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Notes from Apple’s Q1 2013 Conference Call

During Apple’s first quarter 2013 financial results conference call, Apple CEO Tim Cook and CFO Peter Oppenheimer made a number of comments related to Apple’s iPhone, iPad, and iPod businesses. The comments ranged from discussions of the iPhone 5 and iPad mini’s sales and manufacturing constraints, to continued iPad cannibalization of Mac computer sales, to the Apple TV.

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Apple Q1 2013: 47.8m iPhones, 22.9m iPads, 12.7m iPods

Reporting its first quarter 2013 financial results today, Apple said it sold 47.8 million iPhones in the quarter, a 29 percent increase year-over-year, and up considerably from 26.9 million units in the prior quarter. Apple sold 22.9 million iPads during the quarter, up 49 percent from the year-ago quarter and up 8.9 million units in the fourth quarter of 2012. Finally, the company said it sold 12.7 million iPods during the quarter — an 18 percent decrease compared to the same quarter last year. Unit sales of iPhones, iPads, and iPods bring the cumulative totals for the three device categories to 318.8 million, 120.98 million, and 369.08 million, respectively.

In what the company says was its best quarter ever for both revenues and net profits, Apple posted revenue of $54.45 billion and net quarterly profit of $13.1 billion, or $13.81 per diluted share, compared with revenue of $46.33 billion and net quarterly profit of $13.06 billion, or $13.87 per diluted share in Q1 2012. Revenue from iTunes/Software/Services—previously known as Other Music Related Products and Services—which includes revenue from the iTunes Store, App Store, and iBookstore, was $3.687 billion for the quarter, up 22 percent year-over-year and 5 percent from the prior quarter. It is being separated from revenues from Apple-branded and third-party iPod accessories, which accounted for $1.829 billion in the quarter, up 25% year over year and 46% over the prior quarter. Apple’s Board of Directors also declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on February 14, 2013, to shareholders of record as of the close of business on February 11, 2013.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO, suggesting that the company sold at least 4.3 million iPod touches in addition to the quarter’s 70.7 million iPads and iPhones. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

“We’re pleased to have generated over $23 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple’s CFO. “We established new all-time quarterly records for iPhone and iPad sales, significantly broadened our ecosystem, and generated Apple’s highest quarterly revenue ever.

Verizon had Siri exclusive on Android before Apple

Verizon had a deal to make Siri available as a default app on Android phones before Apple moved in to buy the virtual assistant, a new report has revealed. Verizon signed a deal with the development team behind Siri in fall 2009, but when Apple bought Siri, the company insisted on making Siri exclusive to its own devices, and voided the Verizon deal. Under the prior contract, Siri would have been included on all Android phones launching in 2010, and Verizon even created commercials touting the new feature. The report, which deals with the history of Siri, also notes how Siri’s co-founders discussed the virtual assistant with Steve Jobs in his home prior to making the deal with Apple—saying that the company’s speech processing technology had cracked a long-time goal of Jobs and former Apple SVP Scott Forstall—among other notable details. [via Huffington Post]

Jobs threatened lawsuit to prevent Palm poaching

Apple co-founder Steve Jobs threatened to file a patent lawsuit against Palm if the company didn’t agree to stop hiring Apple employees, a new court filing has confirmed. The filing is part of a civil lawsuit filed by workers against Apple, Google, Intel, Adobe, Disney’s Pixar, Intuit, and Lucasfilm, which claims the companies agreed not to recruit each other’s employees, in violation of laws designed to protect employees against restrictive hiring practices. In a statement, former Palm CEO Edward Colligan said that Jobs called him in August 2007 regarding Palm’s hiring of Apple employees. Jobs also sent an email advising Colligan to “take a look at our patent portfolio before you make a final decision here,” bullying that Colligan allegedly rebuffed based on its alleged illegality. The document suggests that Palm’s hiring of Apple employees for a new Jon Rubenstein project was Jobs’ primary concern; former Apple SVP Rubenstein went on to develop the Pre phone and TouchPad tablet for Palm and later owner HP. Other communications and internal documents, including no-hire lists, have also been revealed in the case. [via Reuters, The Verge]

Apple to open online store in Indonesia

Apple has been approved to open an online store in Indonesia by the Indonesia Investment Coordinating Board, according to a report. The store will be based in Jakarta, the capital city of Indonesia, as Apple looks to expand its reach; with over 238 million people spread across a remarkable 17,500 islands, Indonesia is the world’s fourth-most populous country. Currently, the Apple Store’s Indonesia page directs to resellers and Apple Stores in other countries. It’s also noted in the report that Foxconn plans to build a manufacturing plant in Indonesia. [via NZweek]

Rumor: Apple plans 4.8” iPhone, another by Christmas?

