updated 06:55 pm EST, Wed January 12, 2005
Earnings conference report
Apple this afternoon held a Q1 earnings conference call with industry analysts. Apple executives Peter Oppenheimer, Tim Cook, and Gary Whipler discussed the company's results for the first quarter of fiscal 2005, as well as the company's latest products-- namely the Mac mini and iPod shuffle.
Highlight's from today's earnings conference call with Peter Oppenheimer, Tim Cook, and Gary Whipler:
- Apple reported the highest quarterly revenue and net income in the history of the company
- Apple said its record revenue and profit were driven by very strong CPU sales and record demand.
- Apple's operating margin increased to 11.5 percent from 3.7 percent.
- The company also reported a higher-than-expected gross margin of 28.5 percent for the first quarter.
- Mac-based revenues were up from last year.
- Apple saw record demands for the iPod, selling 4.5 million units
- Sales of the HP-branded iPod accounted for seven percent of overall iPod shipments.
- Apple sold over a million Macs this quarter, driven by strong sales of the iMac G5. The company shipped 1,046,000 Macs-- the most in four years.
- There was a reported 358 percent jump in music related revenues.
- Apple is "very pleased with the momentum and popularity" of the iTunes music store.
- Apple apparently expects song prices to stay around 99 cents.
- Apple was also optimistic with regard to its retail stores, located throughout the U.S. and increasingly around the world. Holiday traffic was "very strong" and the mini-store format "exceeded expectations." Apple said that it had 10.7 million visitors to its retail stores, averaging
8,700 people per store per week.
- Apple opened 15 new retail stores, ending the quarter with 101 retail
outlets worldwide. Apple will end 2005 with 125 stores, ten of which will be located outside the US.
- Apple's new London retail store saw 450,000 visitors in first seven weeks.
- Apple saw its strongest education first quarter in 7 years. HIgher education sales increased by 25% on strong iMac and iBook sales.
- Apple saw revenue increase by 63 percent in Europe (or 66 percent when you
include the London retail store). The Americas revenue increased by 81
percent when including all U.S. retail stores. Japan revenue increased by 26 percent, including retail stores.
- Apple plans to open its first retail outlet in Canada this year.
- Apple's retail revenue was $567 million, more than double the year-ago
quarter. The average store revenue was $5.9 million, a 48 percent increase
from the year ago quarter.
- Apple shipped 623,000 desktop Macs, an increase of 44 percent. This number included 337,000 iMac G5s and 119,000 eMacs.
- The company also reported a seven percent increase in laptop sales, alongside record iBook shipments.
- Apple does not expected to return to the high level of Power Mac sales seen in the past (200,000+).
- The lower Power Mac sales (compared to previous quarters) can be attributed to strong iMac G5 sales. Apple feels a "large percentage" of customers who would previously considered a low-end Power Mac G4 are now turning to the iMac G5.
- Apple is "really happy with the effort at IBM" with regards to G5 processor production.
- Apple is "focusing on total unit sales ... not of any specific family" when it comes to Mac sales.
- Apple is "very pleased" with the reception of the Mac mini and iPod shuffle, introduced yesterday.
- Apple hopes the Mac mini will allow more people to experience the Mac platform.
- When asked about the possibility of a G5-based PowerBook, Oppenheimer simply said it would be the "mother of all thermal challenges."
- Apple retains approximately six and a half billion dollars in cash.