Apple (AAPL) 29 Oct 202020 Q4 Earnings call transcript

Good day everyone and welcome to the Apple Inc. Fourth Quarter Fiscal Year 2020 Earnings Conference Call. Today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn things over to Tejas Gala, Senior Analyst, Corporate Finance and Investor Relations. Please go ahead, sir.

you. Thank thank us. and for you afternoon joining Good

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Tim. you, everyone. afternoon, Good Thank

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Finally Directors November November call payable today, shareholders a stock, dividend let’s to per declared X, With XXXX. to open our XX, Board share that, record of XXXX of of $X.XXX cash questions. of of as has common the

please. we may We that you the two first limit Thank to question questions. Operator, yourself you, you have Luca. ask

[Operator Instructions] Research. first Certainly today hear we'll Cross, Shannon from Cross

the little bit dig or us in situation seeing was. in a a just you. China, we're a idea up. Thank you But, into more a benefits all can have Tim, then of, any about maybe more your comment seeing in in the up think and you're I that were whether you'd give much. Huawei sure blowback exactly an at very you what all regions high. I'm of talk bit linearity, terms services time not Thank Luca; mentioned China? trends follow And and

Shannon. Thanks,

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feel it's the ahead places a we like But obvious it's where time. to more at at And get we world better. There than right exactly the going are of in entering sort just so are others.

That from will Jeriel Ong Bank. from Deutsche be

And the is you is perhaps, XX% to guess even think have follow with if so much. I thank you you quarter-on-quarter, the Yes, appreciate that relative a years my to I seasonality grow I typically could, of seasonality, five revenue later but I guidance over guess beat above last do that, release? the can guys up. for question, you I

I reasons a my range, not during So the for explained Jay, I said, remarks. as we're prepared providing that

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are launching quarter two four seven iPhone for the iPhones, Mini So Pro XX for weeks Max. other the and the models for into the and weeks the and XX for quarter new into Pro we two, the

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you to ask think the context one, a us given like to longer thank of levers little bit for that much term more about. some and Awesome, so I'd of a a nature. bit little in strategic

would services, place, and services, bundles I sense rationale sense hardware some Thanks. perhaps that is the with also the bundle the translate it Because if other hardware, me well, of the makes hardware? wouldn't think and case, interesting you don't desire maybe asked wondering, first bundle as if in not AirPods have investors that's perhaps that Apple and one or AirPods bundling guess. also is to watch benefits they make is bundle it necessarily iPhone? thing I one iPhone that to to And take bundling? and why in I'm this two

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come Katy Morgan will with It from Stanley. Huberty

Thank afternoon. Good you.

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deliver good are so we're level able the see of to the much that and margins very to expecting. think investors are that think able and to good I gross dynamics still that technology so gross it's And offer more I margin

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Amit That will come from Evercore's Daryanani.

two for well. my I guess Thanks taking I have question. as

replacement enter would talked ever take off, I high. along suggest Tim, thing you together, First that fact that, years. we pretty with user data rates, period we of And of versus could the rate, the embarrassingly usage all weekly satisfaction seen revenue in iPhone what clarity confident, better like about the better been largest being iPhones, our does And that iPhone install with the are growth if of you couple aggregate data highest elongated. and an give if that getting iPhone on last high me cycles obviously extensive

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JP We'll Chatterjee with hear Morgan. from Samik

taking Hi, iPhone carrier off for iPhone want thanks start question. about subsidies you see here, as mixed the to optimistic sales. the with the I particularly that lineup you mentioned, just

to the in US. Earlier going year, iPhone had sales I out the at consumer seeing think helping you the in just in stimulus checks other here that factors spending looking was here. some an consumers with uptake mentioned overall

lineup? So with as new product some change on -- follow How iPhone about front, see have I as the And spending on particularly we here sales, you macro that even a seeing with up. think you delays a consumer side you. impacting? are anything the Thank

September, growth seeing customer mid digit double on we to were in demand iPhone. It's prior

the is iPhone there. of the there launch the of momentum and momentum And XX. more a XX so even given lot much now a there's of So lot Pro

