updated 07:45 pm EDT, Wed July 25, 2007
Apple's music business
Apple's music business remained strong during its June quarter to help the company post record-breaking revenue, with music-related sales accounting for 40 percent of the Cupertino-based company's total revenue during the quarter. Apple's other music revenue surged 33 percent year-over-year fueled by strong iTunes Store sales, and research firm NPD announced that the iTunes Store has become the third largest overall music retailer in the U.S. above Amazon and Target. Amidst the introduction of iTunes-plus DRM-free music, Apple introduced its iPhone just 30 hours before the end of its third quarter, selling well over a quarter million phones within that time.
"We did have some activation problems during the first week or so, and we would like to apologize to those customers who had less than a perfect activation experience," Apple CFO Peter Oppenheimer said. "Since then, AT&T has corrected the most common cause of these difficulties, and we are now experiencing a very high percentage of problem-free activations."
Oppenheimer reported "overwhelmingly positive" feedback on the iPhone, and cited a USA Today survey suggesting that 90 percent of iPhone owners are extremely or very satisfied with their phones. The same survey also revealed that 85 percent of respondents were extremely or very likely to recommend the iPhone to others, which led Apple's financial chief to conclude that customers agree with Apple that the iPhone is a revolutionary product.
"It took Apple seven quarters, almost two years, to sell our one millionth iPod. We hope to sell our one millionth iPhone by the end of its first full quarter ending September 29th."
iPhone in Europe
Apple said it is on track to begin selling the iPhone in Europe during the fourth calendar quarter of this year, starting with a few major countries and expanding into other countries throughout 2008.
"We will announce our initial plans with our European partners later this quarter," Oppenheimer confirmed.
Apple reiterates 10 million iPhone goal
The Cupertino-based company reiterated its goal to sell 10 million iPhones in calendar year 2008, and plans to build on the device's foundation by incorporating new software features and applications at no charge to customers.
Additionally, Oppenheimer reminded investors that Apple has yet to see a dime of its revenue related to payments from AT&T during the June quarter, but said that revenue will show up in the company's September quarter results.