As Apple’s second-quarter 2013 financial results conference call began, Apple CEO Tim Cook announced first half revenue of more than $98 billion, and net income of more than $22 billion, including sales of 85 million iPhones and iPads. He acknowledged Apple’s growth rate has slowed from a high level. Cook mentioned “the potential of exciting new product categories” when looking at the future of Apple. He also mentioned “amazing new hardware that we can’t wait to introduce” in the fall.
Cook said Apple remains committed to make attractive returns to shareholders, as the company has more than doubled the size of the capital return program to a total of $100 billion by the end of 2015. The company also approved a 15 percent increase in the stock dividend.
Apple CFO Peter Oppenheimer mentioned new March records for iPhone and iPad sales and detailed the numbers.
iPad sales doubled in greater China and Japan. The “overwhelming majority” of iPad mini users are first-time iPad customers, Oppenheimer said. He also touched on the iPad’s spread into emerging markets. iPad accounted for 82 percent of all North American tablet web traffic in March, he said.
Oppenheimer mentioned iPods, but while listing the device’s dropping sales numbers, he focused on the iPod market share among MP3 players.
As for iTunes sales, Oppenheimer reports more than $4 billion in combined revenue from iTunes, software and services. Also, he said that in total, app developers have made more than $9 billion from their sales through the App Store.
Also, iCloud now has 300 million daily users. “We will continue to invest in the ecosystem,” Oppenheimer said, with more features “in the pipeline.”
Oppenheimer spent some time detailing Apple’s stock buyback and dividend increase.
In the Q&A, Cook was asked if Apple was “hitting a wall” in China. “We actually had our best quarter ever in greater China,” Cook said, with revenue of $8.8 billion. Notably, iPads grew 138 percent year-over-year in China. “Going forward we still see a significant opportunity in China,” Cook said. “China has an unusually large number of potential first-time smartphone buyers, and that’s not lost on us.”
As for Cook’s allusion to fall announcements of products and whether or not that means there will be no new Apple products until the fall, Cook said, “I don’t want to be more specific…I’m just saying we’ve got some really great stuff coming in the fall and all of 2014.”
Cook touched on how the iPhone 4 was now even more affordable and attractive to first-time buyers, which allows more people to get into “the ecosystem with a really, really phenomenal product.”
Apple doesn’t want to forecast gross margin beyond June, Oppenheimer said.