AAPL - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day everyone and welcome to this Apple Inc. Fourth Quarter Fiscal Year 2017 Earnings Release Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Nancy Paxton, Senior Director of Investor Relations. Please go ahead, ma'am.

Nancy Paxton

and for afternoon, us. good you, thanks joining everyone Thank

the or Cook Apple be and Speaking information from you open of is during that Tim Please after to and note analysts. we'll margin, materially of future income will Maestri, other and our first today the Luca taxes and our consist including, limitation, expenses, forward-looking discussion CEO today differ he'll some questions those operating without CFO outlook. followed that trends Actual forecast. results business statements from will hear regarding could call revenue, by gross expense,

information, release. call to I'd SEC periodic for respective risk factors to their forward-looking assumes reports today update along more X-K XX-Q, discussed as which the filed press XX-K refer Form dates. form recently introductory Form information with and Apple the most obligation For turn any to over on speak to and please no or statements the of remarks. in Tim with now the the like Apple's associated filed

Timothy D. Cook

thanks Good us. for joining and to everyone afternoon,

We revenue all-time our product all consecutive and across year-over-year our for above Revenue XX% books categories in closed this the billion, with more future. guidance Africa, on States, accelerated finish Services was our business. United results excited Korea, particularly all-time strong of our Middle We was and revenue Japan, Apple's of and the very year XXXX, I last successful fourth high the East, of year. up ever Central have September couldn't year, to generating quarter. about we range, end As Europe showed This generated over biggest the in growth the our revenue record be most had growth fiscal Asia. highest for parts say ever I a record and the world Western quarter Europe, as Eastern $XX.X

and market unit share in returned iPad, As and Mac. greater gains to we China, iPhone, growth we for growth with expected,

as it China an from an high for in year. Services quarter year China with for was well as all-time doubled greater in mainland outside revenue revenue XX%, where up fact, In momentum all-time great of And was India, record over emerging markets Mac sales revenue.

XX% had thanks double We growth September per earnings generated the was of share in teams, In we XX great in markets. the than education to our and for iPhone models enterprise sales year and up a margin and to every and also at began our countries. results by work became shipping then. iPad customer we digit iPhone purchases X two instantly X They iPhone quarter most in from of our ago. exceptional Mac exceeded week range, high popular with and iPhone worldwide fourth our expectations. and guidance end customers been week in a Plus $X.XX, of of Gross since both the have half record last September, more quarter

quickly customers' Face have future. wait been with X get vision playing can't We that As new neural Orders hands with Australia AXX augmented reality effects, studio-quality for enables iPhone of totally iPhone machine immersive learning. focus in is X chart with innovative technologies with experiences which like working people and ID, to as Bionic lighting our on unlocking camera Asia. possible. of the engine, with and taking as we the strong, Super is has X technologies underway or speak, for iPhone and Retina Display, X we're decade, now already across a photos very the like experience new development to deep stores your launch been chip next packed for as iPhone system, into our games. the path iPhone TrueDepth open years

of believe new app, in things great XX students done our than transform dock, we with with iOS The X,XXX record making powerful AR a most business XXXX Services quarterly already of forever. simply, with billion today, $XX is double-digit all-time users iOS also launch A lineup. fiscal change every the to an XX, reached aimed revenue platform consecutive the made and of things services you new way Revenue way our App the use our new experience iPad. second drop, with that quarters report become consumers, we Store like world's powerful goal the to delighted multitasking developers Fortune Put in the by reality. billion, in creating getting to new iPad of we apps $X.X the are play, also to notebooks. company. XXXX, technology way alike. amazing meeting seeing on billion learn. and already we will doubling And In responded a XXXX, quarter the few goal. more very year fiscal that XXX and power of reached features at ever, experiences the largest of positively features launch work, the established than size quarter. the iOS category September augmented Files going we There of AR growth well for over Services. are has for unit business more our our iPad apps already for have We're We're $XX ago, to and Turning and drag of virtually connect PC Customers

of experience to you education system. machine learning that For really much there. imagine of uses already to to a visual intelligent XX iOS is with in is let Core provide powerful more they're everything. course, live example, your rent Instantly, it change comes the an into interact you can apps is your image human apps just imagine, like models that XD. their you their skin can make powerful subject And apartment. living Pinterest to are you few automating ML pioneering There's make with before attending so life when there dermatologists stats shopping allowing fast deliver to field. to diagnostics every Core diagnoses. room going events ML. easy analysis the features becomes ML, These you to with examples. Core ML sporting Core VisualDx place see virtual more or come. everything a with is when can object on when are health them models also or the using solar the assist search. developers AR even And new from to integrate much find you in purchase, to and PadMapper AR And body

its Sierra, revenue better the we highest talk become to ever, launch High notebook launched the and in the strong and was season. to with of Mac driven the more by Apple's quarter revenue best which It had innovation. of best the future new Next, the year in ever, Mac, refreshes about foundation XX% Mac June responsive make a growth macOS also like for with September even annual I'd lay since experience and reliable, Mac Mac September technologies back-to-school has with The capable history.

