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Notes of interest from Apple's Q3 2013 conference call

post #1 of 50
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With continued iPhone growth and a particularly strong performance from its iTunes and services businesses, Apple posted a slight increase in revenues in the June quarter, though lower margins led to a 20 percent slide in profit. Following the company's earnings release, Apple executives took part in a conference call to discuss the quarter, and notes of interest follow.

Execs


Participating in Tuesday's call were Apple Chief Executive Tim Cook and Chief Financial Officer Peter Oppenheimer.

Highlights


  • Among major hardware, Apple's only growth came from the iPhone, which saw a 20 percent jump to 31.2 million units.
  • iTunes, software and services were particularly strong in the June quarter, growing 25 percent.
  • iPad shipments had a tough comparison to Q3 2012, when Apple launched the third-generation iPad late in the preceding quarter.


Apple's iPhone business



The iPhone was Apple's only major growth product for Apple during the quarter, posting a 20 percent increase in shipments from the same period in 2012 to 31.2 million units, and setting a new record for the quarter. Increase of 5.2 million.

iPhone sell-through of about 31.8 million units.

Revenue from the iPhone was also up 15 percent year over year.

Developed and emerging markets ? US, UK, Japan, Brazil, Russia, India, Thailand ? saw strong sales.

iPhone 5 most popular so far, but solid sales for 4 and 4S.

Ended quarter with 11 million in channel inventory.

iPhone sales strong in Japan, top-selling smartphone in Japan. Apple No. 1 or No. 2 smartphone manufacturer in North America, Western Europe, Russia, Turkey, Singapore, Hong Kong.

90 percent loyalty rate among iPhone owners.

iPhone top spot in cust.sat. from JD Power, South Korea.

American Airlines, Cisco, General Electric, SAP deployed more than 20,000 iPhones across their enterprises.


Apple's iPad business



iPad shipments saw their first-ever year over year decrease, down 14 percent to 14.6 million units.

Revenues for the iPad lineup were off even more, sliding 27 percent due to the late 2012 introduction of the lower-margin iPad mini.

Exited quarter with 4.1M units of iPad channel inventory.

iPad number one in 2013 tablet satisfaction survey.

Cites Chitika study showing iPad at highest level of usage this year with 84 percent web share in North America.


Apple's Mac business



Mac shipments slid 7 percent during Apple's third fiscal quarter of 2013 to 3.8 million. Revenue wasn't hit as hard, though, easing just 1 percent.

3.8 million Macs, 7 percent decline YoY but higher sales than Apple's estimates.

Global computer market contracted 11 percent in same time, so Macs gained share.

Apple pleased with response to new MacBook Airs

Developer preview of OS X Mavericks will bring more than 200 new features.

"We're extremely pleased to have received" authorization to roll out 660,000 iPads to Los Angeles students.


Apple's iTunes and App Store businesses



Apple saw huge growth in its iTunes, software and services businesses, surging 25 percent year over year to $3.9 billion in revenue.

iTunes users have downloaded more than 1 billion tv episodes and 390 million movies from iTunes

Developers have now created more than 900K apps, including 375K for iPad

Developers have made more than $11 billion in sales, half of which in the last four quarters

More than 900 billion iMessages

Received more than 8 trillion push notifications

Apple's retail business and regional sales



Retail sales were flat year over year.

The company saw the biggest regional growth in Japan, where revenue was up 27 percent from the same quarter in 2012. Sales were also up 12 percent in the Americas, while the rest of the world saw year over year decreases.

Revenue for quarter $4.1 billion. Strong growth in iPhone sales. Most successful macBook Air launch to date.

Ended quarter with 408 stores, 156 outside the United STates.

Will open 9 new stores in next quarter.

23 more such relocations in Fiscal '13.

Retail segment income was $670 million.

15,000 visitors per store, per week.

Apple's iPod business



iPod shipments were down a dismal 32 percent year over year to 4.6 million units. The iPod number wasn't even mentioned in the text of Apple's press release ? an uncharacteristic decision.

Revenue from iPod sales was also down 31 percent year over year.

Apple's next (Q4 2013) fiscal quarter



Apple's range of guidance for its fiscal 2013 fourth quarter calls for:
  • Revenue between $34 billion and $37 billion
  • Gross margin between 36 percent and 37 percent
  • Operating expenses between $3.9 billion and $3.95 billion
  • Other income/(expense) of $200 million
  • Tax rate of 26.5 percent


Q&A Session



Why product cycle might be different: "We are on track to have a very busy fall. I would like to leave it there and go into more detail in October."

