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Apple's Cook talks quarterly earnings, new products

MacWorld Staff | April 24, 2013
Apple announced second-quarter earnings Tuesday, and CEO Tim Cook had plenty to say during the company's conference call with Wall Street analysts.

We will continue to focus on the long term, and we remain very optimistic about our future. We're participating in large and growing markets. We see great opportunities in front of us, particularly given the long-term prospects of the smartphone and tablet markets, the strength of our incredible ecosystem which we plan to continue to augment with services, our plans for expanded distribution, and the potential of exciting new product categories.

Take the smartphone market, for example.IDC estimates that the smartphone market will double between 2012 and 2016 to an incredible 1.4 billion units annually. And Gartner estimates that the tablet market is growing at an even faster rate, from 125 million units in 2012 to a projected 375 million by 2016.

Our teams are hard at work on some amazing new hardware, software, and services that we can't wait to introduce this fall and throughout 2014. We continue to be very confident in our future product plans. Apple has many distinct and unique advantages as the only company [in] the industry with world-class skills in hardware, software, and services. We have the strongest ecosystem in the industry, with App Stores in 155 countries, iTunes Music Stores in 119 countries, hundreds of millions of iCloud users around the world, and most importantly, the highest loyalty and customer satisfaction rates in the business.

And, of course, we have a tremendous culture of innovation with a relentless focus on making the world's best products that change people's lives. This is the same culture and company that brought the world the iPhone and the iPad, and we've got a lot more surprises in the works.

On China

Apple's Tim Cook (center) pays a visit to China, an increasingly important market for Apple.

We actually had our best quarter ever in Greater China; it was a record for us. The revenue came in at $8.8 billion: That includes retail stores that are in that region. That's up 11 percent year on year-again, that includes retail stores that are in that region-which is the same as Apple is growing. The highlights for the quarter in China were that iPads grew 138 percent year on year, and we set new records for sell-through for iPhone and iPad during the quarter. There were some significant year-over-year timing differences with regards to channel inventory, relative to iPhone, that affected the compare year-over-year.

In particular, in the year-ago quarter, we increased iPhone channel inventory globally by 2.6 billion, as you probably recall. 1.6 of the 2.6 occurred in Greater China to support the launches that were in the March quarter last year. And so if you look at revenue on a sell-through basis, greater China revenue was actually up approximately 18 percent. And so it's a bit better than it first looks. As I said, in the year-ago quarter, we launched the iPhone 4S with China Unicom in January, and we launched China Telecom in March; this year, iPhone 5 launched in December. And so it's a very-very different set of dynamics in a year-on-year basis.


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