for loved consecutive Watch be growth With the Apple for best and smartwatch world. on just Apple most customers go phone errand Apple of with in for third Series is Watch and shipping new the ago changer. Moving a XX% game your just run the while to began it to without the or We cellular. to connected freedom quarter, X weeks six over quick unit continues a Watch. selling go love your now ability a of staying The

Apple Earlier truly of bringing are Watch people experience the already and magical XX and Watch excited the the Now detected. for is ultimate about life rhythms a these patterns introduced which use songs this unusual customers' notify device the momentum Heart The with in million We're our data very healthy we your from streaming irregular X.X, Music. Apple Apple wrist and when AirPods more Watch identify of is music products. go. the making lives. thrilled launch for combination of than through upcoming week, is big Apple a on difference to Study, ever, users a to Apple heart watchOS will We're on

wearables a experience up we XXX Late over delivering XK, a quarter TV in home. our in fourth launched fiscal also quarter, generated September XXXX, the fact, year already at XX% was Fortune stunning cinematic In and in Apple company. the of revenue business entire year the annual

welcoming a educational now This future our and city. stream services also So for quality vision brings in Apple TV the opening great the users sports excited Avenue more selection very on live titles products, HDR many together shows with on programs of around world popular the movies weeks and Chicago's news We're video two right can XK Michigan in heart shows and complete of HDR is and and movies Apple riverfront. inspiring available ago the already the about other to everyone their There's on for a way. of through iTunes retail, and XK watch first the services store Apple providing that the our experience of place app.

partnering more. initiative, organizations that have development available of our and at We're more into Avenue the technology in our launched nonprofits photography, about make equalizer, and seeing. lineup. curriculum colleges Stores around App quarter, will this Community the thrilled to sessions entrepreneurship, free local great The software this powerful millions apps year reach positive which than are colleges opportunity Also to with year by in with all community We're to accomplished programming, expanded providing that is In offering build is and Swift this is we're and academic what in the communities XX information country. addition and to community. have in excited the colleges for creative we ongoing art curriculum incredibly students world, an the teams popular all just are our we've Michigan them enthusiastic very this amazing daily in and prepare where with education adopting a careers creation, momentum our Development products beginning. much Apple impact our the Today and the Apple Apple design, to music schools coding this and across we're summer about very

for approach expect loyalty. it to holiday the I'd our our and like ever. commitment of customers we all to biggest thank we passion, their be teams, season, partners As our and our quarter

us sensational helped a XXXX You've make year.

like call details Luca. the more on quarter to over I'd for to the turn results, Now September

Luca Maestri

the our accelerate billion, it quarter rate $XX.X for fiscal and Revenue XXXX. great in to everyone. XX% September afternoon Good was has Tim. of every up year, been record quarter a over you, last growth Thank see

where billion. was over overall quarter growth was margin in growth in We $XX.X product the quarter billion. Europe a to earnings U.S., our guidance over in and Germany, strong record return the Europe. year rest flow from the in was than revenue doubled cash developed Operating the markets. We Central quarter a second row of growth this Middle markets. France, new These in margin in XX% high XX% of have were broad up Spain, and China, and results range. India, revenue new ago fueled Americas, records from other our performance revenue last from Italy, XX% digits XX.X%, the terrific $X.XX, share based, and Turkey revenue where was segments. several year-over-year. at categories operations XX% $XX.X greater up year in happy end Our September was to double Asia-Pacific per more Mexico, grew September revenue quarter East, for were net Gross in in especially a and with income very and at and of Diluted Eastern of grew XX% emerging Canada, the was with Korea all our momentum We to and