I the If But macro different you're be to have it been could yes. run whether environment? answer experiment. asking a believe you with spending even the more can't

a that so COVID just And I know I don't worldwide in take view. general economic But for sure. of suspect something point from the off

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share this or had the to But if any second all And prepare supply potential prepared We you companies levels, your disruption, any in that here remarks. kind for of like right. inventory sourcing a for earlier are wave, to which you prepare preparing I to looking thoughts can well as either year? from about how we chain, are in think relation trying discussed at potentially you're

safety everything But obviously. first, prioritizing doing we we're we're Well, do. can

employee customer's of to the And so a safety come example, with but safety that we've with where number an storefront. view, our in an up take puts that concept into place. allows as from our that we've stores believe essentially And we express an turns helps the for new still point the places of store implemented a an the of of and interaction

lot to a are online we've people has way. out up more And and this. the more running also reaching so that the of the phones lot stayed put a course, of people us store And whole in on because through

different channel well. some take some is the as and doing similar things then I think things those, of you if some

to so plans and And to is to to it the and in putting And obviously. adapt way was the uncertainty in that's level a there's earlier. think referring ability everybody of contingency environment. is I what Luca it, finding call their a But of difficult best to

and Krish Cowen That Sankar come Company. from will from

you first them, don't on similar two growth give December mentioned to have taking I or for margin I of September. understand color segments. But be palooka. question. on by in thanks want products versus my should you margin Hi, Luca gross

side, the subsidies cost would that on general would grow should attainment. it bond gross digit, double so for there's but the headwind iPhone be margin, And carrier a view be

how curious, the about of December kind margin I'm a we into should levels gross up. like So different, think And have I follow quarter?

Yes.

typical the holiday have between of the have during we at shouldn't so new particularly And as the go iPhone, positive we because that this forget launched September same And we time, products, have we as seasonal season. the factors sequentially launched mix December lot the a to we've new we from leverage, typically year, we an quarter, right, improved have also products.

weeks, four models During launched the new of new, last watch several Apple models of models iPads. of we new we iPhone; launch

And cost so, is product, the clearly structure a new we every launch higher. time

so is side other to the be going And of that the coin.

that's while technologies, delivering is our different not is saying the but factor a earlier, and So new lot balance past. we that out things should for are of was a as I we something bit that lot two an time think of from exchange a This accomplishing new those again, this customers. and to and features a

and but that those pluses minuses. are the So

payments Got your it. out Cash; And about find you from didn't helpful, Apple Pay, including whole ecosystem the ecosystem think comments whole of of point, up kind payments Tim. now I your Tim, this Apple advantage how environment. lot for curious the Luca. prepared follow disaggregating kind of you're say a then Definitely to in Apple you surprised Card, FinTech a

is question. I about about kind limited it. I a talk can a the talk number just for of There's of Thanks didn't reason things

well. Card be to Apple doing And Payment Pay is is about continue We exceptionally doing very area. whole Apple Services the well. enthusiastic

to you can hand want in a over are imagine less card. As people environment, this

go that has bit So been there. US the that on on the think lagging may trajectory has The think back. get this contactless a payment. taken a different different put payment a of in in will adoption contactless level it never I pandemic US And I well

space. this bullish And are are about us. in of more area in this so area and Apple And there great that so do to there that we are things interest view very can it's an

That will McNealy come from Jefferies. Kyle with

little to about wanted chain. the ask for thanks the a Hi, question. I bit supply

of start latest there end weekly versus Or line from year, shortages the will there take calendar? think able last meet year? any increase the are be that component do phone your Are that to supply the to seeing? you of output flagship through Given that actions this demand you're any manufacturing can to you Thanks.

are Yes, of know constrained Kyle, iPhone if But I in the we front that's you look don't particular. the talking today. surprise what at about where end iPhone, you're not And a at and Max orders long either. be ramp, or Mini yet I haven't how mean, we taken the XX constrained, we if will, you for predict. will supply iPhone to it's the Pro hard

those so And are coming in.

of we And constrained Mac, for So supply well. are are iPad. on we supply shall see. as some Apple confusion we on constrained also supply right on supply constrained, where now any we're watches supply we constrained avoidance are constrained But

number I focus, so of now and point, when quickly remedy this that. working have of fair we'll But we estimate And at areas out really, be those hard a really right can't of to as as we're we can.