Cook: From an iPad point of view, iPad was down 700,000 units for channel inventory. We typically don't like to have more inventory than we need...

Increasing concerns on high-end smartphone growth:

Cook: From a growth point of view, we're Apple. Our growth will come from new services and products... In addition to this we have opportunities and channels... retail stores, carrier relationships.

Cook: I don't subscribe to [notion that] higher end of the smartphone market has hit its peak.

Cook on iPad: If you look year over year we had a 2.4 million unit decline, but 80 percent of that came just from changes in channel inventory... The underlying sell-through declined by just three percent.

The most recent data I've got is that the iPad web share data shows that through the quarter we accelerated further and the iPad now accounts for 84 percent of web traffic... If there are other tablets being sold, I don't know what they're being used for.

We feel really good about where we are. We had an incredible quarter in US education.

Gross Margin declines



Oppenheimer: Sequential decline in gross margin was not a surprise to us. As I said last quarter during the call, we expected gross margin to be down.

We had some puts and takes in the quarter, but we ultimately ended up in the range that we thought we would be, and at the high end.

iPhone ASP:

Oppenheimer: We were down four percent year over year in ASP, about $27. That's primarily due to the mix of products we're selling.

iPhone 4 sales accelerated as we offered more affordable options in emerging markets.

Sequentially it was down about $32, and that was driven by mix as well.

Cook: From an iPhone point of view... we saw very strong sales in some emerging markets

India up 400 percent, Turkey and Poland up over 60 percent.

We also saw very strong iPhone sales in some developed markets.

China: China was weaker in the quarter. The data sheet focuses on revenue, and it doesn't tell the complete story. If you look at sell-through, the sell-through in China was only down four percent from the year ago quarter when normalized for channel inventory.

Mainland China was up five percent year over year. That's a lower growth rate than we've been seeing, and I attribute that to many things.

The economy there clearly doesn't help us and others.

Hong Kong... we saw a more dramatic downturn there, and it's not exactly clear [why].

Trade-in program: Effect on margins, sales

Cook: We haven't announced anything relative to a trade-in program, so what you've seen is primarily rumor-oriented. The reason that it is so attractive around an iPhone is that the residual value of an iPhone stays so high. That makes the trade-in programs a win-win from many points of view. But we haven't announced anything.

I'm not opposed to it... I like the environmental aspect of it.

More Cook on China:

I think it's important to put it in perspective. In greater China, our revenues were $4.9 billion for the quarter, about 14 percent of the company. A few years ago, that would have been hundreds of millions.

In the last 12 months we've done $27 billion on a trailing basis. It's a huge business for us.

iPad sell-through in greater China was up 8 percent, in mainland China up 37 percent.

In the tablet market, latest figures indicate higher than 50 percent share in China.

We now have about half a million developers in China working on iOS apps. That's up over 70 percent year over year.

We're going to double the number of retail stores in China over the next two years.

iPad and iPhone sales are currently lower than where we want and need them to be.

I continue to believe in the arc of time that China is a huge opportunity for Apple. I don't get discouraged over a 90 day cycle that could have economic factors.

Cook: What we've seen is that the number of first-time smartphone buyers the iPhone 4 is attracting is very attractive. We saw this beginning to happen toward the end of the Q2 timeframe. We offered the more affordable pricing on a wider basis this quarter.

Where iPhone 5 continues to be the most popular iPhone product by far, we're happy to have the [iPhone 4 available to first time smartphone buyers].

There's always more weapons [than the iPhone 4]; we have more than one tool in the toolbox.

"We'll see," on new product categories. "we're working on some things we're really proud of, and we'll announce some things when we're ready."

Cook: I would classify [carrier partnerships] as being good. The press coverage I've seen with Russia probably need some color. The articles I've seen suggest that we're not selling iPhones through carriers. If you look at Russia... 80 percent of smartphone sales are through retail.

We're happy with how we're doing there.

We're continually looking for other [carrier] relationships to both add and enhance the ones we've got.

Supply chain



NAND pricing is fairly stable and is following seasonal prices as we'd expect. Expect further price reductions in LCDs.

On Growth and new products



"The way I think about it is: We're here to make great products. We think that if we focus on that and we do it very well, the [financial aspects will follow]."

