Apple might not be too happy about having a fourth-gen iPhone prototype get stolen
, but there's nothing like cold, hard cash to turn a frown upside-down -- and the company certainly made plenty of it in the second quarter of 2010, posting a $3.07b profit on $13.5b in revenue. That's the Apple's best non-holiday quarter ever -- profits were up 90 percent while revenue was up 49 percent -- and yet another record quarter for Steve and the gang. Mac sales were up 33 percent from a year ago with 2.94m units sold, iPhone sales were up 131 percent with 8.75m units sold, and iPod sales were down one point with 10.89m units sold. We're just about to jump on the analyst conference call, we'll let you know if we hear anything good -- we wonder what people might be asking about?
Oh, why not -- let's liveblog this thing. Follow along after the break at 5PM ET.
5:56PM And that's it! Seriously, no questions about the leak. Looks like the Apple lockdown is back in effect.
5:55PM Are your upcoming products enhancements to existing products or totally new stuff? Peter: You know, we're just not going to help our competitors out here.
5:54PM You said Apple was shocked about iPad sales in the US -- are there any customers that are completely new to Apple? Tim: Yes, but we won't tell you. Numbers are too small.
5:53PM Peter: We're not focused on making money with the App Store, just like the iTunes Store. We run them both at just over break even.
5:52PM Can you tell if iPad apps are awesome? Peter: They are awesome.
5:51PM Will the iPad be categorized by itself, or bundled in with some other categories on your sales and revenue numbers? We'll do the iPad as a line item, just like the iPhone.
5:50PM Hard to believe no one's actually asked about the leak yet -- we wonder if Apple prepped the analysts on the call and said they wouldn't address the issue.
5:48PM One of the drivers for iPad margins is accessory sales, do you agree that it'll be amazing and magical? Peter: Let's give it a little time, and we're assuming great things will happen there, just like the iPod.
5:44PM What about other tablets and ebooks? Tim: From my personal use, there's a variety of things the iPad does better than a phone or a laptop. Email, browsing, reading books, listening to music.
5:43PM Tim: To me, it's a no-brainer, iPad vs. netbook. It's like 200 to 0 -- I can't think of a single thing the netbook does better. I can't live without my iPad.
5:42PM Will iPad cannibalize other products Will it compete with netbooks? Tim: Although we announced the iPad in January, we didn't see any dips. We're thrilled with how the iPad is selling, and we'll just have to see. We're very happy with how the MacBook Pro line is positioned, though.
5:40PM What's up with Apple TV, yo? Tim: Units were up 33 percent, but the number itself was small and we still think of it as a hobby. Mac competes in a market of 300m a year, the iPhone in a market of 1.2b phones, and the iPod in a market of 100m music players -- the Apple TV isn't anything like that. But we still love it -- that's why it's a hobby.
5:39PM Have you learned anything from the international market? Tim: The smartphone category is a great market that's growing fast. The iPhone outgrew that market by three times, and our numbers were better outside the US than inside. We're getting better every day, and I'm not going to tell you how because I don't want anyone to copy that. (He really said that!)
5:37PM Apple's been aggressive defending its patent portfolio -- how should we think about legal expenses compared to operating expenses? Peter: Don't you worry your pretty little head.
5:36PM Can you talk about how you sell iPhones on a per-operator basis? Tim: Averaging sales per-operator isn't very meaningful. We drive overall iPhone demand by focusing on product innovation, like iPhone OS 4.0 and new hardware and new products. And great marketing.
5:35PM 25 stores will be open in China by 2011.
5:34PM What's the accounting treatment for the iPad -- are you deferring revenue like with the iPhone? Peter: We'll discuss that with you in the July call when we talk about iPad sales.
5:33PM Will you be open-minded about iPad pricing changes? Tim: The iPad is a great product and we have nothing to announce.
5:32PM What are the gross margins of the iPad? Are they dramatically lower, or are you doing more volume? Tim: We don't answer that question. But the iPad is a tremendous value, and the market size is very large. We want to capitalize on being the first mover, and we have a good track record at riding down the cost curve on manufacturing.
