Notes of interest from Apple's Q4 2013 conference call

Posted:
in AAPL Investors edited January 2014
Apple again beat Wall Street expectations when it posted its fourth-quarter results on Monday, thanks to sales of 33.8 million iPhones during the September frame. 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, Chief Financial Officer Peter Oppenheimer, and Corporate Comptroller Luca Maestri. Cook started off the call by declaring "Apple's business is stronger than ever."

Highlights

  • Apple earned $171 billion in revenue in its fiscal year 2013
  • Apple completed 15 strategic acquisitions in the last year.
  • On cash returns to investors: Cook said Apple plans to be "thoughtful and deliberate."
  • Cook teased that Apple sees growth opportunities in current markets as well as new ones.
  • iPad reportedly accounted for a whopping 90% of tablet activations last quarter, according to Apple
  • Apple ended the quarter with $148.6 billion in cash, $35.5 billion of it held domestically
  • $2.8B in dividends were paid in the quarter, and 47M shares have been retired through buybacks

Apple's iPhone business

33.8 million iPhones sold in the September quarter - a new record

Of those planning to buy a smartphone in the next few weeks, 63% said they would choose iPhone

Changewave shows a 96% satisfaction rate for iPhone

Over 14,000 employees at Johnson Controls are using iPhones for work.

iPhone users spend 53% more time on their device than other smartphone users

AVIC in China is equipping employees with iPhones

Cook said there is some price elasticity in foreign markets, and he hopes Apple's low-end iPhone 4S will grow sales in those regions

Apple sees the iPhone 4S as its entry offer and a way to enter the ecosystem. Cook said there is "elasticity in that market," and his company plans to "move accordingly."

Apple has been steadily ramping iPhone 5s production since launch

The company plans to reach 100 countries by the end of the calendar year

Apple's iPad business

Sales exceeded Apple's expectations in the quarter, Oppenheimer said

Year over year sales growth in Japan, Russia and the Middle East. Apple also saw strong back-to-school demand in the U.S. and Canada.

iPad reportedly accounted for a whopping 90% of tablet activations, according to Apple

Apple pushed the use of iOS and the iPad in businesses

Sales of iPads to K-12 schools in U.K. have more than doubled year over year

In the U.S., "large iPad initiatives" have been rolled out. Coachella County School District and a South Carolina district were both singled out by Oppenheimer.

iBooks textbooks are now available across the U.S., U.K. and Australia national curricula

Apple isn't focused on unit share, though the company sees the overall tablet market as "huge." Cook is "confident" Apple will grow its sales year over year.

"I think it's going to be an iPad Christmas," Cook said.

Apple has a 94% share of tablets in education, a number Cook said is "unheard of"

iPad mini with Retina display will ship later in November. "It's unclear whether we will have enough for the quarter or not. We know how many we will have, but you really don't know the demand until you start shipping."

Apple's Mac business

Though sales were down 7% during the quarter, the overall PC market was down 10%, suggesting Apple continues to gain share

Oppenheimer touted Apple's recent Mac upgrades, including last week's new MacBook Pros

Making Mavericks and future OS X releases free is "just another reason that everyone should buy a Mac," Cook said

Apple's iTunes and App Store businesses

iTunes software and services reached $4.4 billion in the quarter, a 22% year over year increase.

$13 billion has now been paid to developers, half of that in the last year alone

Apple's retail business and regional sales

Apple retail sales revenue was $4.5 billion in the quarter, up 6 % year over year

The company completed remodelings of two stores, and opened 8 new ones

More stores in the U.S. and overseas will be opened and remodeled in 2014, Oppenheimer said

With an average of 411 stores in the quarter, average revenue was $10.9 million per store.

99 million visitors were hosted in the quarter

For the full year, the greater China region generated over $27 billion

Apple's next (Q1 2014) fiscal quarter

Apple expects revenue to be between $55 billion and $58 billion

Gross margins are expected to be between 36.5 percent and 37.5 percent

Operating expenses are projected to be between $4.4 billion and $4.5 billion

Apple expects the tax rate to be about 26.5 percent for the holiday quarter
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Comments

  • Reply 1 of 36
    I wish Steve would come back
  • Reply 2 of 36
    jason98jason98 Posts: 763member
    Not sure I get this part "iPad reportedly accounted for a whopping 90% of tablet activations, according to Apple"

    Are there any other Apple tablets besides iPad? Or is it a share of iPad among tablets of all vendors?
  • Reply 3 of 36
    FTA: Of those planning to buy an iPhone in the next few weeks, 63% said they would choose iPhone

    So what are the other 37 percent of folks planning to buy an iPhone going to buy other than an iPhone?
  • Reply 4 of 36
    Quote:

    Originally Posted by gotApple View Post



    I wish Steve would come back

     

    Oh, FFS.