like What trends less holiday and season? more or that. seasonal in iPad. seasonal? to than there's strength the And to these a then you've we quarter Mac December the through and great. in positive strong of How supply good do and you there stronger and pullback Okay, back after constraints any do think in about Is chance of iPad? make seasonal for the positive the about the of continuation and being a switching demand there school seasonality Thanks. it think Thanks And into flow March seen Mac durability lot. for potential with feel strong season

would all we products all iPhone products placed digits. products, in when said excluding color that provided grow rather thoughts all Yes, that the iPhone double or he our iPhone, the in Luca services excluding and excluding

we And Mac do. be continue and bullish what iPad on can so to

work work Because go learning different. will remote taken that aspects place well. that moves to are this going I something are there normal, not the and have become that to back of normal remote people are learning think to I think

where little Macs more And we're environments. XX and think datasheet are were can go iPads to from Luca so history by iPad that company, Mac that by time even we and XX. growth are I And high were. and of the those as these both important phenomenal was going as in to numbers with The These for your the back don't believe of quarter in from I tremendous last tell the in you that means billion. said not and the bit at at by $X.X all September quarter Mac

And that going going substantial have we promotion back so a that aggressive school. for to students was did it were back difference college to

to it it it. the But remote And part the to anytime the so of not be something that to going invariably back part during way is soon. snap that's think I other work thing used of

will That Raymond with come Chris Caso James. from

you. some the down price for either made changes? I potential first some the talk is point unit was you price as for result guess thank Yes, this process the changes after is through that's Can out price between the iPhone, XX you a on guess bit? the I And behind question that implications elasticity I a point the ASP prior came or thought where adjustments of iPhone the and blended moves And a gap up iPhone XX guess years there iPhone Pro difference the smaller. in pricing. price bit, the and back year, XX

people much get countries of more also but offers really to are of family the this in aggressive. start Well, very In many those are are And people, in carrier $XXX. you I iPhone paying in world plan. the country, connect a because deals that, because particularly several XX than in lot at the different places, that course, other can a

And one. $XXX. iPhone so customers most the our price is The is XX that important at probably the paying

is $XXX XX I more difference XX so $XXX there. think the there's viewing people are it a Pro. But as would And Mini you're between difference the a I what saying that guess and

XG. because the see taking we're orders feel the all give no and in the like And features not Pro But did the of a to XX great now that like we try that we Max, And despite, we turns Pro, is the what value. the I this the year. earlier, always including we phones, yet. data what into than so we have on mentioned customer And really other extra we'll mix XX. Mini was do placed Right out. XX data pricing and that's as

go As carriers seen into Is promote as now. about as through, as And we've And moving of the this see you're XG? we're incentives of that of you of XG some that, here from the in a US. some and carriers about color XG were mentioned, is and we the these some mark out up what will could in around switchers we follow the prevalence as of this shift lot we geographies, if from or seeing extent What's incentive incentives into as larger. years you provide other a And something carrier incentives? permanence approach a some networks carriers more ago, obviously, they to expect the then, should rolls kind either the higher of protect the try forward? world the of went

the around we Generally, talk the vast, I our it's customer's to partners that them move it's to to customers like interest move carrier to would And interest to that obviously, speak don't the XG. be about think well. XG want to for to as up to and world of vast their in their I to plans. majority I think carriers

everyone's of normally direction. a same that's you whoring where in think we a very situation have situation than kind the I And so And have. different would

the critically of it of I important lineup, size as me bullish, is other alluded to the base, to very well. the are as important one, very one things so And these that only makes the things product are install things the earlier

call contact approximately numbers Thank available at The questions will of are A as XXX-XXX-XXXX. with please a analysts financial me Chris. for webcast additional on Thank be Pacific today. replay will podcasts, and Kristin Huguet us. joining contact confirmation Members for at again can you, apple.com/investor Apple replays can time telephone XXXXXXX. telephone. replay X or XXX-XXX-XXXX you PM today's available for be press the XXX-XXX- of enter XXX-XXX-XXXX; two weeks XXXX, on questions the code by additional with These via

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