CF Apple Computer

Peter Oppenheimer – Chief Financial Officer Thank you, Nancy. Thank you for joining us. We are very pleased to report our September quarter results, which were record-breaking on a number of fronts. First, we sold more Macs than we have in any other quarter in Apple’’s history. Second, we sold more iPhones in the September quarter than in all previous quarters combined.

Third, we sold more iPods than in any prior non-holiday quarter and finally, we generated more revenue and earnings than in any previous September quarter in Apple’’s history. Revenue for the quarter was $7.9 billion, representing 27% growth and an increase of $1.68 billion over the previous September quarter’s revenue of $6.22 billion. Operating margin for the quarter was better than expected at 18.3%, due to higher than anticipated gross margin.

Net income was $1.14 billion, which was up 26% over the prior September quarter’s results and translated to earnings per share of $1.26. As we have discussed in the past, because we may provide new features and software applications to iPhone and Apple TV customers in the future free of charge, in accordance with GAAP, we use subscription accounting to recognize revenue and cost of sales for these products on a straight line basis over their two-year estimated economic lives.

This, results in the deferral of almost all revenue and cost of sales related to iPhone and Apple TV during the quarter in which these products are sold to customers. In contrast, we generally recognize revenue and cost of sales for our other hardware products, such as Macs and iPods, at the time of sales as we do not provide new features or software applications for those products free of charge.

I got the 2nd option. Have to wait till a few pay periods to get the Apple Care and the display port to DVI adapter. Glad I waited all summer. Good things do come to those who wait I guess. Bad thing is, won’t come till Oct 20-24. And they charged me for tax :-(. never did that for Colorado. But Can. Not. Wait.