"We believe that the most important thing is that the customer LOVE the products. LOVE them. If you don't start at that level, you run the risk of making something people don't want."

Back to iPhone ASP



We don't project ASP. We do give guidance, we have an assumption on ASP.

We saw significant growth in the lower price point year over year, which for us is the iPhone 4, which is still a great product. That was one of the things along with the iPhone 5 doing well that allowed us to beat many of the expectations for iPhone sales.

iOS in the Car



Cook: It is very important, it is a part of the ecosystem. Just like iTunes, the App Store are part of the ecosystem... having something in the automobile is very, very important. It's something that people want, and i think that Apple can do this in a very unique way.
post #2 of 50
11M in iPhone channel inventory... does that seem high? It's almost a month's worth.
post #3 of 50
Re: "iPad shipments saw their first-ever year over year decrease, down 14 percent to 14.6 million units."

Because iPad 3 was released in March 2012, and it was still a hot new model in CY Q2.
At the start of this CY Q2, the iPad was 6 months old and the iPad mini was 5 months old.
Newness boosts sales.

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post #4 of 50
Quote:
Originally Posted by SockRolid View Post

Re: "iPad shipments saw their first-ever year over year decrease, down 14 percent to 14.6 million units."

Because iPad 3 was released in March 2012, and it was still a hot new model in CY Q2.
At the start of this CY Q2, the iPad was 6 months old and the iPad mini was 5 months old.
Newness boosts sales.

 

Yeah, I've been recommending people to buy this fall when new ones come out. It's possible others are doing the same.

post #5 of 50
iPhone sales strong in India and Russia contrary to reports we saw here the past few weeks.

Also margins were up for the iPhone compared to last year, so that means the percentage of high end iPhone 5s has to be higher than the 52% that was speculated here the other day.

Emerging markets are buying more iPhones than ever WITHOUT a $200 handset.

If Apple came out with a $400~ priced smartphone they would literally own the competition and we could potentially see 40 million iPhone sales a quarter. We will see, but things are looking interesting for Apple going into their blockbuster fall release quarter and then the even bigger Christmas quarter.
post #6 of 50

Europe and Asia (excluding Japan) are what's dragging down Apple. Maybe that iPhone plastic will help.

post #7 of 50

"We are on track to have a very busy fall. I would like to leave it there and go into more detail in October."

 

That would Mr. Reliable Kuo's September predictions ... unreliable? Unless you want to take his word over that of Cook.

post #8 of 50
Quote:
Originally Posted by Pendergast View Post

11M in iPhone channel inventory... does that seem high? It's almost a month's worth.

That's the same as last quarter.

post #9 of 50
Quote:
Originally Posted by ankleskater View Post

That's the same as last quarter.

 

Ok, I wasn't sure. Don't have the numbers in front of me.

 

Still, isn't a month's worth of inventory... high? 

post #10 of 50
Quote:
Originally Posted by ankleskater View Post

"We are on track to have a very busy fall. I would like to leave it there and go into more detail in October."

 

That would Mr. Reliable Kuo's September predictions ... unreliable? Unless you want to take his word over that of Cook.

 

Huh?

 

Isn't he talking about going into more detail in the Q4 conference call in October?

post #11 of 50
Quote:
Originally Posted by ankleskater View Post

"We are on track to have a very busy fall. I would like to leave it there and go into more detail in October."

 

That would Mr. Reliable Kuo's September predictions ... unreliable? Unless you want to take his word over that of Cook.

 

October is in 3 months: the next conference call. And if he's "going into more detail" during the October call, that can only mean some new stuff is coming before the call. (Because he's not going to give details about future new products during a financial call.)

 

Kuo's September predictions do fall before the October call, so everything still fits. Some products we're wating for (Mac Pro) may come after that call, but Cook seems confident that some will already be on the market.

post #12 of 50
Quote:
Originally Posted by Pendergast View Post

 

Ok, I wasn't sure. Don't have the numbers in front of me.

 

Still, isn't a month's worth of inventory... high? 

 

 

Quote:
Originally Posted by ankleskater View Post

That's the same as last quarter.

This should be normal considering a new phone is coming out.  You get inventory up higher than usual, then you have a few weeks while you switch the lines over to the new phone.  It is normal business to have a month n the channel.  The difference with Apple's reporting is that you can see what was sold by taking shipped - in the channel (inventory) Others just report "shipped" and then channels stuffed with inventory.  Apple is right in line with this number.

post #13 of 50
Quote:
Originally Posted by Pendergast View Post

 

Huh?

