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Apple \"hard at work\" on new products, \"enthusiastic\"

updated 06:15 pm EDT, Wed July 13, 2005

Q3 conference call

Apple today held its first earnings conference call since it announced a transition to the Intel platform. Apple executives Peter Oppenheimer and Tim Cook said the company has yet to see a significant pause in sales in anticipation of forthcoming Intel Macs. Oppenheimer said Apple "expects to learn more" in the coming quarter about how the announcement will affect Mac sales. However, he assured analysts that Apple remains committed to bringing new PowerPC products to the market in the coming quarters, and was quick to point out that today's earnings were "driven by the highest Mac sales in over four years." Oppenheimer emphasized that Apple is "hard at work" -- and "very enthusiastic" about -- new products, both Macintosh and otherwise. In terms of the company's music business, Apple saw "very impressive" numbers, outstripping market growth significantly.

Apple reported that 62 percent of revenue came from its Mac business, while 38 percent of revenue came from music -- up over 300 percent. Revenue from Mac sales were up a respectable 29 percent. Oppenheimer said Apple "couldn't be happier" with Mac sales. In accordance with a new company policy, Apple would not give a Mac or iPod unit sales breakdown.

The iPod held a 75 percent share of the MP3 player market, while the next closest competitor had a five percent share. Oppenheimer noted that the Apple iTunes Music Store is now available in 19 countries, and commands a 70 percent share of the global online music market. In the United States, the iTunes store captured a record setting 80 percent market share. In response to concerns over a building iPod inventory, the Oppenheimer said inventories were within the target range. Oppenheimer said while he remains respectful of the competition, he feels the iPod and iTunes are "by far" the best products in their market categories.

Tim Cook would not comment on the forthcoming iTunes-based phone from Motorola.

Apple feels its addition of podcasts to iTunes 4.9 is a "great complement to the ipod experience." Over 4,000 podcasts are already available for free via the iTunes store.

Apple retail stores had "another solid quarter," according to Oppenheimer. Apple opened seven stores during the quarter, with an average of 105 open during Q3. The average store revenue has climbed to $5.3 million per store, a 56 percent increase. Traffic to Apple Stores continues to grow, with a total of 12.2 million visitors each weak. Each store sees an average of nearly 9,000 people per week. Apple will end fiscal 2005 with 125 stores open worldwide.

Apple saw the highest revenue in nine years form education sales for a June quarter.

Apple saw a "very successful launch of Mac OS X Tiger," which generated about $100 million in revenue in the third quarter. The stronger-than-expected Tiger sales contributed to the company's high gross margins, according to Oppenheimer. Q3 2005 was the most successful quarter in Apple's history in terms of operating system sales. Oppenheimer said the response to Tiger's Dashboard and Spotlight features has been "tremendous[ly]" positive. The install base of Mac OS X has grew to 16 million users in Q3.

Apple now has $7.5 billion in cash. Neither Oppenheimer nor Cook would comment on future plans for the money.




by MacNN Staff

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Comments

  1. Dave Hagan

    Joined: Dec 1969

    0

    Oh yeah?

    WTF are the new iBooks/PowerBooks? What are we? Chopped liver? Geez.

    Have a nice day.

  1. ATPTourFan

    Joined: Dec 1969

    0

    cha-ching

    $7.5 Billion in cash money... take that, 50 Cent!!

  1. eddd

    Joined: Dec 1969

    0

    Wait for it...

    ... yep, the G5 laptop is now a certainty

  1. bleee

    Joined: Dec 1969

    0

    The questions is...

    Even with a new product line will anyone bite or will they wait for the new intel line? Keeping in mind that the upgrade cycle for the seasoned Mac user is much longer than PC users.

  1. Saint_Stryfe

    Joined: Dec 1969

    0

    Of course...

    they'll bite. Mac users will buy macs regardless of what's in the pipeline. IT's larger buyers - ie the kind Apple doesn't have - who wait till something comes out. But home buyers/SOHO/schools? They'll buy if and when they need to.

    /is buying a referb iMac G5 tommorrow.

