On Apple’s philosophy
We ’re consecrate to make the very skillful products in the Earth and we think about the smallest of details and we ’re unwilling to rationalise quoin in deport the respectable customer experience in the world . It ’s this unforgiving dedication to instauration and excellence [ that ] is the reason that our customer choose to grease one’s palms our products , and this will always be the driving violence behind Apple . We ’re bring off the companionship for the long streamlet and we ’ll continue to make great long - term decisions . We remain very , very confident in our strategy and will use our reality - course attainment in hardware , software , and service .
iPhone
The demand for iPhone is extremely racy . We ’re thrilled with what we see . We are in a significant state of stockpile justly now . In terms of the output , our output has improved significantly since earlier this calendar month , and I ’m very very pleased with the progress that we ’ve made there . I ’m pleased with the current spirit level of output in what is the largest volume incline in Apple ’s chronicle .
It ’s difficult to predict when supplying and requirement will equilibrate , but I ’m feeling very confident on our power to supply quite a few iPhones .
I ’m in reality not project whether supplying and requirement will balance for the quarter ; I ’m saying that I palpate great about where we are on the manufacturing ramp ; our supply output is importantly higher than it was earlier in October . I ’m confident that we ’ll be able-bodied to supply quite a few during the quarter , but in terms of when that balance wheel occurs , I ca n’t tell at this period . requirement isveryrobust .
Rolling out to multiple countries
We still uphold to anticipate rolling out to the 100 countries that we announced before ; it is our degenerate rollout ever . There will be some large nation in the month of December , but we anticipate still achieving the 100 . In term of cost , with each new product we see learning curves relate with ramping production . And the raw products we have now are no elision to that . The difference is the number of novel products that we have moving at once . As Peter suppose , and as you’re able to tell from the announcements we ’ve had the last match months , this is the most fertile period in our history in term of new merchandise introduction and invention [ and ] the past six weeks have been phenomenal in terms of new product insertion . And so we do see all of these price associated with each of these , but I do n’t see those cost accelerating on a per - unit basis as we go through the quarter ; I see it very much being a yield incline across many , many new products .
iPads in the PC market
China
In terms of what we saw in China for Q4 , revenue was $ 7.5 billion , that ’s up 26 % year on year , Mac was up highly strong , up 44 per centum . As you recollect , we launched portables for the first time in July ; the portables that we ’d antecedently announced in the U.S. in June , we announced in China in July . iPad was up 45 per centum in greater China , iPhone was up 38 and so all in all , a fantastic quarter .
That brings us to a full fiscal year tax revenue turn of $ 23.8 billion for China , which is really phenomenal when you guess about it — that ’s up over 10 billion year on year , up 78 percent and greater China now be about 15 pct of Apple for the financial year . And so we ’re extremely glad with how we ’ve done in China ; as Peter allude to in his opening remarks , we are remain to invest in our own retail store there . We persist in to expand statistical distribution with channel married person as well , and we continue to see it as an super exciting market with more and more people wanting Apple products .
iPads vs the competition
I have n’t personally played with a Surface yet , but the … What we ’re read about it is that it ’s a reasonably compromised , perplexing product . I think one of the problematical thing you do deciding [ about a ] product is to make hard tradeoff , and adjudicate what a product should be . We ’ve really done that with the iPad , and the user experience is utterly incredible . I suppose you could design a elevator car that vanish and floats , but I do n’t think it would do all of those things very well , and so I guess masses , when they look at the iPad versus private-enterprise offering , are going to conclude they really desire an iPad . I consider people have done that to date and I think that they ’ll proceed to do that .
The iPad mini and cannibalization
We do n’t really have an honest-to-goodness product , we have only new product . You know , we just announced the 4th - generation iPad as well , and so the direction that we look at this is that we provide a fantastic iPod touch , we provide an unbelievable fourth - generation iPad and an iPad mini and an iPad 2 . customer will decide which one or two or three or all four that they would like and will buy those . And so we ’ve find out over the geezerhood not to worry about cannibalization of our own product ; it ’s much better for us to do that than somebody else to do it . And the far , far bigger chance here are the 80 to 90 million microcomputer that are being sell per quarter . There ’s still over 300 million microcomputer being bought per class , and I opine a capital number of those people would be much better off buy an iPad or a Mac . And so , that ’s been a much big chance for Apple . Instead of being concenter on cannibalizing ourselves , I look at it much more that it ’s an enormous incremental opportunityforus .
On the Apple TV
For Q4 , we sell 1.3 million , that ’s up over 100 percent class on year . That means that we sold more than 5 million Apple telly during the financial year , which is almost double the previous year ; we sell 2.8 the late year . The business extend to do very well , but if you look at the revenue of this business versus our other businesses , it ’s quite little . And so , it still has the “ hobby ” recording label , however , it ’s a dear hobby . We carry on to focalise on it and continue to consider there ’s something more there and retain to pull the bowed stringed instrument to see where it takes us .
Why iPad sales declined
The June to September [ quarter ] was 17 million to 14 million . The first thing to note there is that as we talked about in the July call , the June twenty-five percent contained a 1.2 million increase in television channel inventorying . And so the actual sell - through sequentially in comparison looks very different than our report sell - in numbers pool do .
