Apple CEO Spills The Beans At Conference Call
Apple has notched a record-breaking Q4FY17 earnings result, with Chief Executive, Tim Cook, calling it the company’s “biggest year ever in most parts of the world”. Despite projecting record current quarter revenue, fuelled by the expensive iPhone X, the company remains largely ambiguous on the device’s delivery dates.
During the company’s LIVE conference call, Cook described Apple’s tenth-anniversary device, the iPhone X, as a “great phone”, pledging to get it into customers’ hands “as soon as possible”. Cook added that he can’t “predict when the balance of meeting demand will happen”, affirming that Apple doesn’t provide guidance beyond the current quarter. All in all, rather ambiguous.
When queried by Wall Street Journal Reporter, Tripp Mickle, Cook reportedly informed him that “ideally the X would have launched with the 8 model”, and that the staggered launch wasn’t really a “strategic move to maximize marketing”.Cook pointed to an “all time record revenue” in the United States and many other global regions, even notably China, which he claimed was “as expected”, much to the surprise of some market commentators. He remarks that the iPhone 8 and 8 Plus is officially the company’s “two most popular models now”, whilst remarking that iPhone X orders have been “very strong”. (They have stopped selling the iPhone 7).
Concerning the influence of the sales order mix between the iPhone 8 and iPhone X, Tim Cook simply remarks, “we don’t get into mix”, whilst offhandedly mentioning that he “hears hundreds are waiting outside in Sydney”.
As analysts push the CEO for answers concerning which of its phones are selling best, Cook remarks that “so far, it’s good success through all three”.
Cook refuses to reveal whether the iPhone 8 Plus is outselling the iPhone 8, however, notes that the iPhone 8 is the “fastest start” of all the Plus models.
This is notably the first time Apple has three new iPhones at the top end of the market, and the first time it has put out a staggered launch.
When queried, Apple’s Finance Chief, Luca Maestri, did not provide specific details about the cost structure of the iPhone X.
Concerning gross margins, Maestri states “the 38 to 38.5 is up a bit sequentially” and that there are “higher cost structures whenever new products launch”.The Californian-based company affirms that its best days are only ahead, with Cook expecting the current quarter to be “the biggest ever”, following a “sensational” 2017. Finance Chief, Maestri, has referred to Q4 growth as “broad-based”.
Going through feedback from customer satisfaction surveys, the company reveals that customers are enjoying its new App Store redesign, which has resulted in more time spent in the store, and consequently more downloads.
Revenue from Apple Music has reportedly soared to its highest conversion rate, increasing 75% in paid subscriptions from the same period last year.Apple’s Finance Chief affirms that streaming has notably helped Apple “turn the corner on music”.
Maestri did not reveal an exact number specific to Apple Music, though claims that “total subscribers” across all services notched 210 million by the end of September – a jump of 25 million from three months prior.
Apple’s Finance Chief states that the iPad and iPad Pro continue to see “strong demand”, adding that the division has seen growth in all “the reported geographic markets”.
The company claims that visitors to its retail and online stores has notched 418 million.
Apple states it has US$268.9 billion in cash, an increase of US$7.4 billion from three months ago. The company states 94% of it is held overseas.
The tech giant declares that in the quarter it has returned US$11 billion to shareholders.
The company re-iterates its current revenue forecasts of between US$84 billion and US$87 billion. Cook affirms that Asian-based sales will continue, as the company expects a continued strong quarter from China.
Concerning future technology innovation, Cook alludes to the fact that Apple “has the ability to turn millions of people into AR users through a software update”.
Since the live conference call, Apple’s shares have reportedly climbed 2.7% in after hours trading – seemingly influenced by Tim Cook’s continual remarks about the company’s bullish outlook for the current holiday quarter.