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CompUSA “Store within a store” sales increased. Sales in Japan are improving thanks to embedded Apple employees at Japanese resellers, too.
On reseller authorizations: Apple has signed with all of its significant channel partners. Company would not comment if it had modified authorizations for specific resellers.
Online revenue at 46 percent for quarter, up from 41 percent.
Retail: “We continue to add stores and continue to do well with our retail store division.” “Store nights” on Tuesdays and Wednesdays are successful. The events invite K-12 school districts and parents to observe achievements of students and teachers using Mac technology.
Expecting a “tough quarter” on a year over year basis for June because of “the tough market conditions” particular to education.
Pricing on flat panels “tightened” towards end of quarter. Pricing has stayed flat and trended up a little bit. “Significant elasticity of demand” in displays as pricing dropped.
In response to analyst asking about weak Power Mac sales: Power Mac G4 problems are related to “market weakness,” based on independent research. Apple has to look for an upturn to the economy to help. It would “certainly help” to get QuarkXPress native on OS X. “As the performance improves in our Power Mac line, the convergences of those factors should drive an upgrade cycle and we think the pent-up demand is there.”
Believes investment in R&D and Apple’s retail initiative will fuel future growth for the company.
Guidance for June quarter: Revenues will be approximately flat with the March quarter, with operating expenses and gross margins to be flat. Other income and expense to decline significantly to $15 million. Apple expects slight profit for June quarter.
Cash up $64 million sequentially to $4.562 billion dollars, $189 million up for the year. Pleased with working capital management.
Gross margin was up to 28.3 percent thanks to lower component costs, strong portable sales and direct sales.
Educational sales down 14 percent. Portables “remain a bright spot” with 39 percent of shipments to the educational market comprised of laptops. “X for teachers” has put over 400,000 copies of Mac OS X in teachers’ hands.
Apple retail stores — “great quarter.” $135 million in revenue for the quarter. Average revenue of $2.6 million per store, flat with year ago quarter. $3 million loss for the segment. Traffic records indicate that 3 million people visited the stores in the quarter. More than half don’t own a Mac. 70 stores open by end of calendar year. Third large format store — Michigan Ave in Chicago — will open.
Power Macs — 156,000 units, down 26 percent from year ago quarter. Creative segment hit by bad economy, said Anderson.
82,000 units of 12 inch PowerBooks sold. 70,000 15 inch PowerBooks sold. 14,000 17 inch units shipped, with a “substantial backlog” at the end of quarter.
256,000 iMacs shipped. 41,000 CRT, 86,000 eMacs, 129,000 flat panels. iBook sales were down thanks to 12 inch PowerBooks. 166,000 PowerBooks shipped — strong demand for all three models.
42 percent of units shipped were portables — a new record. Unit shipments were down 13 percent overall. Revenue per system jumped thanks to “beyond the box” purchases — iLife, Keynote and Final Cut Express, in particular.
Fred Anderson: Apple generated $1.475 billion in revenue. $14 million in profit. $3 million pre-tax charge involving restructuring included.