http://www.morningstar.com/earnings/51338386-apple-inc-aapl-q2-2013.aspx

Apple Inc AAPL
Q2 2013 Earnings Call Transcript

Transcript Call Date 04/23/2013

Turning to iPad, we were thrilled to sell 19.5 million iPads during the quarter, compared to 11.8 million in the year ago quarter. That's an increase of 7.7 million units, or 65%. iPad experienced very strong year-over-year growth in every operating segment, particularly in Greater China and Japan, where sales more than doubled year-over-year.

Both iPad and iPad mini continue to be extremely popular and we were pleased with sales of both. We were able to sell significantly more iPad minis in the March quarter than in the December launch quarter and to expand availability to China. Customers love the combination of experience, performance and size that iPad mini offers and our early market research indicates that the overwhelming majority of iPad mini purchasers are first-time iPad customers.

We ended the quarter with about 4.8 million iPads in channel inventory, a sequential increase of about 1.4 million. All of the sequential increase was attributable to iPad mini. As we discussed previously, we were not able to meet demand for iPad mini in the December quarter and entered the March quarter below our target range of channel inventory. This sequential increase places us within our target range of four to six weeks of total iPad channel inventory.

The most recent survey published by ChangeWave indicated a 96% satisfaction rate among iPad customers. Not only is iPad a huge hit among consumers, but it also continues to be widely adopted by business customers as well. iPad and the iOS ecosystem are driving innovation across industries and in companies large and small. We are delighted by the number of companies that are choosing iPad for their most important business tasks, as well as the rapid adoption of iPad in emerging countries around the world.

Doctors at the Colombia Cardiovascular Foundation in South America are using an in-house app to perform remote diagnostics for patient in inaccessible parts of the country. First National Bank, the oldest bank in South Africa, has issued iPads to wealth managers to help enhance customer relationships and interactions.

In the education market, Grupo Santillana has developed UNO Internacional, an integrated educational system that uses iPads to create digital learning environment in more than 700 private K-12 schools in Latin America. UNO Internacional has deployed more than 60,000 iPad to schools in Mexico, Colombia and Brazil, including 17,000 iPads for teachers and students in Brazil in the March quarter alone.

Turning to Mac, we sold just under 4 million Macs, which is a 2% decline from the year ago quarter. IDC estimates that the global personal computer market contracted by 14% during the March quarter. We experienced strong year-over-year growth in desktop sales following the December quarter launch of our stunning new iMacs, offset by a decline in portable sales, given a weaker personal computer market overall. We ended the quarter within our four to five-week target range of backchannel inventory.

Moving to the iPod, we sold 5.6 million iPods compared to 7.7 million in the year ago quarter. iPod Touch continue to account for over half of all iPods sold during the March quarter. iPod's share of U.S. market for MP3 players was over 70% in the March quarter based on the latest data published by NPD and iPod continue to be the top selling MP3 player in most countries we track based on the latest data published by GFK.

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