 

Isn't he talking about going into more detail in the Q4 conference call in October?

Maybe. But then, how often does he go into product detail during an earnings conference call?


Edited by ankleskater - 7/23/13 at 3:10pm
post #14 of 50
Hong Kong... we saw a more dramatic downturn there, and it's not exactly clear [why].

It is coz hong kong people like large screen . Smaller screen looks cheap . Many people voted by buying s4 .
post #15 of 50
Quote:
Originally Posted by Pendergast View Post

11M in iPhone channel inventory... does that seem high? It's almost a month's worth.

Funny how things change.

Not that long ago, the industry was dealing with 4-6 inventory turns per year. Then Apple comes along and we're questioning why they're only turning inventory 13 times a year.
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post #16 of 50
Quote:
Originally Posted by Pendergast View Post

Still, isn't a month's worth of inventory... high? 

At this time of the cycle, probably not.
Quote:
Originally Posted by jmbarry View Post

This should be normal considering a new phone is coming out.  You get inventory up higher than usual, then you have a few weeks while you switch the lines over to the new phone.

There you go, exactly.

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post #17 of 50

With today's global communications one really should not refer to seasons or else you need to clarify which hemisphere, equinox to solstice. Tim, originally being a mid-western guy says fall when almost everyone else in the world would say autumn, however in Australia it will be spring and in the northern tropical convergence zone it will be the beginning of the dry season. Perhaps he should say the third season of the year but even that makes no sense in the equatorial regions of the planet? I don't know, I guess I just don't like the term "Fall". At least he followed up with the month of October, but it is still a little vague.

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post #18 of 50
Quote:
Originally Posted by Pendergast View Post

 

Ok, I wasn't sure. Don't have the numbers in front of me.

 

Still, isn't a month's worth of inventory... high? 

No. It's a reasonably good sign suggesting they are confident of a high sell-through rate. 

post #19 of 50
Quote:
Originally Posted by jmbarry View Post

The difference with Apple's reporting is that you can see what was sold by taking shipped - in the channel (inventory) Others just report "shipped" and then channels stuffed with inventory.  

And what happens if they can't sell the inventory "stuffed" in the channels? What did Microsoft have to do with their Surfaces?

 

Enough already with this shipped v. sold business. The ship has sailed.

 

Quote:
Originally Posted by jmbarry View Post

This should be normal considering a new phone is coming out.  You get inventory up higher than usual, then you have a few weeks while you switch the lines over to the new phone.    

 

 

Really? Then why did Apple also have 11M iPhones in the channel at the end of last quarter. Were they also ramping up inventory to prepare to switch then?

post #20 of 50
Quote:
Originally Posted by ankleskater View Post

"We are on track to have a very busy fall. I would like to leave it there and go into more detail in October."


That would Mr. Reliable Kuo's September predictions ... unreliable? Unless you want to take his word over that of Cook.
He means going into more detail on the next earnings call, which would be in October. Doesn't mean we won't see any new products until October.
post #21 of 50
I'm sure someone here is keeping track of the number of times "We have amazing products in the pipeline" has been said without said products being delivered. And product refreshes don't count.
post #22 of 50
Quote:
Originally Posted by ankleskater View Post

Maybe. But then, how often does he go into product detail during an earnings conference call?
Once products have been announced Cook and Oppenhemer will talk about them on earnings calls. For instance after the mini came out they explained/defended the $329 price tag on the quarterly earnings call.
post #23 of 50
Quote:
Originally Posted by macinthe408 View Post

I'm sure someone here is keeping track of the number of times "We have amazing products in the pipeline" has been said without said products being delivered. And product refreshes don't count.
So the new MacBook Air isn't an amazing product? Since when do you get to decide what does/doesn't count?
post #24 of 50
This is pretty simple really, some of the chips Apple needs are scheduled for September delivery from Intel. So Apple could release products in the September/October time frame allowing for comments at the October quarterly.
Quote:
Originally Posted by nagromme View Post

October is in 3 months: the next conference call. And if he's "going into more detail" during the October call, that can only mean some new stuff is coming before the call. (Because he's not going to give details about future new products during a financial call.)

