These are brief notes of tonight's Apple Q2 - 2006 Conference Call, the question and answer session is still in progress and we will create a similar report for those results.
- Apple will acquire approximately 50 acres about 10 minutes from Apple campus for second campus
- Cost of second Apple campus? $120 million to acquire new data center and first of several properties for second Apple campus not further comment on that at this time
- Apple Retail Stores' "new to Mac customers" percentage rose to 50% for the quarter
- 7,000 Macintosh retail storefronts worldwide
- Apple believes there are more opportunities for iPod channel partners worldwide
- Over 35,000 storefronts across the world carry iPod models
- Apple continuing "to be conservative with cash" looking forward
- "There is nothing holding us back we are on target to complete Intel transition by end of year"
- iTunes Music Store operated "above break even" for the quarter
- France DRM proposed law: Apple believes it will result in "state sponsored piracy." Apple doesn't think that the proposed law will benefit anybody.
- No significant constraints on components on upcoming quarter
- No significant discounting of PowerPC G4 Mac models during the quarter
- Apple looking for feedback by releasing Boot Camp as Public Beta
- Apple thinks Boot Camp makes the Mac attractive to Windows users thinking about switching to Mac
- Apple has no desire or plan to sell or support Windows
- Apple's NAND flash advantage one main reason for higher gross margin
- Apple will not disclose gross margins for iPod due to competitive reasons
- 1,500 apps are now Universal
- Apple working closely with Adobe on Universal version of Photoshop, other Adobe apps
- Heavy users of Photoshop likely not satisfied with Rosetta performance
- Casual users of Photoshop may be satisfied with Rosetta performance
- iMac Core Duo did "very well" in quarter
- Intel based Mac mini only shipped for last 4 weeks of quarter
- "High level of interest in Boot Camp Public Beta Apple will not release download numbers for the beta product
- Will Apple add virtualization into Leopard? Apple will not speculate about that at this time
- Apple is "seeing a high level of interest in" Boot Camp
- Apple thinks Boot Camp makes the Mac more appealing
- Intel based Macs outsold PowerPC Macs in month of March
- Customer response to Intel based Macs in "enormous"
- Apple believes iTunes Music Store continues to gain momentum
- iTunes Music Store music sales higher in March than December quarter
- Apple ended the quarter with 4-5 weeks of inventory in channel
- Apple pleased with sales of all iPod models
- iPod gross margins were above 20% in March quarter
- 30 of the 40 Apple Retail Stores planned in 2006 will be in the U.S.A.
- MacBook Pro supply was severely constrained during Q2
- Supply constraints in the past for iPod mini do not give a good basis for Apple to predict Q3 iPod seasonal sales
- Apple has no comment on iBook successor
- Apple traditionally starts to see Education sales in late June, but main buying in in July and August
- Apple views Mac mini as an incredible value the lowest priced way to get into the iLife suite
- Germany up 10% to 21%, France up to 11% in Feb. iPod market share
- iPod market share in February: UK 40%, Japan 54%, Canada 45%, Australian 64%
- Customers were not discouraged to wait for Intel based Macs in Apple Retail Stores
- Retail stores very focused on Intel transition
- Apple very excited about what's in the iPod pipeline going forward
- iPod sales less than previous quarter due to seasonality (holiday quarter vs. post holiday quarter)
- Apple very pleased with iPod sales in Q2
- Component pricing on LCD, flash memory and software sales of iLife and iWork helped increase gross margin for the quarter.
- Apple outlook for Q3 06: $4.2 - 4.4 billion.
- Apple spent about $120 million for new data center and start of second Apple Campus in Cupertino, CA
- Gross margin was 28.9 percent for quarter
- Apple plans to open about 40 new stores in fiscal 2006
- 10,000 visitors per Apple Retail Store per week
- NPD shows Apple's share of U.S. MP3 player market up from 71% in December to 78% in March
- Over 70 TV Shows now available via iTunes Store.
- $485 million music revenue - strong iTunes Music Store sales, iPod Hi-Fi sales, and iPod accessories sales
- Intel pause was observed during the quarter due to Mac Book Pro ramp up, customers waiting for announcements, Universal app availability
- Apple on track to have entire Mac line transitioned to Intel by end of calendar year
- Q2 06 was a 13 week quarter vs. a 14 week quarter for Q1 06
- Apple said that it sold 1.11 million Mac computers, almost 4% higher over the 1.07 million units it shipped a year ago
- Apple reported total iPod sales of 8.5 million units, up from 5.3 million in last year's second quarter; the company now gets 39% of its revenue from iPod
- Revenue climbed almost 35% to $4.36 billion, up from $3.24 billion
- Apple earned $410 million, or 47 cents a share for the quarter ended April 1, up from $290 million or 34 cents a share a year earlier