Apple will announce three new iPhone models this year, according to a questionable new report from China and Taiwan. There will be a 4-inch-screened iPhone 5S and a supposedly larger-screened 4.8-inch “iPhone Math” model before the end of June, while a third model with a 12-megapixel camera will arrive before Christmas, the report claims. There have already been rumors of an iPhone 5S, as well as a new low-end iPhone model, but iPhone Math seems almost certain to be a bad translation—and the supposedly larger screen size is equally questionable. This new report also claims Apple will launch iTV before year’s end. While the report should be taken with extra grains of salt, it’s interesting in that it is the first to suggest that Apple may have two separate iPhone release events this year, which could spook some potential early adopters into waiting. [via China Times and Commercial Times (Taiwan), as translated by Brightwire]

Apple CEO Cook to give deposition in antitrust case

Apple CEO Tim Cook has been ordered to give a deposition in a lawsuit that claims Apple and other companies violated antitrust laws. The private lawsuit claims the companies — which also include Google, Intel, Adobe, Disney’s Pixar, Intuit, and Lucasfilm — agreed not to recruit each other’s employees. U.S. District Judge Lucy Koh issued the order Thursday. According to a report, “Koh told lawyers yesterday that Apple founder Steve Jobs was copied on e-mails at issue in the case, and that she found it ‘hard to believe’ that Cook, as Apple’s chief operating officer at the time in question, wouldn’t have been consulted about such agreements.” [via Bloomberg]

Report: Sharp slashes 9.7” iPad screen production

Sharp has “nearly halted” production of 9.7-inch iPad screens, according to a report. Screen production is now at “the minimal level to keep the line running.” The report initially mentions a demand shift to Apple’s iPad mini, but later notes sources “didn’t say how much of the slowdown was due to seasonal changes in demand or consumers opting for the smaller iPad mini and were unable to characterize Apple’s overall tablet sales.” Sharp’s Miyuki Nakayama said, “We don’t disclose production levels.” A source at LG Display — Apple’s biggest supplier — said its decreased production was mostly due to typical weak post-holiday demand.  Apple did not comment. [via Reuters]

Newsstand offers Hearst magazines first, before print

Hearst Magazines has announced that new issues of its various publications will be made available to subscribers in Apple’s Newsstand before appearing in print or any other digital edition. The 20 magazines include Esquire, Cosmopolitan, Car and Driver, Good Housekeeping, and Woman’s Day, among others. A report notes that each publication differs in how far it will be released ahead of other editions, but each will appear at least a “few days in advance” of its print counterpart. [via TechCrunch]

Apple job posting hints at Siri’s future evolution

An Apple job posting for a Siri Writer/Editor position sheds some light on how Apple may be planning to evolve Siri in the future. Apple seeks a writer with “demonstrated experience in writing character-driven dialog,” and the job description expects a successful candidate to “refresh and refine existing Siri dialog,” “Ensure the consistency and quality of Siri dialog from all sources,” and to “Help the Siri team evolve Siri as a distinct, recognizable character.” Siri, which was taken over by Eddy Cue after Scott Forstall was let go, seems to be moving forward with a strong emphasis on originality, as well as functionality. [via 9to5Mac]

Facebook Messenger launches free calling for US iPhone users

Facebook Messenger now offers free calling, as the feature has made its way to US iPhone users. The standalone Facebook app allows users to open a conversation with another Messenger user by opening a conversation, tapping the “i” button, and then tapping the new Free Call button. The calls are free using Wi-Fi or the iPhone’s data connection. The VoIP calling service was announced as a new feature about two weeks ago. An App Store update is not needed to start making calls. [via The Verge]

Dutch court: Samsung tablets don’t infringe Apple design

A Dutch court has ruled that three Samsung Galaxy tablets do not infringe an Apple design, citing previous British court decisions. The ruling involves rounded corners on the tablets. Apple lost a tablet design infringement case in the UK and was required by law to post ads stating that Samsung did not infringe on its designs. [via Reuters]

AT&T allows FaceTime over Cellular on tiered data plans

AT&T has announced it has enabled FaceTime over Cellular at no extra charge for customers using any tiered data plan and a compatible iOS device. Customers with an iPhone 4S and a tiered data plan will now be able to make FaceTime calls on the AT&T network. After initially limiting FaceTime over Cellular to specific shared data plans, AT&T later announced it would allow customers with a tiered data plan and LTE device to use the service. This new announcement removes the LTE device requirement. Now, only users with grandfathered unlimited data plans will be left out. The update should be rolled out “in the next couple of weeks.”

