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As regards Best Buy, the two companies have a pilot going with 48 stores. In some stores there are Apple-badged employees. At this point, it’s too soon to draw any conclusions. Apple has a total of 8,000 points of distribution worldwide, plus Internet resellers.
Oppenheimer expects pricing on some flat panels to rise, as demand will once again outstrip supply due to season variations.
Closed — he thinks — six educational deals above 1,000 units and ‘about 20 or 25’ educational deals below 1,000 units. Also attributes slow sales of 12-inch iBooks to “cannibalization” attributed to 12-inch PowerBook G4 sales.
“Extremely pleased” with iPod sales results for the quarter. When asked about financial results on iTunes Music Store, said he’d defer to Steve Jobs’ presentation, happening tomorrow. “Noted particular strengths” with the dual 2GHz G5 and $1299 entry-level G4, still in the product matrix.
(In response to analyst’s questions from here upwards.)
Revenues are expected to increase to $1.9 billion sequentially. 50 basis point increase in margins to 27 percent due to stronger OS X sales. 30 million increase expected in operating expenses.
Power Mac G5, Panther, and availability of QuarkXPress and other key applications means a strong upgrade cycle from existing customers, according to Anderson.
Total fiscal year 03 capital expenditures to $163 million, most of it in retail.
26.6 percent gross margin, down primarily because of air freight costs associated with iMacs and G5s.
15 percent decline in education shipments. Widespread weakness in K-12, due in part to what Apple believes is reluctance because of financial insecurity. Apple believes “one-to-one deployment” is the future. Higher education was strongest quarter in 7 years thanks to G5 and PowerBooks.
First profitable quarter for Apple retail stores. Average quarterly revenue increased to $3.1 million per store compared to $2.6 million for June quarter. $1 million in retail segment profits. Traffic through the stores “continues to be strong on a total basis.” 4.3 million people visited the stores, compared to 3.1 million in June quarter. North Michigan Ave. store “off to an excellent start” with highest traffic of any Apple Store. Company anticipates 73 stores open by Thanksgiving. Also mentioned Tokyo, Japan store — to be opened by end of the year.
iTunes Music Store and new iPods “continue to gain momentum.” 336,000 iPod units sold, accounting for $121 million in revenue. Apple has held number one spot in MP3 players since the iTunes Music Store debuted. 8,000 storefronts and key retailers selling iPods by Christmas.
CPU sales increased seven percent. iPod, iSight cameras, AppleCare and displays contributed to the company’s results. 221,000 Power Mac units shipped. 176,000 PowerBooks shipped. 15-inch PowerBook “very well received.”
Anderson: “Very pleased with results of our fourth fiscal quarter.” Revenues up 19 percent year over year, highest in three years. 12 cents per diluted share.
Nancy Paxton opened the call.