Apple 4Q15 Earnings Call Notes

Revenue grew by $51B y/y

“we are proud to report revenue of $234 billion, an increase of 28% and $51 billion over 2014. This is our largest absolute revenue growth ever. To put that into some context, our growth in one year was greater than the full year revenue of almost 90% of the companies in the Fortune 500.”

Sold 231m iPhones in LTM

“In the past 12 months around the world we’ve sold over 300 million devices including 231 million iPhones, 55 million iPads and 21 million Macs setting new unit records and increasing our global market share for both iPhone and Mac.”

Apps represent the future of TV

“Yesterday, we started taking orders for the all new Apple TV and it was a huge first day for this exciting new product. We want to provide the same innovation in the living room that we delivered in our iOS devices. People are already watching more TV through apps today and we think apps represent the future of TV.”

Issued 5.8B of debt denominated in other currencies

“In the September quarter, we issued a total of $5.8 billion of term debt, consisting of 1.25 billion British pound denominated notes, 2.25 billion Australian dollar denominated notes and 2 billion euro denominated notes.’

Expecting 700bps headwind from FX in Q1

“You have to consider the constant currency growth rates. And so if you do that, our guidance is actually 8% to 11% because we have about a 700 basis point FX headwind in Q1′

We’re seeing a lot of switchers from android

“We believe that iPhone will grow in Q1 and we base that on what we are seeing from a switcher point of view, we recorded the highest rate on record for Android switches last quarter at 30%.’

There are also still a lot of upgrades ahead

“We also look at the number of people that have upgraded, that were in the installed base prior to iPhone 6 and 6 Plus. And that number is in the low 30 percentages. ”

A huge growth in middle class in China

“The latest study I have seen from Mackenzie indicates if you look back five years China’s middle class had about 50 million people in it. If you look ahead five years, it will have ten times that number in it.”

These drivers are long term drivers

“the macro things that I spoke about earlier, the upgrade programs, the Android Switcher rate, the iPhone momentum in the emerging markets and the LTE penetration in these markets these trends are not one quarter things. These are longer term things.”

Are continuing to hedge as hedges roll off

“We continue to hedge, so our program continues on an ongoing basis and we will continue to provide some level of protection to foreign exchange movement. ”

I don’t envision having a large enterprise sales force

“I do not envision Apple’s having a large enterprise sales force will certainly make – we continue adding some people more on the engineering side, but I don’t envision having a large direct sales force.”

iPhone number one selling phone in ChinaIf I just look at how many people are coming into our stores, I wouldn’t know there’s any problem in China

” if I were to shut off my web and shut off the TV and just look how many customers are coming in our stores regardless to whether they’re buying, how many people are coming online, and in addition looking at our sales trend, I wouldn’t know if there was any economic issue at all in China. And so I don’t know how unusual we are with that…I just think that the area that it’s currently operating within, it’s hard to tell the difference of the consumer level for us. I mean, you really can’t tell the difference, if you look at sort of our daily and weekly numbers.”

I don’t think China is growing as fast as it was but our results are not dependent on changes in the growth

“I think that there’s a misunderstanding probably particularly in the Western world about China’s economy, which contributes to the confusion. That said, I don’t think it’s growing as fast as it was, but I also don’t think that Apple’s results are largely dependent on minor changes than growth. I think it’s much more of contributing – I think other things contribute to that much more.”

There are a lot of people who haven’t upgraded yet

‘When I look at the upgrade rate, Steve, what I see is I feel good that it’s a low number because that’s low number means that there is 69% of the people that are out there prior to the iPhone 6 and 6 plus that haven’t bother to upgrade this year. That’s a large number.”

50% of people buying the iPhone 6 in China are buying their first iPhone

“if you look at China as an example, it’s over 50% of people that bought 6 and 6 Plus were buying their first iPhone’