The second thing is that the 14 million exceeded what we had expected to do in iPad . And the reason we had wait it to pass up is that we believed that , based on the two or three years of solution that we ’ve bewilder , normally we would see a seasonal reduction in the September quarter versus the June quartern . Part of this is because K-12 heavily buys in the June quarter ; K-12 does n’t buy very much in the September poop , it becomes a high - ed sort of move , and higher - male erecticle dysfunction is still buying notebooks for the most part . There ’s some kind of normal seasonal . That ’s exaggerated further when we announce a Modern product in March and have an tremendous full fourth of demand in the June quarter ; when you equate that to the September quarter there would be a lifelike phase down . In summation to all of that , it ’s clear that customer stay purchases of pad due to unexampled product rumor , and these heighten in August and September .
Some of that was foresee and some of it I wish well would n’t occur , but it did occur . And so , that ’s how I ’d explicate the sequent difference . On a class over class basis , because of the year - agone after part having also a channel inventory anatomy as we stocked the channel to the right level , the sell - through , year over class , actually grew 44 percent . The fundamental sell - through was extremely strong . We uphold to feel slap-up about how iPad has done , and with announce the fourth - propagation iPad just this calendar week and adding iPad mini to the family , we think it ’s going to be an incredible holiday season .
The iPhone 5 global rollout
What we did ab initio was we plan the first 30 to 40 countries prior to insert the product and rolled those out across September in two different date . The residuum of the fourth , we planned with an eye toward the provision and what we conceive the requirement would be , but we do be after these in progress and so it is not a accurate science . We obviously have to plan those with several weeks of observation , and so now and then it can be different than what we think .
iPad mini pricing philosophy
One of the things we seek to do is to make a product that people will have it away for month and years after they ’ve purchased it and retain using it in a robust way . So that ’s what iPad miniskirt has been designed to do ; you’re able to really see that more broadly speaking on an iPad by look at the usage statistic . As I ’d mentioned earlier this hebdomad , over 90 per centum of the Web traffic from tablets are from iPad . Apple will not make a product that somebody may feel in force about the second they ’re paying for it and then when they get it home they seldom ever use it again . That ’s not what we ’re about , it ’s not the sort of experience we need our customers to have , and I would advance you to apply an iPad miniskirt , and I do n’t think you ’ll be using anything other than maybe another iPad or something after you do that .
iOS in the enterprise
We now have almost all of the Fortune 500 that are examine or deploying iPads , and I call back with the late announcements , insight will only arise . We ’ve also pushed fairly aggressively in the Global 500 , and those number now are above 80 percent on both iPhone and iPads . I feel like we ’re doing fairly well there ; there ’s clearly much more to do , but I ’m feel pretty good about it .
Component constraints
In terms of iPad and iPhone , I do n’t see a factor shortage gating us for the one-fourth in the bit that we ’ve consecrate you in the guidance . I mean we ’ve solved some challenge there and feel in effect about our position . In term of general shortages , on the iMac we ’ll be constrained for the full quarter in a significant path . Part of that is that we ’re beginning ship the 21 - inch iMac in November and the 27 - inch in December , and so there will be a short amount of metre during the quarter to cook up and ramp those and I carry the need to be full-bodied . We will have a significant shortage there ; the others are more based on how big is “ big ” from a demand point of view , and that is very difficult to predict . But you’re able to tell that we ’re extremely bullish on the requirement with the gross direction that Peter talked about sooner .
iPad vs low-cost challengers
We ’ve view lowly - monetary value challengers before , and iPad continues to beat every other pad of paper on the marketplace at any price . We think customer are very impudent , we think they have very gamy expectations , we conceive that they want a equipment that can do more , and we ’re positive that our focus on make the best production is what will gain ground at the remnant of the Clarence Day and we will bide true to that .
Samsung: Still on the supply chain?
I would not say that there ’s been a significant variety in our supplier married person . There ’s always some variety , manifestly , but I would n’t key any change as significant , and there has n’t been a modification that would have driven more toll . We continue to be a client of Samsung , and go forward to have a commercial-grade human relationship .
The decision to do a smaller iPad
The comment that I believe you ’re referencing [ regarding Apple not doing a 7 - inch tablet ] is a scuttlebutt that Steve had made before about 7 - inch pad of paper , and let me be decipherable : We would not make one of the 7 - inch tablets . We do n’t think they ’re good product , and we would never make one .
Not just because it ’s seven in , but for many reasons . One of the reasons , however , is size . I ’m not sure if you ensure our keynote , but the difference in just the real estate size between the 7.9 — almost 8 — versus the 7 is 35 pct , and when you depend at the available domain , it ’s much greater than that . It ’s from 50 to 67 percent . The iPad miniskirt has the same number of pixels as iPad 2 does ; you have access to all 275,000 apps that are in our App Store that have been custom - designed to take reward of the full canvas . And so iPad mini is a fantastic product , it ’s not a compromise product like the 7 - column inch tablet . It ’s in a whole different conference .