Kuo's September predictions do fall before the October call, so everything still fits. Some products we're wating for (Mac Pro) may come after that call, but Cook seems confident that some will already be on the market.
Kuo's an idiot, he tries to pass off public industry knowledge as something only he knows about. It isn't worth your time to read articles generated by his press releases.
post #25 of 50
I liked Cook's comment about if you make great products that people want to buy the revenue and profits will follow. Very similar to what Jony Ive said last year. Of course I'm sure Wall Street hates that mentality since they just want Apple to copy Samsung and flood the market with product.
post #26 of 50
I haven't read those September predictions, however, in October I think Tim would only talk about what's happened in July, August and September. Not what's happening in October. And fall starts in September...
post #27 of 50
Quote:
Originally Posted by macinthe408 View Post

I'm sure someone here is keeping track of the number of times "We have amazing products in the pipeline" has been said without said products being delivered. And product refreshes don't count.

Your idea of amazing and the rest of the worlds views in what is amazing don't jive. Refresh or not laptops like the new AIR are amazing. It is a massive jump forward in usability for those on the go.
post #28 of 50
Quote:
Originally Posted by wizard69 View Post

This is pretty simple really, some of the chips Apple needs are scheduled for September delivery from Intel. So Apple could release products in the September/October time frame allowing for comments at the October quarterly.
Kuo's an idiot, he tries to pass off public industry knowledge as something only he knows about. It isn't worth your time to read articles generated by his press releases.

What press releases?

post #29 of 50
Quote:
Originally Posted by macinthe408 View Post

I'm sure someone here is keeping track of the number of times "We have amazing products in the pipeline" has been said without said products being delivered.

Zero.
Quote:
And product refreshes don't count.

Oh. Zero, then. Now shut up and go away.

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post #30 of 50
Quote:
Originally Posted by wizard69 View Post

Refresh or not laptops like the new AIR are amazing. It is a massive jump forward in usability for those on the go.

Yesterday was the first time I used my new Air in the office. I was amazed that after half a day's use (splitting time between it and my iMac) it was still at about 76% battery! It really is amazing.

What blows my mind though is how poor of a job Apple seems to be doing at letting people know about it. It is very well priced (they should have the kitchen sink unit stocked in stores though), and arguably a much better value than the Dells our office buys.
post #31 of 50
Quote:
Originally Posted by Pendergast View Post

11M in iPhone channel inventory... does that seem high? It's almost a month's worth.

That's high for summer, but about what they need for the fall and the "back to school" season.

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post #32 of 50
Quote:
Originally Posted by mstone View Post

With today's global communications one really should not refer to seasons or else you need to clarify which hemisphere, equinox to solstice. Tim, originally being a mid-western guy says fall when almost everyone else in the world would say autumn, however in Australia it will be spring and in the northern tropical convergence zone it will be the beginning of the dry season. Perhaps he should say the third season of the year but even that makes no sense in the equatorial regions of the planet? I don't know, I guess I just don't like the term "Fall". At least he followed up with the month of October, but it is still a little vague.

 

Don't be hard on yourselves, 'Fall' is a charming colloquialism, one that the rest of us are quite used to hearing/reading.

 

The consensus seems to be that this quarter could have been worse. Interesting the iTunes store success with 25% growth - people are prepared to pay for content, which is a nice reflection at least on Apple customers. :)

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post #33 of 50
Quote:
Originally Posted by aaarrrgggh View Post


Yesterday was the first time I used my new Air in the office. I was amazed that after half a day's use (splitting time between it and my iMac) it was still at about 76% battery! It really is amazing.

What blows my mind though is how poor of a job Apple seems to be doing at letting people know about it. It is very well priced (they should have the kitchen sink unit stocked in stores though), and arguably a much better value than the Dells our office buys.

 

Apple could create some great advertisements around the 'ecosystem' of iDevices and the MacBook Air (and iMac). This has not been pushed enough. Advertising the MBA would make ads for the surface with its killer feature, a 'clickable' keyboard, look downright silly. (Well, sillier!)

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post #34 of 50
Quote:
Originally Posted by ankleskater View Post

Maybe. But then, how often does he go into product detail during an earnings conference call?

 

He'd do that because he will have new product SOLD before that call. Maybe even a new category of product... 

 

Apple's saved the best for the last half of the year. Meanwhile Uncle Fester is busy skating behind the puck and Samsung is poised to do whatever Apple does next.