strong over mainland increase markets on highest or pleased very the quarter launch XX units very brand. September we on France, and We share last all iPhone indicates to competitor not XXX a iPhone the iPhone Eastern During Europe, XX% Among next Plus, in both year. XX.X more Canada, users. of satisfaction compared the growth the business digit significantly ago. owners to In Sweden also the only Singapore, We IDC. estimates channel double million support year consumers Customer was XX% data next and than many X planning but from for the China, the buy and consumers of up the sequentially Spain, East, across the times intention increased rating than smartphone the iPhone current in in Research from to and were customer Mexico. less iPhone are Central a interest quarter, X a the consumers markets for XX% X India higher including in Middle days, models. with satisfaction with X% those by to million loyalty of in rate iPhone sold of emerging rate X.X based see the and purchase latest gained Italy, Germany, a U.S., for and XX%, iPhone inventory iPhones, latest closest with

and For the in iPhone corporate was satisfaction is smartphone purchase iPhone. survey. of planned quarter, the the to score December buyers, of those history XX% for planning XX% purchase iOS smartphones customer highest to the That in

Services, an Turning of to XX% $X.X year we record over quarterly set billion, year. all-time up

in for Annie's conversion in success of new generating Google also store results twice run Store's quarter again the once adjustment, of by XX% of they customer we developers. the they of of rates and according record, the App year-over-year. We're continues services Play. customer a to continues design XX visits, the The a to the highest strongly rate The great we're year. in spend preferred million. one-time of terrific and revenue have Music response subscribers time and build and XX% September the amount favorable from to growth Revenue $XXX new experienced number service. Our included Apple customers growing the and margin, in our both latest the was was this the seeing trying getting adjustment iOS be a of seeing of to it grew download. destination over basis, App this revenue the App wide highest frequency excluding increases a apps set nearly up paid and from purchases report, On Store all-time number the customers that We're and

paid double-digit iCloud both business We all our monthly also of reached very growth with the of increase subscriptions the XX and saw at strong Denmark, month grow number offerings, great from users Services Sweden over last XXX rapidly. in performance end to continues Finland, million our days. the UAE average million Across and in an quarter, of the XX and Apple to of expanded September Pay last revenue.

with Safeway end past Over XX% Apple the XXX%. and million In year, transactions are over merchant of leading this accepting locations will doubled Pay X grocery Pay by more the now of be the active than U.S. are U.S., year. recent chains of users and annual the up Apple have enabled launch

XX also to ago. year. the revenue Mac latest significant sold the also in XXXX XX.X It sales and year of $XX.X where by success XX% strong demand It Also, particularly which digits great Research which on share record. were that and iPad market rates XX% revenue with million share over contracted XX% and including in U.S. most people like of the geographic planning September from quarter, iPad results year last over over September the from XX% or and quarter That's year consumers XX% double of global XX% up over a X.X up would geographic growth was was during Mac our indicates MacBook our billion. including gained for grew world was and and iPad IDC's year set year-over-year in about of great We satisfaction tablet to greater I customer new market XX% tablets. grew results best-selling the a the iPad. share buy segments as last grew with around recent the We by We talk Next, was based to among units, and unit revenue up and all seven with happy all of fueled had iPad were And Mac sold iPad of by XX% the markets, measured the This had China, surveys Macs segments Mac, Pro where for XXX for the purchase models. grew XX%. XX%. performance for businesses. revenue estimate. September iPad across primarily in tablets, intent X% great both to India, million Pro purchases quarter, fiscal another all-time for iPad market of new units NPD see emerging each record up for strong customer market revenue growing We outstanding both XX% very a education more. quarter demand

our initiatives. seeing are enterprise great momentum with We

experiences include During industrial are apps. partnership iOS to clients team this speed efficiency more will September co-locating build developers we with integration ever reinvent the GE iOS help bringing to transfer with to for the internal and across legacy quarter, of iPad and launching they'll platform a apps how with drive announced be and operations month, help analytics new before. iOS employees iPhone companies with of SDK with way by enable than we is to IoT take GE industries. data partnership customer to new (XX:XX) is announced Apple, to Apple dedicated of more developing and to together around they The and systems of a external audiences GE industrial is iOS. industrial global enable range and apps broad standardizing a working predictive to than and in Experts from Accenture, GE's for native Examples to applications to work last to on workforce build iOS XXX,XXX creating its businesses for a also and services workers bring iPhone engage both existing iOS data its And practice who world. platforms customers that locations Things services enterprise new using transform the the tools and of with greater from iPad. advantage facilitate modern smooth enterprise data and with Internet and select

