MacCentral’s live coverage of Apple’s Q3 financial call with analysts has concluded. Please visit the MacCentral home page for further information related to Wednesday’s analyst call. The information below is presented in reverse chronological order, with the oldest items appearing at the bottom.
“Very satisfied” is with iPod margins, admits that it’s below other hardware margins, but said it’s “very accessible.” iPod inventory was “constrained” throughout quarter due to high demand.
Doesn’t expect to see Power Mac G5 hit previous Power Mac G4 volume levels, because pros — like everyone else — are trending towards portables. Anderson thinks the G5 is going to “rebound,” and hopes to see quarterly unit sales “north of 200,000.”
Operating margin is starting to grow for the first time in a few quarters. Hopes that trend will continue. Operating expense growth is affected by Retail Stores.
Headcount: Apple has about 1,200 full time equivalents in the Apple Retail Stores. More than 10,500 full time employees total.
G5 shipments will begin to ship in August, just as Steve said at WWDC last month.
Expects iTunes on Windows to be “trojan horse” when it comes to selling iPod to Windows users. Apple hopes that they will then consider buying a Mac when shopping for new computers.
Last quarter 42 percent of sales were to international, compared to 39 percent this quarter. Relatively weak economies in Japan and Europe contributed to that weaknesses.
Profit structure on iTunes Music Sales: “Very close to break-even” on first quarter sales. Windows version of iTunes “still on track for a launch before the end of the year.” Explanation of weak iMac sales: “Shift going on in marketplace” to portables. Noted that the iMac’s price point starts at $1,299 — said it’s capturing a reasonable marketshare in its price band.
G5 pre-order response has been “strong.”
LCD prices tightened as Apple anticipated. Upward pressure on memory prices expected because of increase in notebook and server demand.
Comments above based on analysts’s queries.
On a sequential basis, Apple expects high single-digit percentage increase in revenue, and slight increase in earnings. Sequential decline in gross margin percent due to lower operating sales and expenses associated with ramping up new products.
QuarkXPress 6 and G5 “lay foundation” for future Power Mac sales.
June quarter “impressive one” for Apple with the announcement of iTunes Music Store, new iPod, introduction of iSight, iChat AV, Panther, and the announcement of the G5.
Pacrim negatively affected by SARS, according to Anderson. US was strongest, while Europe and Japan were weaker.
Please with educational sales — unit shipments up 5 percent. Focus on mobile computing a key contributor to educational business. 60 education agents added during the quarter, selling into selective institutions.
Store revenues were $145,000,000. Average quarterly revenue per store was $2.6 million. Loss narrowed from $3 to $2 million. Traffic thru stores: 3.1 million people for the quarter. 50 percent of the customers didn’t own a Mac. Culminated with N Mich Ave store — 100,000th visitor expected tomorrow, 18 days ahead of the SoHo store for the same traffic. “High hopes” for Tokyo and San Francisco stores according.
6,500,000 songs sold on iTunes Music Store. 304,000 iPod units sold during the quarter, up quarter-to-quarter and year-to-year. Apple shipped its one millionth iPod during the quarter. Apple has generated revenue on 984,000 of those units.
Channel inventory was down sequentially and was within the target range of four to five weeks. Both iBooks and PowerBooks continue to sell well. Portable units accounted for 46 percent — a record high.
Nancy Paxton opened the call. Fred Anderson and Peter Oppenheimer will speak.