Operator

Your next question will come from Bill Fearnley with FTN Midwest.

Bill Fearnley - FTN Midwest

Yes thanks, if I could ask a question for Steve and then a quick follow-up to Peter and Tim. Steve, how are you thinking about Apple TV now? You’ve had a heck of a year. For fiscal year, you’ve upgrade the iPhone, the iPods, and certainly the Macintoshes as well. If you look at the digital living room category and you look at the upcoming year of 2009, how do you look at the digital living room opportunity and how it relates to Apple TV?

Steven P. Jobs

Well again, I think the whole category is still a hobby right now. I don’t think anybody has succeeded at it and actually the experimentation has slowed down. A lot of the early companies that were trying things have faded away. So, I’d have to say that given the economic conditions, given the venture capital outlooks and stuff, I continue to believe it will be a hobby in 2009.

Bill Fearnley - FTN Midwest

And if I could switch quickly to tablet computing and touch screens, you’ve made some comments about those in the past but when you look at tablet computing and you look at the new form factor for the Macs and those types of things, does that get to be a more attractive opportunity for you going forward here, now that the new Macs are out?

Steven P. Jobs

I think we have such creative people that are looking at a lot of things but I really can’t talk about any of the future products we are working on, I’m sorry.

Bill Fearnley - FTN Midwest

Okay, and then thanks for that, and Peter, when you talk about your expectations for the upcoming quarter, what’s your expectation for meeting or getting close to equilibrium from a demand and supply perspective here in the first quarter of ’09, and are there any credit issues in the channel affecting your revenue projections for the upcoming quarter, either in the U.S. or other geos? So it’s a new product and it’s a credit issue question for the guidance in the first quarter.

Peter Oppenheimer

Bill, I’ll make a comment or two on the credit and Tim can speak about the first part of your question. This is definitely a concerning environment from a credit perspective. Our treasury team has done just an amazing job with our cash. I was so proud to tell you in my opening comments that our mark-to-market, unrealized mark-to-market on the portfolio only increased $80 million sequentially on over $24 billion of cash. So, they’ve done a great job.

On the receivables side, we’ve historically been very good in that area. We’ve got good people. We stay on top of collections and we monitor accounts, I think as any company does. But it’s a tough environment out there and we are being as careful as we can and hopefully we won’t have issues in the future.

Timothy D. Cook

Bill, let me take the three product areas and briefly comment on your question. In the iPod space at the end of the quarter, we were still filling the channel to get the new product at the right level in the channel. We’ve now completed that but were not at the end of last quarter. And the iPhone, as I’ve alluded to before, we felt we ended with the right level of channel inventory and it’s difficult to predict demand for the quarter but today I know of no issues in providing the right level of supply. On the Mac side, we have significant backlogs on the new product and we are working very, very hard around the clock to fill those just as fast as we can and we’ll see what the trajectory of demand is but I’m confident that we can produce a lot. Whether it’s enough, I don’t know because it’s hard to forecast the demand.

Bill Fearnley - FTN Midwest

Well, if the fog lifts on October and your demand visibility gets better at the beginning of November, do you still have time to ramp your builds to affect the first quarter number then, from a supply chain perspective?

Timothy D. Cook