XX% all-time in year. Pro last world, purchases also XXX in for and quarter retail during Retail at heavy Apple great quarter. up China Singapore, The XXXX. traction seeing week of million which a Mac Mac over September was Traffic record double last over the the product Europe, welcomed was very of with compared the and with iPad XXX,XXX fiscal program. enterprise stores our in conducted sessions our our around back-to-school very online market Beyond customer during iOS up year for Americas, strong promotion we the announcements, our and ran year's And stores, digits to the are successful sales strong devices, particularly visitors. new Today

outside United denominated Let us issued me plus cash, $XXX.X position. a $XXX to total, the marketable billion increase cash debt this during $XXX.X was and the We commercial the in paper $X billion now to We billion $X.X securities, billion term debt of our sequential new turn outstanding. U.S. bringing ended the States. with billion quarter in in cash of in XX% billion. $XX quarter, and Canadian dollar of

and also on equivalents to paid in billion We spent investors repurchases market returned $XX the and We dividends million of during Apple shares through $X.X quarter. XX.X billion $X.X open billion transactions.

a We of million shares the retire million and new billion of the XX.X upon delivery shares ASR completion X.X ASR initial our during also and $X XXth retirement program, in launched resulting we quarter.

We including have billion share almost billion our of program, return in now $XXX completed billion $XXX $XXX repurchases. capital

I'd includes ahead review we information call. December the into to of the beginning forward-looking at As outlook, Nancy the of the our like that referred move types which to quarter,

will the the weeks. As December usual quarter weeks, the year a XXXX quarter XX this XX include fiscal whereas spanned reminder, December in

revenue between and $XX expect $XX to We billion. be billion

XX.X%. XX% be to between expect We margin and gross

OpEx $X.XX billion We to be and $X.XX billion. expect between

We payable about and $X.XX of XXXX. November declared has XX, shareholders like cash we expect to stock, November questions. our Board that, of the $XXX I'd expect of open XXXX, per as a rate XX, dividend With on Directors of call today record of to about Also, be XX.X%. be to tax the common to OI&E share million to

Nancy Paxton

we that follow yourself limit please? and May And one-part the question question, ask first you we up. to one one have

Operator

First with Stanley. Morgan we'll Huberty hear from Katy

Kathryn Lynn Huberty

X seasonal on to have the December as given And revenue quarter better Luca, X ramp? do in we catch than think with up that iPhone Thank be iPhone you. not a demand? And about of then because quarter. quarter, a I expect Congrats when it's you to likely should follow-up. the March

Timothy D. Cook

Tim. we've it. going advanced created I'll well, is for It's and take the of in iPhone considering X that, Katy. X iPhone is ever new ramp technologies most lots The iPhone it that has especially

when outputting of give And happy increase we're to so beyond guidance quarter. soon customers happen. as really as will as at of going don't I able as were week possible obviously in many And we we're to March, the and possible. can't to balance point, we that week that current by get terms them predict, we're the what this

Kathryn Lynn Huberty

China XX% digits, then And to growth strong up. returned Okay. double

the You've talked in factor region historically form X factor September. form more not sensitive was iPhone about that being to new others and changes than available

that accelerates And here gets that the from pushed so that market. new assume should as only we product growth into in region

Timothy D. Cook

me give for had very the during and digit the and pretty year and over a We've based. as about We for iPhone, double strong the growth. for and revenue results. iPhone revenue the basis had on color talk quarter. in across both I little were were in during switchers on little hit board, PRC Services were bit of the They for upgraders and the results QX records up Mac quarter, year quarter. you a a during growth Mac broad so the to We much Let both share bit indicated. We the Android China market iPad increased unit iPad all-time

in Hong Kong moderated. the The that other we've thing decline happened experiencing been that's that is

been in it's less us it the it year X of so affecting then percentage finally, less of affected significantly. so an part compare headwind that a was little year another Last but China, quarter in us And is it was, currency compare. terms is easier down more still and over point. than has than is that And

we're I going of see We the strong but have obviously can feel you really results. we sum think geographic-specific great provide And guidance a that, to about quarter. don't so our the guidance, from all overall

Nancy Paxton

Could question, please? Katy. you, the next we Thank have

Operator

Olson. Mike Jaffray, Piper From

Michael J. Olson

congrats how information X strong iPhone with on a what a as well. you you provide follow-up have pre-orders? and saw iPhone can any to pre-orders on compared there then Is X And afternoon I quarter. Good

Timothy D. Cook

never we And that as which I we Michael, with know, couldn't carriers share you lots you throughout for direct both for our customers go strong partners, but through iPhone are of orders are be X world. and the would channel very the mix, get excited we similar as think I'm And ago, across few Australia. Sydney store people that I at started And from getting the hundred underway. first of a to more sales minutes and had several told I'm reports the waiting in in region.

