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Apple executives speak: On toaster-fridges, financial guidance, and lawsuits

Macworld staff | April 25, 2012
Here are some highlights of what Cook and Oppenheimer had to say to analysts during Tuesday's conference call.

From the carrier's perspective, I think it's important to remember that the subsidy is not large relative to the sum of the monthly payments across a 24 month contract period. Any delta between iPhone and maybe another phone is an even smaller level of difference. The iPhone has some distinct advantages for the carriers over competing smartphones.

For example, many of the carrier executives have told me that returns from iPhone customers is the lowest of any phone they sell in their whole... in all of the phones they carry. That has a significant direct financial benefit to the carrier.

Also, our engineering teams work extremely hard to be efficient with data, and differently than some others, and we believe that as a result of this, that iPhone has far better data efficiency compared to other smartphones that are using an app-rich ecosystem.

Finally, we think that--and this is most important--iPhone is the best smartphone in the planet to entice a customer who is currently using a traditional mobile phone to upgrade to a smartphone. This is by far the largest opportunity for Apple, for our carrier partners, and is a great fantastic experience for the customer. So there's a win-win-win there.

I think that all of these factors are--some of these factors are missed in this general discussion on subsidies.

Spain carriers vs the world

Cook: Spain has been weak for us, and probably more broadly for many companies. Our revenues grew in Spain last quarter but materially less than we grew in Europe or worldwide. However, that wasn't cause-and-effect related to the issue you're on, Spain is just in a terrible economic situation and so I look at that as an unusual case.

To be clear about what was done, there's also some noise in the pipe on this one: What the carriers did was they still have subsidies for their existing customers. I don't want to talk about what their existing customer to new customer ratio is, but you can find out numbers from different parts of the world and model that. They pulled subsidies on new customers, and so it wasn't a pull of all subsidies, it was a pull of subsidies from new. All carriers in that market did not do that, a couple of the carriers did. So I wouldn't necessarily use that as a proxy for the world, I guess is my point.

iCloud and iTunes Match

Oppenheimer: Customers are using all the features of iCloud, response has been terrific, feedback has been terrific.

Pickup on storage [customers purchasing expanded storage or iTunes Match] is occurring and growing, because we just launched iCloud in October and we've now got over 125 million users that have come onto the service since then and they're building up documents and music and other things that they want to store, so I think storage growth will more come over time.


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