MacDailyNews presents live notes from Apple’s Q112 Conference Call

MacDailyNews presents live notes from Apple’s Q112 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Live notes from Apple’s Q411 Conference Call in reverse chronological order:

• 6:01PM ET AAPL +$33.64, 8.00%, to $454.05.

• End of conference call

• Cook: We won’t comment on future roadmap. I will point out that we just sold a record 37 million iPhones and we could have sold more if we could’ve made them, so there are millions of people out there who really love iPhone just the way it is.
• iPhone with 4G and larger screen?

• Cook: What we focus on is innovating and making the world’s best products
• Cook: If you look at the NPD data, in the U.S. in October and November, which only contains a portion of iPhone 4S, iPhone is at 43%, Android is at 47%; Nielsen and comScore show similar numbers
• Cook: Mac has outgrown the market for over 20 quarters in a row, but still has single digit share of global market

• Cook: We saw this before with the iPod halo for the Mac. Not a phenomenon that is new to us.
• Cook: In enterprise, consumer, and education, we have seen iPhone be a catalyst for iPad and then for Mac. Halo effect.

• Cook: iPad wins in ecosystem and overall customer experience. Over 55 million iPad units sold – only been on the market since April 2010
• Cook: iPads sold 2X in education YOY, somewhat surprising how rapidly iPad is begin adopted in education
• Cook: Clearly there is cannibalization of Mac by iPad, but iPad is feasting on Windows PCs much more
• Cook: After Amazon launched Kindle Fire, there wash;t an obvious effect on iPad sales + or -. My own view is that in the U.S. there was no obvious change in the data

• Cook: China is the focus, Brazil would be next on the list of those two countries
• Cook: Doesn’t envision Brazil retail in the short term. Online sales are there today.
• Cook on acquisitions: We tend to do smaller companies with innovative tech, we are very disciplined. We integrate new companies into Apple Inc.

• Oppy: Revenue to be down sequentially due to quarter length, 14 weeks vs. 13 weeks and U.S. dollar has strengthened vs. euro

• Cook: China is an extremely important market for us and we continue to explore ways to grow it
• Cook: Added carriers last quarter: KDDI in Japan and Sprint in the U.S. and Apple is pleased with both partners
• Cook: Over 130,000 points of sale worldwide, up 35% YOY, for iPhone now.
• Cook: It’s incredible to have over 85 million iCloud users already. It solves a lot of problems. It was a fundamental shift to have the bulk of content in the cloud and available everywhere. iCloud is a strategy for the next decade.

• Oppy on cash yet agin: We are examining all uses of our cash balance. Supply chain, acquisitions, etc. Nothing to share with you on dividends or buybacks. We are actively discussing it. We are not letting it burn a hole in our pocket.

• Cook: I love Apple. Every day reminds how lucky I am [to be CEO]. We feel very good about where we are.
• Apple TV? Cook: Apple TV is doing very well. Last fiscal year, ended Sept., Apple sold 2.8 million units. Just sold over 1.4 million units in holiday quarter. Apple still thinks of it as a “hobby.” No comment on future products.

• Apple’s massive cash pile? Oppy: We have always discussed internally our cash. We recognize that it is growing for all of the right reasons and our discussions are “active.” We do not have anything to announce today. When we have something to announce, we will announce it. Again, we are actively discussing our cash.

• Each of the three iPhone models were important, but iPhone 4S was clearly the most important driver of the record unit sales

• Cook: Apple will continue to innovate on iPad like crazy
• Cook: This was the year of the iPad, not the tablet, for the 2nd year in a row.
• Cook: iPad ecosystem is in a class by itself. Over 170,000 iPad apps now vs. a few hundred for the limited function tablets and e-readers also on the market
• iPad: Any impact from lower-priced tablets like Amazon Kindle Fire? Cook: We’re happy with the 15.43 million iPads. A huge opportunity for Apple. There will coma a day when tablet units are larger than PC units. Tablets exceeded desktop PC sales last quarter in the U.S.

• Apple expects NAND DRAM and LCD supply to exceed demand and therefore be favorable in current quarter
• Apple has included HD cost increases in their guidance for Q212
• Component environment was favorable for Q112; Apple expects it to be favorable in most areas in current quarter, outside of HDs due to Thailand tragedy
• Demand in China has been staggering for iPhone

• 5:23PM: AAPL +31.54, 7.50%, to $ 451.95

• Cook: iPhone 4S was the most popular iPhone model during the quarter
• Cook on iPhone: “We could not be happier” Apple bet high with iPhone production and it obviously paid off.
• Apple saw strength in every geographic region, especially in the U.S. and Japan
• Apple made the correct decision to go with a broad range of iPhone models
• Apple ended with iPhone backlog at the end of the quarter; still short in some key geographies, working to get supply/demand in balance
• Tim Cook: “We were thrilled with the 37 million iPhones sold during the quarter; a breathtaking customer reception”

• Analyst questions…

• Q112 guidance: “Revenue of about $32.5 billion” and “diluted earnings per share of about $8.50.”

• Apple is actively discussing what to do with their cash, have nothing to announce today
• 61 billion of it was off-shore
• 97.6 billion in cash and short-term
• Tax rate 25.25%
• $3.36 billion in operating expenses
• 110 million visitors to retail stores
• Sold 1.1 million Macs vs. 851,000 units YOY; more than half the Macs sold were to customers new to Mac
• Apple Retail Stores: $6.1 billion revenue, 59% YOY increase

• App Store: Over $4 billion earned by developers
• iCloud has over 85 million users signed up as of today
• 315 million cumulative iOS devices now sold

• Over 3 million iTunes U downloads
• Over 600,000 copies of iBooks Author downloaded since release last week

• iPad is used in a wide variety of businesses, from wineries to airlines
• Over $9.1 billion in iPad and iPad accessories during Q112
• iPad was extremely popular with holiday buyers

• iPHone 4S began shipping in China. iPhone 4S now available in 90 countries
• Nearly all of Fortune 500 now approve and/or use iPhone on their networks
• $24.4 billion revenue from iPhone and iPhone accessories
• Oppy: Customers captivated by iPhone 4S’s Siri

• Over 140 million apps and content downloads on December 25, 20111
• iTunes Store record results of $1.7 billion during Q112
• iPod sale ahead of Apple’s expectations, iPod touch continued to account for over half of all iPods sold

• 5:04PM: AAPL +32.61, 7.76%, to $453.02

• Record 5.2 million Macs, 26% unit increase YOY
• Record 15.43 million iPads, 111% unit increase YOY
• Record 37.04 million iPhones, 128% unit growth YOY
• 15.4 million iPods, 21% unit decline YOY

• Gross margin was 44.7 percent compared to 38.5% YOY
• International sales accounted for 58% of the quarter’s revenue

• Apple CFO Peter Oppenheimer, CEO Tim Cook present

• Conference call begins
• Awaiting start of conference call…

• 4:54PM: AAPL +$34.17, 8.13%, to $454.58
• Trading in AAPL shares were halted in after-hours trading. Apple shares resumed trading at 4:50pm ET

• According Thompson Financial, the analysts’ consensus called for $38.85 billion in revenue and $10.08 EPS
• On October 18, 2011, Peter Oppenheimer, Apple’s CFO, gave Q112 guidance of “revenue of about $37 billion” and “diluted earnings per share of about $9.30”

• Apple posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share
• Apple’s fiscal 2012 first quarter spanned 14 weeks and ended December 31, 2011