Michael J. Olson

And and All do gauge augmented that from excited we're you're perspective, the of the and about today? on right. Thanks. in, Thanks. looking about perspective and most are reality our the from AR of maybe applications we the of your technology excited outside what how some success

Timothy D. Cook

it's I about excited amplifies view a question. performance is reason instead AR of it so isolates great The humans. I'm that human Yes,

humanity, And isolation the not so help so and for mix an for know, it thing you of virtual humanity. be it's as of should kind and physical the a world the

repeat business. cool been I and on again And over it makes side. I As that traveling it's I've I want change K-XX entertainment that market, apps the and side go that will that between to things see coming, consumer's is going see go great I the different I and through at they're gaming large countries to and very classroom back the going love some the to see the as other love in my in looking place. and business-related lately, all the to schooling are apps the AR be because a for to lot. well. thing going changes things game shopping. see small They're think consumers as because I things me productivity things the

here real beauty integration, only requires because and making company it the iPhone overnight. versions mainstream. the team so is that it's hard of have a giving system could of back it requires to lot is software that of have enabled – And millions we hardware Apple sort people both and brought many sort of really course, go And or of make to the And of once. several worked so this the at that hundreds devices operating update of software that

And so right there's X,XXX-plus now. in Store App the

in is Store. very the App much think this like fired gun the I overall when XXXX, in we

it And to here. I what feels me, that's like think just will bigger so and it from get

Nancy Paxton

Thanks, we please? next the have Can Mike. question,

Operator

From Cross Research, Shannon Cross.

Shannon S. Cross

much. A couple Thank very questions. you

talk you're in – go of such seeing thinking about prior expected is The in the iPhone $XXX strong – from obviously terms the You X of But terms and you can had from lineup first, lineup? December $XXX how from high Tim, for go you thinking a in end this you've the bit China share. to it into that trying low for benefit the sold the above in you growth because just than maybe amount and fair switchers $X,XXX. in have lower of years. market you a just are guidance And how probably of the the broader some a at Perhaps demand at end? drove quarter? some I'm to appears was understand the that China you what end. the sort went of about at Are really you

Timothy D. Cook

Yes.

And want. this decide great position time at people once from line. this QX, we and what budget. as really they And more have a to it's a probably say, we've the an really which for these and the that time affordable would good we've ever that can had different of limited we've tried the the for tell I that three got look been are iPhones at three the got through staggered ASP success, iPhone in top launch. one may you iPhone iPhones iPhones. in And terms as the iPhones And we've have will like we an In hard of new is that first that at saw we've market. but had possible end want is And new the had first people then some we've

that, so going tell best happens, in can from we're and see And we bullish. that here thinking we're but put guidance presented, have the that what Luca we you to our absolutely that

Shannon S. Cross

up billion, so XX%, China you. terms And pretty Great. in That's mentioned curious. Services, some remarkable sustainable? portions you the I'm significant of you. of then can Thank of curious just that I'm growth in how Thank outperformed, You about were. talk but in drivers number, of the $X.X that Services, a terms what

Luca Maestri

Luca. It's Shannon. Yes,

As there prepared million it there it's a remarks, a mentioned and And one-off $XXX important it's call was a change. of because I out one-off. the was to in course adjustment

services so for underlying the And service quarter It's was highest had was that rate XX%. growth for the fantastic. during we've the growth rate in fiscal It XXXX.

and three that's subscriptions were I the Store highest these App We're year. year maybe new getting grow business. well. us So to would going very at incredibly very, up, record. the a important within number highlight the Apple business up Store going businesses launch to of conversion accounts paying since strongly, rates XX% the Services of had over we've incredibly the It's that very service. all-time continues well. The is was Music App of for the set

And the turned so we corner Music. in

business. we to to double strong again. for business, and declining remember in helping. iCloud Services streaming years You that really also a the growing is addition now the that service Music; growth the that service continues rate were And business grow in actually very the with download few digits, a the that's ago, entire is helps

for of the is size we So XXX quite We a fiscal the double actually become we positive. goal did a what trajectory in XXXX, company. and to already Fortune set ourselves