  • Reply 5 of 36
    jungmarkjungmark Posts: 6,687member
    gotapple wrote: »
    I wish Steve would come back

    Not sure if trolling.

    Is today Monday or Tuesday?
  • Reply 6 of 36
    Quote:

    Originally Posted by jungmark View Post





    Not sure if trolling.



    Is today Monday or Tuesday?

     

    Yes. :p

  • Reply 7 of 36
    MacProMacPro Posts: 18,215member
    CNN (not PED)

    "Slumping profit margins continue to take a bite out of Apple.'

    What a surprise!
  • Reply 8 of 36
    "Of those planning to buy an iPhone in the next few weeks, 63% said they would choose iPhone"

    ...... interesting
  • Reply 9 of 36
    Imagine if Apple really rolled out a low margin iphone 5c as most non experts demand and directed? The BRICs people prefer brand name and luxury goods rather than junks. That will be a say 20% margin guidance? I will sell Apple right away...Apple do know the market better than most analysts and journalist. With all the new product refreshes, (in tooling, displays, the data centers..) what's the big deal? What you see and hear are all the hot headed opinions. Journalist alway tried to find reasons to support anything and jump to a conclusion.
  • Reply 10 of 36
    FTA: Of those planning to buy an iPhone in the next few weeks, 63% said they would choose iPhone

    So what are the other 37 percent of folks planning to buy an iPhone going to buy other than an iPhone?

    The survey has a 37.5% margin of error.
  • Reply 11 of 36
    jakeawhite wrote: »
    "Of those planning to buy an iPhone in the next few weeks, 63% said they would choose iPhone"

    ...... interesting

    Classic AppleInsider-ism. They probably meant to type something else.
  • Reply 12 of 36
    quadra 610quadra 610 Posts: 6,743member
    Quote:

    Originally Posted by digitalclips View Post



    CNN (not PED)



    "Slumping profit margins continue to take a bite out of Apple.'



    What a surprise!

     

     

    http://money.cnn.com/2013/10/28/technology/apple-earnings/index.html

     

    Yup.

     

    They *did* report the *actual* story, but it's BURIED, and plays second fiddle to the sensationalist headline and lead-in that has little to do with the actual story. 

     

    It's almost with a sense of palpable reluctance that CNN (and probably others) admit that Apple beat estimates and yet again sold an obscene amount of gear.

  • Reply 13 of 36
    gotapple wrote: »
    I wish Steve would come back

    It doesn't work that way. He's not the Dalai Lama.
  • Reply 14 of 36
    rogifanrogifan Posts: 10,669member
    I was following the call on thestreet.com and they had a poll up asking if you would be buying the new iPad. 77% said yes.
  • Reply 15 of 36
    MacProMacPro Posts: 18,215member
    quadra 610 wrote: »

    http://money.cnn.com/2013/10/28/technology/apple-earnings/index.html

    Yup.

    They *did* report the *actual* story, but it's BURIED, and plays second fiddle to the sensationalist headline and lead-in that has little to do with the actual story. 

    It's almost with a sense of palpable reluctance that CNN (and probably others) admit that Apple beat estimates and yet again sold an obscene amount of gear.

    Can you imagine the headline if Apple had an iWatch with a 30% return rate by disgusted buyers like Scamsung has? :no:
  • Reply 16 of 36

    A great quarter but Q1 2014 will be a monster with the newly released iPads, the 5S and the 5C including the added market of China. Biggest problem will be (as always) keeping up with demand. Q2 2014 will be the iWatch and it should keep the momentum going. Then the 4.7" iPhone 6 next September and it will go gangbusters all over again. Overall, 2014 will be a great year for Apple.

  • Reply 17 of 36
    MacProMacPro Posts: 18,215member
    rogifan wrote: »
    I was following the call on thestreet.com and they had a poll up asking if you would be buying the new iPad. 77% said yes.

    News headline for that ... " 33% of people polled said they don't want a new iPad."
  • Reply 18 of 36
    lkrupplkrupp Posts: 7,060member
    Quote:

    Originally Posted by Suddenly Newton View Post





    It doesn't work that way. He's not the Dalai Lama.

     

    Quote:

    Originally Posted by SpamSandwich View Post

     

     

    Yes. :p


     

    Quote:

    Originally Posted by SpamSandwich View Post

     

     

    Oh, FFS.


     

    Was it really necessary to respond to this complete loser?

  • Reply 19 of 36
    MacProMacPro Posts: 18,215member
    It doesn't work that way. He's not the Dalai Lama.

    And even if he was he wouldn't come back as Steve ... somewhere out there is a little boy with big ideas ...
  • Reply 20 of 36
    MacProMacPro Posts: 18,215member
    lkrupp wrote: »


    Was it really necessary to respond to this complete loser?

    Savage amusement? (No not the Scorpions!)
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