Tim Cook: If you look at Europe in particular, the Mac unit growth in Europe was 28%, and that compares to a market growth of 9%, so they were also over three times the market.

We did grow iPod sales faster outside the United States, which was our goal, if you recall. We now have five countries that are above 50%, and this is in addition to the United States, the U.K., Switzerland, Canada, Australia, and Japan.

If you look at some of the other countries that we put significant attention to from an advertising point of view and a channel development point of view, France, Germany, Italy, Spain, Belgium, Sweden, Austria, Denmark, all gains between 10 and 20 points of share.

Bill Shope (J.P. Morgan): Could you give us an update on the Best Buy pilot and how that fared during the quarter?

Tim Cook: Relative to Best Buy and more generally, expansion of the Mac channel, we are continuing to selectively expand the Mac channel. We now have around 7500 storefronts around the world. That increased about 1500 across the year.

Gene Munster (Piper Jaffray): Do you think Apple TV is more of a niche market similar to AirPort Express has been for the music market, or do you see this as a broader platform?

Tim Cook: From how we are positioning the product, we see this as the DVD player of the 21st century so it is clearly not a niche.

Jesse Tortora (Prudential): Can you give us your thoughts in terms of the buybacks and the acquisitions?

Peter Oppenheimer: The stock buyback programs and other forms of returning cash to the shareholders are reviewed with the senior management and the board from time to time, but our preference continues to be to maintain a strong balance sheet in order to preserve our ability to make strategic investments or acquisitions.

Bill Fearnley (FTN Midwest): How is the Mac Pro performing versus your expectations now and your latest thoughts on the transitions to some of the products that the design professionals are looking for?

Tim Cook: The Pro market met our expectations internally. However, those expectations were tempered by the fact that some customers are still awaiting the Creative Suite from Adobe to be released.

They did release a beta, and there is a lot of positive comments about the beta product and they have announced that the release will be coming in the second calendar quarter of this year, so just next quarter. We would hope to see some of those customers that are delaying purchases begin to buy again at that point.

Bill Fearnley (FTN Midwest): On Boot Camp downloads, can you update us on that?

Tim Cook: We are now up to 1.5 million downloads so it continues to be of great interest to a number of different people, and our intention is still the same, to include it in Leopard as we release Leopard in the spring.

Kevin Hunt (Thomas Weisel): Can you comment on the Cisco lawsuit over the iPhone name?

Tim Cook: We think the Cisco trademark lawsuit is silly. There are already several companies that use the name iPhone for voice over IP products, and we believe that Cisco's U.S. trademark registration is tenuous at best. We are the first company to ever use the iPhone name for a cell phone, and if Cisco wants to challenge us, we are confident we will prevail.

Jonathan Hoopes (Think Equity Partners): Could you quickly go over what happened in Japan?

Tim Cook: The PC market in Japan is among the weakest in the world. IDC was projecting a 16% contraction year-over-year in the home market, which is obviously the market that is most important to us.

In the MP3 space, we maintained a 50% share of the market. However, the market did not grow, and with the lower prices that we announced in September, that resulted, along with the CPU performance, to a lower revenue on a year-over-year basis.

We are disappointed with the results, even though they are consistent with the market in both areas of PC and MP3 and we are putting additional emphasis there. We just started running a localized Mac/PC ad that's getting good reviews there.