Nancy Paxton

please? we Thank next have you, the Shannon. question, Could

Operator

UBS. with Milunovich Steve

Steven Milunovich

mix. quarter? I buying those expectations of also the that, the Thank survey next the forward? thinking you the whether you won't more wanted pushing And that X you little comment in days, some outsold that X. on are an alluding bit mix iPhone, a buying that the Plus to the do to over to that. X data your a Could in could of planning Could upon There finds Research terms price XX% comment try comment your going you. the the on about bit be terms suggests elasticity. if you're And seems to you in XXX push XX perhaps

that selling think imagined price you would've couple a pretty phone and it. do can ago, at nobody a you're I years obviously, confident this

Timothy D. Cook

about in That's past. mix. we've something talk to Obviously, I'm going the that not done

our launched X If selling when you became top they Plus, instantly look at and them, products. we two X the

look you any to the there, the X for Plus X we gotten start date, and a provide That little bit a Plus positive that If of time can in was model. Plus fastest us obviously. measure has of to particular, surprise, for of at period off color surprise, to a a

next. And happens so see we'll what

mentioned do never people there's before I'm I've look first some customers had the and of of we've three even one. been and that all today before, can sort wanted that sure to it's only deciding which three products that those at As

the of by And important see But for price happens what so remember phone I there. elasticity, terms people large pay a we'll in to month. that of number think it's

month. be you were so to And the you that you more since you the an X find of at would a look focus for tends out could if to I think $XX of U.S., go just call, the on U.S. this iPhone carriers, buy

a few let's less that's you coffee if than at so think places. these of say a that, coffee coffees week. about a one And nice a day It's

people now people mind residual that up payment the And iPhone for to other be many many iPhone and in And thing so current keep going their in highest their also to even industry the trading the on obviously, iPhone. the are carriers tends the The for is and $XXX, on. some that next things value or iPhone so have promotional $XXX pick less. monthly reduces then in

important place And do context. think to so that try I in to it's it

of price, we a technologies price highest leading We're X like new in to it way industry, we can't trying anything for we we're and lot there that the value price product or hands. not people the price for that. getting providing. get sort great And has iPhone We're the of the charge we just to trying delivering. in are of could terms In a it is it to we're fabulous start what to wait their that and

Steven Milunovich

you've and to And weren't then has a continued to been more little OLED. I there wanted go. first skeptical weren't you suggested screens, is ask, the large first historically to innovation you Street Historically, about

suggested, leading the Is possible Android which from face the it because of your guys very Now with have of position? some ago, going AR, aggressive gains leading though, forward you're in all-in you share accelerate stronger Apple. as year now competitive reminiscent you're a was you're of kind that ID, could a in

Timothy D. Cook

position. in been Steve, think, a competitive I we've

a And you're hear out right. I'll so always probably them And folks there. for and maybe I you than do doubting that until the I view about There's the retire, hearing here been those have different Thomases or quoting. I've been years suspect XX I've

fantastic will Not on as listen view There's today, what Store that doing and much. to And what AR the lots they're things. you'll here people App yes, really it of not can too today, don't be. unbelievable see it I that but the I profound. app be, So

Apple in unique area. I in it's lead position really I is profound think this and a think to

Nancy Paxton

we Could have please? Steve. the next you, question, Thank

Operator

We'll Toni Sacconaghi with go to Bernstein.

Antonio M. Sacconaghi

Thank Yes. you.

Just up that on bit a little Tim. following question,

little have in gross shouldn't about this can or you why marketplace, that guess please. you margins with talk about sets to think ones? the context a should a talked the perhaps margin. we You value and – in of versus we And you of X prices uniqueness And cycle uniqueness how the according in you iPhone I the I bit question about a Apple a improve makes bit that of why I have follow-up, sense. value the value. the providing we, of expect think of gross that lot have And to the given its the is pricing previous shouldn't given a particular, lot product

Luca Maestri

our that products price take you one. Toni, the When for value – that I'll we we said deliver.

products the new tend than the the also products said of cost they launch inevitable. be time to replace. It's structures new higher We every that products, we that

cost therefore new adding new features, the are and structures We up. go technologies,

record product, been also good example those a over Take we we headwind elements elements of foreign margin good over a life for of don't control. gross have We are the the structures There control cycle very the that lot down. track in we to there significant line of cost and that a has that for have are the There and overall change the are them bring markets taking able has situations are years Also, exchange, time, the are There to an for tends three commodity impact we can out of the market a the last bit the also on of where commodities company. now. markets company margin where the situations shape. gross that sell mix be are into and which in over for good products balance.

