be happy with the EDGE version so long as it costs less than the current $400 pricepoint.

[TBaggins]

Originally Posted by TenoBell

You do have to keep it in perspective. 1.73 million is not much less than what they sold over Christmas. And isn't that bad for the quarter right after Christmas when consumer spending is expected to slow down.

The next quarter should see even lower sales. Probably around 1.3 million iPhones sold. That would leave two quarters to sell about 7 million phones. Apple must really have something good waiting.

The iPhone 2.0, 200,000 potential apps, and deals with more countries. The iPhone will need to sell nearly twice per quarter what it currently sells.

Yeah, you see what I'm talking about... Apple's really going to have to pick up the pace a lot to make their goal.

I'm with Solip on this one... Apple releases the 3G iPhone on Friday, June 27, in a repeat of what they did last year. It helps with the Q2 numbers, for one thing, 'cept this time, you get a stampede of customers in the US and Europe. Double the fun.

And not only the Euro nations they've already launched in, but also two big countries new to the iPhone that will apparently launch with the 3G model... Italy (which is more heavily 3G than the rest of Europe, so that makes sense), and Spain (not sure what the hold up was there).

Heck, Asia even might be in on the game at end of Q2, though Apple's continuing problems securing a deal in China probably scuttles a simultaneous Japan/Korea/China launch. Maybe it'll be staggered over there, like Europe. But if even one of the 'Big Three' Asian cellphone nations gets to launch by end of Q2, that'll help the numbers too. Not to mention India, at some point.

So perhaps iPhone Q2 sales won't be as abysmal as the 1.3 million you suggest, even with the US recession deepening. We can hope.

Thing is, decent Q2 numbers just steal from Q3, leaving the goal as difficult to reach as ever. Something fundamental has to change to pull the demand curve up, and to me, that means 3G (plus the other major features Apple left out, and/or the 2.0 software update), aggressive pricing in ALL major markets, and making the iPhone a legitimate contender against the Blackberry in the biz market. That plus finally officially being in all major markets... unlockers/gray market only goes so far, regardless the crazy numbers some are speculating.

It'll all come, but will it all come in time? Tune in next quarter to the continuing soap opera...







.

[TenoBell]

I'm with Solip on this one... Apple releases the 3G iPhone on Friday, June 27, in a repeat of what they did last year. It helps with the Q2 numbers, for one thing, 'cept this time, you get a stampede of customers in the US and Europe. Double the fun. So perhaps iPhone Q2 sales won't be as abysmal as the 1.3 million you suggest, even with the US recession deepening. We can hope.

Yeah I forgot Apple released the iPhone on the last day of the quarter last year. I agree that should pretty much save that quarters sales this year. Without that April - June wouldn't look too good.

Thing is, decent Q2 numbers just steal from Q3, leaving the goal as difficult to reach as ever.

There may be a significant number of people like myself who will sell the old phone and buy the new one.

Something fundamental has to change to pull the demand curve up, and to me, that means 3G (plus the other major features Apple left out, and/or the 2.0 software update)

I would say the quality of the apps are what will drive iPhone demand in the consumer and enterprise space. The apps that Apple ship with the phone, the 200,000 potential developers, and the thousands of web apps. By June their will likely be over 300,000 developers. Those are what will be most important. 3G is just an enabler, a data conduit for the apps.

[David Stevenson]

The numbers I find astonishing are the retail figures, revenue up 74% and visitors up 57%, and they said in the call that this was in both the (recession beleagured) USA as well as international. All of thiks can't be due to trafficking in unlocked iPhones. So much for the pundits who say people won't buy "luxury" goods in a recession.

[solipsism]

Originally Posted by David Stevenson

So much for the pundits who say people won't buy "luxury" goods in a recession.

The pundits may be partially right. People are probably holding back on buying as many luxury items and/or going for cheaper luxury items. At only $400 the iPhone is very inexpensive status symbol and luxury item. Plus, the usefulness of the item far outweighs its "ornament-ness" making it a more justifiable purchase.

Just a theory

[NasserAE]

Originally Posted by David Stevenson

The numbers I find astonishing are the retail figures, revenue up 74% and visitors up 57%, and they said in the call that this was in both the (recession beleagured) USA as well as international. All of thiks can't be due to trafficking in unlocked iPhones. So much for the pundits who say people won't buy "luxury" goods in a recession.

I said three months ago that there is nothing wrong with the economy. Just because the financial sector screwed up doesn't mean that everyone else did. The problem was people did panic and analyst did their job very well making sure that they continue to panic. I also said that earnings will be strong for Apple and other innovative corporations. Some poster started bashing me arguing that unemployment is higher than before and people cannot afford to pay their mortgages. The real problem will face retailers and manufacturers who never move forward and introduce new and innovative products. When I go shopping I get bored really quick, most retailers have goods more than a year old, nothing new. People have money to spend, but they don't want to spend it on old junk.