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.
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