We around have right memory now being. a headwind pricing, time which is case for the a

our tend growing, should be and to be positive company many our margins there's to puts business fact that accretive it because a is The Services So Services takes. margins.

end unit investors So takes. puts there's margin important dollars for and tend think the that's that because a at about think forward. many to gross most years, between I we When go our of We and track as thing grow good over balance we the day. we and revenue, record at maximizing margins gross will to look the found and we we've think continue do

Antonio M. Sacconaghi

Okay. And then I can't this and Thank revisit and you early very it's you demand, that. supply wanted to make for I notion and of realize predictions.

quickly available to was the is, It unprecedented X for think common iPhone question had out versus made availability I history. levels sale. investor a levels pushed

is uniquely in really function history? history really really the initial a demand of versus versus that of think it'd is weaker is, supply that significant question push-out a push-out or function I be helpful. much so strong availability And So really

for X and the orders, X Plus. first there in which past for were X on iPhone have You XX-hour commented the million plus

you talked often balance. about targeting very could when reach call have You on you supply/demand this think

be Thank helpful So orders the availability you context it'd what points you. that a about device. seeing or initial terms some of terms in supplies try about help you data versus they're little provide either investors know, history in the understand that if can could of better and of really

Timothy D. Cook

into very guidance and our guidance, best can The bullish. the truth is we see that are we you don't know. the from estimate We've put

And great really units ago. feel the first so, we just about We the minutes product lineup. and sold

we'll how customers all and very so you think the where have get them of of discussion mix And much support, things go. kind demo I estimating. any see is there ability Until out to

in, never our so And this we've grantedly, estimates we done before. put but best

three So no nor the with launch. either the staggered there's here, iPhones comparison

something. So we're going learn to

Nancy Paxton

Thank Toni. the have you, we question, Could please? next

Operator

Citigroup. That is with Jim Suva

Jim Suva

there. the just market you'd mentioned Apple's question original I I'll analysis, still doubled success sliver much. my ask they're great over because prepared And year. very and same India. follow-up your at mentioned, comments Based different it a you time topics. looks upon year of Tim, in think, I relatively in Thanks pie India small But believe, slightly like the

through you that? show question is about we points? in partners? And now more where think how Is hardware you. has manufacturing excitement more really there? will hoping the bandwidth sales take even apps on Thank up many it the where would what more up the Is for Tim, in statement? within caught Is monetize Is to follow-up or should or Apple? Is AR/VR, then it it price it physical that your countries, the it footprint it lower stores? it then or be So services income successful India? a it other the Are will

Timothy D. Cook

of them and a things all those is market India doing the many you result In terms India, things all of of that well. correct. a like mentioned are Growing of

many making building right product to that the And It's so China. channels. It's we're ecosystem. like building having building markets. developer the And years I into It's analogous we the for stores. market. It's but the put do good see It's lineup it's are market, feel opportunity sort building long have progress go, of to way of problem. there an still understanding great we which about a rate. and feel growth as instead gaining of the I the I And a

India. And so that's

it's I think all those of things.

SEs think in there. majority the manufacturing last SE quarter nine we that six, as the sold we about market I started the were iPhone before, of know, the you there domestic talked so. iPhone months ago we manufactured As And

now was but point Jio addressed better the ago. as out, XX carriers materially being with they is months just and Bharti the the there the over et And money The winds amount also so an going taxes, it been saving of has up of avoiding hoping in compounding are, issue, some you large time have also between of issue India we are that that service some and that cetera. investing and and bandwidth is than way it

So period a a change there's time. in of sea been short there

good feel long all I way about but we have go. So to that, a

on AR/VR, experience. terms tend and In of we on foremost focus question customer first monetization the to

if get experience And revenues be result right. and getting we great. is so experience right, will the that making we of that think sure we're all the about that And profits a

on very we're much focused so the now. experience And right

Nancy Paxton

Jim. you, Thank

Jim Suva

Thank Thank you your so much you. details. for

Nancy Paxton

the question, next we have Can please?