  1. brainiac_7

    Joined: Dec 1969

    0

    Nice!

    I was curious as to what the negative spin would be here. As for Mactels, speaking as a dual 2 GHZ owner, if a 3 GHZ G5 comes out before the switch, I'll happily buy it. I assume the Intel roll out will be laptop-first.

    The view of Mac sales compared to the iPod is rather like the view from a sports car passing a slower, sleeker sedan. Since the sports car is moving faster, the sedan appears to be moving slower, when in fact both are moving forward. The dom platform has been stumbling and alienating for years now; eventually that adds up too. I believe the fix for Mac sales is a much slower pace, and more difficult feat; but it's gettiing closer and faster.

  1. Ikon

    Joined: Dec 1969

    0

    Well

    I'm still waiting on the .mac widgets. So much for the hard work.

  1. michaeljohn63

    Joined: Dec 1969

    0

    Surprises me.

    I had thought the announcement of MacTel would definitely impact Mac sales immediately. Although Apple is warning analysts that it too thinks there might be some trouble ahead in Mac sales prior to the transition, I am surprised it hasn't already hit. Good. Maybe the slowdown will be marginal, or will not be noticeable much at all.

  1. testudo

    Joined: Dec 1969

    0

    Re: surprises me

    I had thought the announcement of MacTel would definitely impact Mac sales immediately. Although Apple is warning analysts that it too thinks there might be some trouble ahead in Mac sales prior to the transition, I am surprised it hasn't already hit. Good. Maybe the slowdown will be marginal, or will not be noticeable much at all.

    Well, keep in mind that the announcement to switch was in June, so it would've only affected the last three weeks of the quarter. The bigger test will be NEXT quarter.

    Right now, there are three camps of Apple users. In the middle are those that don't know or don't care about the Intel transition and buy what they need when they need it (this would be either low-end consumers who don't follow mac news, or professionals/businesses who buy on need, not want).

    After that, you've got the two sides. In one corner are the "I'm waiting to get a MacTel!", which is insane because who wants a version 1 of new Apple hardware, anyway (h***, Apple has so much trouble getting v1 of PPC computers right - iMac G5 anyone - that who knows what problems will befall those new MacTels). Most of these people, I believe, are waiting for powerbooks/ibooks, as the rumor was/is that those will get updated first, plus since Apple's offerings are so behind the curve now, why waste the money.

    In the other corner are the "You can have my PPC mac when you rip it from my cold, dead, fingers" group, who think the Intel switch is the beginning of the end. Add in there those who'll have a hard time believing that their Altivec apps will be better served (with a costly update) on Intel hardware (I haven't heard one word on vector performance on the developer machines yet - interesting). Finally, they're joined in that corner by the "BUT I NEED CLASSIC BECAUSE NO ONE MAKES THE APPS I USE ANYMORE, BECAUSE APPLE'S MARKETSHARE SUCKS!" group, who still need to use classic apps here and there (and there are more out there than Apple would like to admit). All these people in this corner will be buying PPC macs over the next year and two to make sure they keep their backward compatibility.

    The biggest question is whether the MacTel waiters are a larger group then the backward compatiblists. (And I do realize there will be certain people in both corners, which is a nifty feat, but allowed under quantum laws of physics, those who need or want new macs but are limited in their buying capacity by purchasing decisions that deem upgrades at this point in time are wastes of money and soon will be obsolete.

    And despite what Apple says, I'm still wondering what Apple's and other developers true intentions are with regards to dual binaries. Being able to make them and actually spending the time to do that is two different things.

  1. SomeToast

    Joined: Dec 1969

    0

    Re: surprises me

    Finally, they're joined in that corner by the "BUT I NEED CLASSIC BECAUSE NO ONE MAKES THE APPS I USE ANYMORE, BECAUSE APPLE'S MARKETSHARE SUCKS!" group, who still need to use classic apps here and there

    Live Picture users are in this camp. They'll buy Classic-capable Macs just for this one app (which, like the Newton, still outshines the competition in key areas years after being discontinued).

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