5:30PM Can you update us on your thinking about incremental distribution? Tim: There are three countries where Apple has an exclusive relationship with carriers -- the US, Germany, and Spain. We've moved markets from exclusive to not exclusive, and we see sales accelerate and marketshare improve, but that doesn't mean anything. We think carefully about each of these at the country level. Left unsaid: any words that rhyme with "Berizon."
5:27PM How are new carriers doing? Tim: Everyone is awesome.
5:26PM Is AT&T getting any better? Tim: They're working very hard, and they've made some good strides. He did not flash a V sign and yell "Go Big Red," much to our chagrin.
5:26PM Can you help us understand the economics of iAds? Peter: We're putting our toes in the water, so don't expect much from us this year.
5:25PM What's the deal with component pricing? Tim: The DRAM market is constrained and we expect higher prices.
5:24PM Tim, can you talk about the ability to produce the iPad and ramp up production? Tim: There's not a production problem, it's a good issue -- demand was stronger than we predicted and we pushed the international launch. I am a robot from the future, programmed to deflect all questions.
5:23PM Can you talk about the App Store and the addition of iPad apps at higher prices? Peter: We love the App Store, and so do customers. People also love the iPad. I am not answering this question.
5:22PM Revenue from China was $1b -- up nearly 200 percent from last year.
5:21PM Why is are iPhone sales so awesome? Tim: We're really good at managing the channel, and Asia / Pacfic, Japan, and Europe are all growing fast. Asia was up 494 percent. We also added new carriers like Vodafone and existing carrier partners performed strongly.
5:20PM A vague question about impacts on revenue, with a vague reference to "maybe a future iPhone transition." Very clever. Peter O's not buying it, and talking about how Apple's existing products are doing well and says that "we'll report to you in July" about how the iPhone is selling. Nice dodge.
5:17PM No data on the mix between WiFi and 3G iPad sales -- too early to tell.
5:17PM Followup from Gene: Do you think people held off on buying a Mac earlier in order to buy a Mac? Tim: You're comparing to a quarter in which we launched two new Macs, I don't think it works like that.
5:16PM Translation: People love buying things from us.
5:15PM Gene Munster on the line, asking about the iPad. Calling it the "Mac of the masses." What's the impact of the iPad on demand for Macs? Tim Cook: No obvious impact on the Mac or the iPod -- you can look at the numbers and judge for yourself.
5:14PM Okay, question time. Wonder who'll brave these waters?
5:14PM Tim just mentioned a "future product transition" -- ha!
5:13PM Apple said it has another $1b in the bank -- we were fixing the time zone while they talked about that.
5:10PM They'll open 40-50 new stores in 2010, including Paris, London, and Shanghai.
5:10PM Mac sales in the stores were up 38 percent, about half to people who've never owned a Mac before. Average of 204 stores open, with an average revenue of $5.7m. 47m visitors in the stores.
5:08PM iPhone sales are up 131 percent, as we knew. iPhone handset sales, accessory sales, and carrier sales was $5.75b, on an average phone price of around $600. 151 carriers in 81 countries -- growth is strong in Asia, Australia, Japan and Europe.
5:06PM Going over sales figures -- iPod touch sales are up 66 percent, and iPod revenue is up 12 percent. iPods are still the best selling MP3 player and doing well around the world. iTunes Store did $1.1b in sales.
5:04PM Tim is on, giving a summary of the PR. Record quarter, new record for Mac sales, more than a doubling of iPhone sales, Apple is the captain of the football team and just got an A+ in the school play.
5:03PM Okay, we're starting. We're mostly liveblogging this in order to stay awake, because Tim Cook and Peter Oppenheimer have incredibly soothing voices that have lulled us to sleep more than once. Either that, or numbers, financial data, and non-answers are extremely boring.
5:00PM Hey, is this thing on?