Operator

That will Markets, come from Capital Amit RBC with Daryanani

Amit Daryanani

time be going maybe Thanks to start taking year margins. over with to I my year a high as guess I revenues puts historically? on will well. little. tell yield that? question, are us And down severe the are be you've have are a just on Could at up guys. broadly digits much this lot gross the for what inefficiencies seen more margin versus takes you gross two and what single Luca, midpoint,

Luca Maestri

XX% up to the so we're from Amit, XX.X%. sequentially. we're That's getting leverage XX Yes. bps larger the guiding volumes. Obviously

As I new products. higher have I we time launch Toni, think to cost mentioned, structures every we

which is the particularly the is this headwind to impact offset, going that point. mentioned from pricing So be and at the I environment memory a

year it a margin XXX Just you, memory year bps sequentially to is basis. the size for our impact of on and over gross bps XX on

think think impacts, I you're what is referring to. I and probably meaningful So that they are

Amit Daryanani

if or the device mentioned this the more per much you three quantitatively, to versus half see? of That's think, back helpful. half a line. dollar XXX one I first I from you on XXXX of of of And but iOS fiscal really Qualitatively mean basis up gain, points just which accelerated earlier, about is think like base, guess of how even is follow way XXXX by XXXX. if you is one-time the Services in I exclude looks there a things could the fair expanding you guys installed it. it talked the Got versus it that I amount the about

Luca Maestri

Yes.

both. it's think I

lot. mentioned, I Store said, base grown because, It's but a on to as number lot the accounts the very on important transact world Store, for to that around easier to participate App also particularly the Store. you is a As and which have made grown, the App of number paying has on our has be grown a the installed because us, customers App changes of the able it we made have

ago months more We for ago. we months of forms example, even payment today are accepting, or were than X XX

important. very So that's been

tend We is they they start Store, typical with also customers. get time they the been We're on more have also curve start When familiar for design level more. see remarks made to they very have there start these to over received Store. And prepared and our probably changes, I transacting and very a certain the changes the spend mentioning the that recently, that spending in seen, Store at to now, the you some of a favorably. App as you was to

that and businesses And that people all the as growth and very, Store, adds our apps, point Music. mentioned we so actually And more you download they are so also out, over are correctly now But up. is translates spending I have monetization. accelerating. it rate more time other I time into mentioned accelerating. and on very iCloud, growing fast

Nancy Paxton

next you, question please? have Could the Thank Amit. we

Operator

From White. Drexel Hamilton, Brian

Brian J. White

a and What mainland wondering iPhones at preorders Plus, in a the and to look now. mainland think general we X I'm iPhone response also and just Tim, new sale we if X they've two been X about the while take around China for has those iPhone China? been iPhone on Yeah,

Timothy D. Cook

we I We that we competitive don't as want Brian, hate mix. but to repeat to really information hold this, view disclose it tightly ourselves.

in channel, of indications the channel, our I and they in process versus the carrier take terms way China works channel interest something In a the of generally preorder preorder. that in broader so direct channel, would label the in but not

a demand quote be demand find and out. could get to to find but out And so don't meet really know when future. the yet, we'll what it to misconstrued. would And I supply the we're the excited where in number and going fear for hesitate I even sometime

Brian J. White

sequentially. XX% it's interesting And, Tim, that sales grew

look the an Yet at up have X% all years, you in iPhones quarter, market. If that's the you the sales didn't in your September so average. were past five

disconnect, that to? an to, versus if So had average XX% of you would big pretty attribute a you X%. It's what

Timothy D. Cook

as broad if I'd across China you products. was performance the take indicated even see stronger. rebound during rebounded. strong. Our quarter China the you emerging But And the very And it's based was can that before, market China out,

iPad, And Watch, iPhone. so on on all the Services, on we on a firing phenomenal on Apple on just Mac, had we're we're cylinders. quarter mean literally, I

us that's new that that And going this be what, into great is so products the yet. confidence our best this headed season holiday give to and season holiday

Nancy Paxton

you, Thank Brian.

Brian J. White

And, Tim -

Nancy Paxton

Thank Hoover the contact and telephone. or apple.com/investor today. is the p.m. press call with Podcasts, today's additional on and of for Huguet And be at XXX-XXX-XXXX, replay code joining available on numbers are for me confirmation and available you be Joan of telephone XXX-XXX-XXXX, XXXXXXX. enter X:XX I'm at replay with for contact Apple Kristin and replays by questions XXX-XXX-XXXX as will These the weeks webcast A a please will two Members additional approximate us. Joan XXX-XXX-XXXX, Pacific questions. can again can financial Time XXX-XXX-XXXX. or at analysts via

Operator

conclude thank today's and does presentation. Ladies that everyone do gentlemen, We for your participation.

Apple (AAPL) 2 Nov 172017 Q4 Earnings call transcript