Apple CEO Steve Jobs joined Chief Operating Officer Tim Cook in a conference call with analysts, revealing that the company doesn't think an 7in iPad is the way forward, that Apple doesn't know how to make an phone that costs $50, that enterprise adoption of the iPad and iPhone is beating expectations, and that the Mac is increasingly finding it's way into the enterprise.
Adoption of iPhone in enterprise still accelerating with Proctor and Gamble, GE, Pfizer and more, making the iPhone available to employees.
The iPhone 4 is now shipping in from 60 per cent to nearly 80 per cent of Fortune 500 countries.
There are 166 iPhone carriers in 89 countries.
Apple has about 3.3 million iPhones in its channel inventory. Still have sizeable backlog and could have sent more if they could have made them fast enough.
Sold 14.1 million iPhones in quarter, and 91 per cent unit growth, and way ahead of IDC's 64 per cent growth for smartphones.
(Handily beat RIM's 12.1 million BlackBerries sold.)
Tim Cook: "It's clear that the iPhone 4, announcement and demand, took the demand to an entirely different level. We had anticipated a different level, but it's even higher."
Steve Jobs: "Nokia makes $50 handsets and we don't know how to make a great smartphone for $50, but believe me I'll let you know when I do."
Apple has sold almost 4.2 million iPads.
Over 65 percent of Fortune 500 are deploying or piloting the iPad.
There is about 3-4 weeks of iPad channel inventory, which is below the target of 4-6 weeks. (So Apple's unlikely to introduce a new model soon...)
Built about 500K iPads over the past quarter.
Steve Jobs: "Avalanche of tablets to arrive in the coming months. Almost all of them use 7-inch screen vs. iPad's 10-inch screen. One thinks the 7-inch screen would offer 70 percent of the 10-inch screen. 7-inch screen is only 45 percent as large as a 10-inch screen. You could increase the resolution, it's meaningless unless the user can sand down their fingers to one-quarter of size. There are limits to how small you make the screen for a touch interface. Every tablet user is also a smartphone user. No tablet can compete with the ease and small size of smartphone. Given that all tablet users will already have smartphone in their pockets, giving up screen estate to fit in the pocket makes them tweeners. We think current crop of 7-inch tablets will be DOA." (So no 7in iPad then?)
Steve Jobs "The reason we don't make a 7-inch tablet isn't because we don't want to hit a price point, but because we think you can't make a great tablet for 7-inches. You're looking at it wrong. You're looking at it as a hardware manufacturer who doesn't think about the software. You're sitting around thinking "how can we make this cheaper? Well we can put a smaller screen, slower processor, less memory" and you think the software will make it come alive, but it won't."
iPad now has over 35,000 apps in the App Store.
Steve Jobs: "We're already seeing tremendous interest in iPad from education and, much to my surprise, from business. We haven't pushed it really hard in business, and it's being grabbed out of our hands. And I talk to people in all kinds of business everyday that are using iPads. So, the more time that passes, the more that I'm convinced that we've got a tiger by the tail here. This is a new model of computing—you know, we've already got tens of millions of people trained on with the iPhone. It lends itself to a lot of different aspects of life, including personal, educational, and business."
iOS device sales of 125 million passed last month. (7.5 million iPads have been sold so far).
Over 200,000 registered iOS developers. Including over 65,000 games/entertainment and over 30,000 iPad apps.
Last week, Eric Schmidt reiterated that they are activating round 200,000 Android devices per day. For comparison, Apple activated 275,000 iOS devices per day for the last 30 days on average.
Record breaking quarter. 3.57 billion compared to 2.04 billion, an increase of 75 per cent. 874,000 Macs solds compared to 670,000, up 30 per cent.
New Beijing and Shanghai stores opened on last day of quarter and were the highest revenue ever.
317 stores now open worldwide including 84 outside US.
301 stores open during Sep quarter, average revenue per store was 11.8 million.
75 million visitors, compared to 45 million in year ago quarter. Total visitors up 62% year over year.
Expect to open 40-50 stores in fiscal 2011, with only 50 percent of them outside the US.
Sold over 250,000.
In fiscal 2010, Apple generated almost 5x the revenue and 10x earning of fiscal 2005.
First $20 billion quarter.
$50 billion in cash (in the bank). Steve Jobs: "Of course that's been suggested to us [giving some cash back to shareholders]. We strongly believe that one or more strategic opportunities may come along and that we're in a unique position to take advantage of, because of our strong cash position. We don't let our cash burn a hole in our pocket or use it to make stupid acquisitions. We'd like to continue to keep our powder dry because we do think there are one or more strategic opportunities in the future. That's the biggest reason."
Steve Jobs: "Our goal is to make the best devices in the world. Not to be the biggest—Nokia's the biggest, and we admire them. But we don't aspire to be like them. We want to be like us, and we want to make the best ones. In our part of the market, Android is our biggest competitor. They beat us while we were transitioning to the iPhone 4, so we're waiting to find out what they did in this quarter."
Steve Jobs: "Google loves to characterize Android as "open" and iOS and iPhone as "Closed". We find this a bit disingenuous and clouding the real difference between are two choices. First thing "open" makes you think of is Windows. Unlike Windows, Android is very fragmented. Many Android OEMs, including HTC and Motorola, install proprietary user interfaces to differentiate from the standard Android interface. Compare with iPhone where every iPhone works the same. Multiple hardware and software iterations presents developers with a daunting challenge. Many apps work only on selected Android handsets running selected Android versions. iPhone only has two versions of software. Even if Google were right and the real issue is closed vs. open, it is worthwhile to remember that open systems don't always win."
Tim Cook: "The Mac is also increasingly getting pulled in to the enterprise as the employees are able to select. When people are given the choice, they prefer a Mac. We don't have as much distribution effort on that, but as we see it get larger, we will move accordingly. The great thing is that we're maintaining our focus on the consumer and the consumer is the forefront for thinking about all of our products. And the consumers in the enterprise are bringing this in."