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Highlights From Apple’s Second Quarter Earnings Call

Just a little while ago, though, Apple released their earnings report for the second quarter of the 2012 fiscal year, and the news was quite good. Apple generated $39.2 billion in revenue for the quar...
Highlights From Apple’s Second Quarter Earnings Call
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  • Just a little while ago, though, Apple released their earnings report for the second quarter of the 2012 fiscal year, and the news was quite good. Apple generated $39.2 billion in revenue for the quarter and sold 35.1 million iPhones, both figures beating Wall Street expectations. As a result, Apple’s stock surged in after-hours trading. The surge not only made up for losses during this morning’s worries over possible diminished iPhone sales, but also for declines earlier in the month.

    AAPL Stock Rebound

    Here are some other highlights from the earnings call:

  • Though Mac sales grew more slowly in this quarter than in the previous quarter, they still grew more than the overall PC market during the same quarter. While the PC market only grew about 2% in the quarter, Mac sales grew 7%.
  • The lowered entry price for the iPad – $399 for the iPad 2 – generated increased demand for the tablet in several markets. Most notably, the education market and several foreign markets.
  • When asked about convergence of tablet and desktop products (a la Windows 8), Tim Cook said that while “anything can be forced to converge,” but that doing so often results in making the kind of compromise that reduces the quality of user experience. Though other companies might decided to go that route, Cook said “we’re not going to that party.”
  • When asked about carrier subsidies and the carriers’ increasing discomfort with how much of the iPhone they are required to subsidize, Cook had some interesting comments. Apple, he said, is focused “on making the very best smartphone in the world,” and that “carriers want to provide what their customers want to buy.”
  • One analyst asked Tim Cook about Apple’s ongoing legal battles and whether Cook might be willing to settle rather than pursue continuing lawsuits begun during the tenure of Steve Jobs (though Jobs was never mentioned by name). Cook replied that although he found litigation distasteful, litigation would continue until Apple could reach a settlement that they found satisfactory. “We just want people to invent their own stuff,” Cook said. While he has “always hated litigation,” he stressed how important it was “that Apple not become the developer for the world.” Given that fact, Apple would not be willing to settle until they could be confident that Apple’s innovations would not continue to be infringed by competitors.
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