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Apple Inc Q4 2009 Earnings Call Transcript
Author: 123jump.com Staff
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Last Update: 5:26 PM ET October 20 2009

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Apple Inc fourth quarter sales rose 25% to $9.87 billion and net income rose 46.5% to $1.67 billion or $1.82 a share.


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Operator

Scott Craig from Banc of America.

Scott Craig - Banc of America

Hi Tim. I know you guys don''t have a lot of experience with the seasonality in the iPhone business, but how do you think about the seasonality here into the fourth quarter and then a question for Peter on tax, can you walk us through why the tax rate going to go up here in the near-term? Thanks.

Tim Cook

Yes. Scott, as you said, when we look at the September to December quarter, we have very few September to Decembers to look at in the iPhone business since we''ve just been selling for a couple of years. And in fact, in the vast majority of countries, we''ve only been selling in one and in some of those, just a partial.

And so, honestly speaking, we''re new in the business still and I think for me to make any kind of seasonality forecast would not be a good idea. The things that we look at in terms of coming up with our forecast would be the popularity of the iPhone 3GS has been phenomenal. We were very surprised by the demand. We were selling in 64 countries by the end of the quarter. We''ll roll out others this quarter, notably China, which has already been mentioned in the call. We hope to roll out in Korea as well. And as Gene mentioned previously, we will be adding some carriers in some countries where we only had one carrier before, such as the United Kingdom and Canada as an example. So, those are the things that we think about as we think about our December forecast.

Peter Oppenheimer

Scott, related to your tax question, our tax rate for the quarter was 26%. And it was below our guidance of 30, primarily due to a higher mix of foreign earnings. But for the year, we were about 29%. The past two years, we''ve been pretty much right on 30. So, from what I see at this point for fiscal 2010, we''ll see about 30% for our tax rate, really consistent with what we''ve seen in the last couple years.

Scott Craig - Banc of America

Okay, thank you.

Nancy Paxton

Thanks, Scott. Could we have the next question, please?

Operator

From RBC Capital Markets, we''ll hear from Mike Abramsky.

Mike Abramsky - RBC Capital Markets

Thanks very much. Tim, what are your thoughts in the holiday season given the increased and competitive intensity against iPhone? There''s a lot of obviously wannabes that are coming to market in that season, specifically Android and many are now offering touch screens and richer browser like in media and App Stores and are being given carrier support. How do you think about maintaining your momentum and differentiation amidst that kind of environment?

Tim Cook

Well, Mike, we feel great about how we ended the fiscal year with selling 7.4 million, as Peter talked about in the preamble. And that put us over 20 million, almost 21 million for the fiscal year, which was up 78% from before. And so, we have significant momentum. Also, when you look at the ecosystem that we''ve got with iTunes and the App Store, the App Store having over 85,000 Apps, which is a country mile more than anyone else, plus the very strong product pipeline that we have, we feel very, very good about suiting up and competing against anyone. Go ahead.

Mike Abramsky - RBC Capital Markets
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