Apple Retail VP Jerry McDougal resigns

Jerry McDougal, Apple’s Vice President of Retail, has left the company. Reports say McDougal left to spend more time with his family. McDougal is the latest in a growing line of executives that have left the company in recent months — that list includes Senior Vice President of Retail John Browett, who was let go in late October. Many believed McDougal had a chance at replacing Browett, which obviously won’t be happening now. Jim Bean, former Apple VP of Finance, will replace McDougal. The company continues to search for a replacement for Browett.
[via ifoAppleStore.com, AllThingsD]

Apple, Amazon set for settlement talks in ‘Appstore’ case

Apple and Amazon have been ordered to hold settlement talks to resolve the ongoing case in which Apple is claiming trademark infringement for Amazon’s use of the term “Appstore.” The companies will meet on March 21 in an attempt to settle, before reaching a trial in August. A few weeks ago, Apple’s false advertising claim against Amazon for use of the term was dismissed. [via Bloomberg]

Apple shareholders meeting scheduled for Feb. 27

Apple will hold its annual shareholder meeting at 9 a.m. Pacific, Feb. 27, according to a filing with the U.S. Securities and Exchange Commission. The meeting will be held at the company’s Cupertino headquarters. Proposals up for a vote include the election of Apple’s board of directors, an advisory vote on executive compensation, ratification of Ernst & Young as the company’s independent accounting firm, and two shareholder proposals — one requiring executives to hold onto a percentage of shares until normal retirement age, the other regarding the establishment of a Board Committee on Human Rights. Apple’s board opposes both proposals. Also, a proposed amendment would establish a “par value” of $0.0001 per share for Apple common stock, among other measures. [via Apple Insider]

Next iPhone rumors: 5S and low-cost phones

A couple of new iPhone rumors suggest Apple could be looking to release both high-end and low-end models this year, while the iPhone 5 remains in the middle. Analyst Peter Misek has suggested that the iPhone 5S will go through preliminary builds in March, with a launch in June or July, less than a year after the iPhone 5 debuted. Originating from Asian part suppliers, a second report claims that a recently rumored lower-cost iPhone could include a plastic chassis, or a plastic-and-metal chassis designed such that parts might be seen from the outside — a rumored launch date for this model is sometime in the second half of this year. While the rumors should be taken with requisite grains of salt, particularly when they come from analysts, the rumors follow Friday’s withdrawn report regarding Apple Senior VP Phil Schiller’s comments on a cheaper iPhone—a withdrawal that has been taken to suggest that the company is indeed pursuing a new affordable model. iLounge’s own sources suggest that Apple hopes to release a less expensive version of the iPhone 5, featuring such components as a Lightning connector and 4” screen.
[via Street Insider, Digitimes]

Belgian consumer group files AppleCare complaint

Belgian consumer watchdog agency Test-Aankoop/Test-Achats has filed a complaint against Apple for the company’s warranty practices. The complaint is over Apple’s marketing of its AppleCare, which the watchdog group believes is being marketed to consumers without Apple properly explaining consumer rights. EU customers are already entitled to a free two-year warranty of any consumer electronics purchase. Apple has been fined twice in Italy over similar complaints, most recently in December for $264,000, and in December 2011 for about $1.2 million. The Belgian complaint mentions the first Italian fine as a precedent. [via TechCrunch]

Apple to release iPad mini, fourth-gen iPad in China on Friday

Apple has announced that the Wi-Fi + Cellular versions of the iPad mini and fourth-generation iPad will be available in China on Friday. Both iPads will be available through Apple retail stores, the Apple online store, and select Apple Authorized Resellers. The Wi-Fi versions of the iPad mini and fourth-generation iPad went on sale in China on Dec. 7, with plans to release the cellular models within a month; Apple CEO Tim Cook personally traveled to China to speak with leading cellular providers before the announcement was made.

iOS 6.1 release imminent?

The release of iOS 6.1 could be coming soon, suggests a recent report. Apple’s fifth beta version of 6.1 — which is undergoing “extensive internal testing,” and deals mostly with bug fixes and optimizations — may wind up being the gold master build. If everything remains on track, this version will be released to developers shortly, followed by a public release. [via iFun (translated link)]

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