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post #35 of 50
Quote:
Originally Posted by Macky the Macky View Post

 

He'd do that... Meanwhile Uncle Fester is busy skating behind the puck and Samsung is poised to do whatever Apple does next.

 

Someone could start a rumour that Apple is working on an iBicycle and then watch the hilarity unfold. Samsung's would have bigger wheels and saddle, Google's would have a HUD and Microsoft, being a hardware company (sic), would have been working on one for the past decade. Apple having patents in the art (http://www.patentlyapple.com/patently-apple/2013/01/apple-granted-a-patent-for-an-intriguing-smart-bike-system.html) might validate the rumours.

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post #36 of 50
Quote:
Originally Posted by crazy_mac_lover View Post

Hong Kong... we saw a more dramatic downturn there, and it's not exactly clear [why].

It is coz hong kong people like large screen . Smaller screen looks cheap . Many people voted by buying s4 .

Why dramatic downturn ? Why people in HK like large screen?

Here are some reasons...
1. Average age in HK population is around 40-42 years old. Eyes are weaken. Reading small letters in small screen is just pain in the ass.
2. Majority of people nowadays do not make calls to extend possible unless for work.. they just text. Screen size as a phone is not longer relevant
3. Apart from the phone( now is texting) function, they use the device for watching download movies/TV programs/ comics/ newspaper and playing games...all this functions go better with a bigger screen
4. HK smartphone market is very mature. Set aside those trade current smartphone with a new one on regular basis, the growth sector lies in senior population groups (ages 50+). Many of them are new to smartphone and does not have any loyalty issue. Because of ages, they need big screen .

Last not least...hey HTC One really looks like an iPhone 6 in the appearance and feel, why still wait?


ps...I am still waiting
post #37 of 50
Quote:
Originally Posted by IQatEdo View Post

 

Apple could create some great advertisements around the 'ecosystem' of iDevices and the MacBook Air (and iMac). This has not been pushed enough. Advertising the MBA would make ads for the surface with its killer feature, a 'clickable' keyboard, look downright silly. (Well, sillier!)

Apple's advertising, overall, has been pretty mediocre lately.

post #38 of 50
Quote:
Originally Posted by Peter524 View Post

Why dramatic downturn ? Why people in HK like large screen?

Here are some reasons...
1. Average age in HK population is around 40-42 years old. Eyes are weaken. Reading small letters in small screen is just pain in the ass.
2. Majority of people nowadays do not make calls to extend possible unless for work.. they just text. Screen size as a phone is not longer relevant
3. Apart from the phone( now is texting) function, they use the device for watching download movies/TV programs/ comics/ newspaper and playing games...all this functions go better with a bigger screen
4. HK smartphone market is very mature. Set aside those trade current smartphone with a new one on regular basis, the growth sector lies in senior population groups (ages 50+). Many of them are new to smartphone and does not have any loyalty issue. Because of ages, they need big screen .

Last not least...hey HTC One really looks like an iPhone 6 in the appearance and feel, why still wait?


ps...I am still waiting

What proportion of Apple's sales is in HK?

post #39 of 50
Quote:
Originally Posted by IQatEdo View Post

Someone could start a rumour that Apple is working on an iBicycle and then watch the hilarity unfold. Samsung's would have bigger wheels and saddle, Google's would have a HUD and Microsoft, being a hardware company (sic), would have been working on one for the past decade. Apple having patents in the art (http://www.patentlyapple.com/patently-apple/2013/01/apple-granted-a-patent-for-an-intriguing-smart-bike-system.html) might validate the rumours.


Good idea.

Hey, did you hear that Apple's working on a bicycle? Built-in 4" touch screen to give you directions. Unfortunately, needs a third party map to show the bike trails, though. 1smoking.gif
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post #40 of 50
Quote:
Originally Posted by jmbarry View Post


This should be normal considering a new phone is coming out.  You get inventory up higher than usual, then you have a few weeks while you switch the lines over to the new phone.  It is normal business to have a month n the channel.  The difference with Apple's reporting is that you can see what was sold by taking shipped - in the channel (inventory) Others just report "shipped" and then channels stuffed with inventory.  Apple is right in line with this number.

Actually you would take Starting Channel Inventory + Shipments (-) Ending Channel Inventory to get a good idea of sell-through.

Since they started with 11M in channel, they sold pretty much they shipped.
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