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This is Tim: Apple’s CEO on the company’s 2016 Q4 earnings

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This is Tim: Apple’s CEO on the company’s 2016 Q4 earnings

Apple's fourth-quarter effects for 2016 are in. This is our live-updating transcript of the name.

Apple CEO Tim Prepare dinner and CFO Luca Maestri spoke with analysts right through the company's Q4 2016 earnings name. This is our ongoing stay transcript in their remarks, courtesy myself and particular visitor typist Jason Snell of Six Colors! If you wish to have extra information on Apple's effects, check out Jason's charts and numbers for the quarter.*

Prepare dinner's opening remarks


Tim Prepare dinner

Just right afternoon, and thanks for becoming a member of us. We are in the center of an overly busy season for Apple, and on Thursday of this week, we are keeping some other tournament right here on the Apple campus. All folks are excited, and we expect our consumers are going to like those newest inventions.

Our effects for the September quarter have been very robust. We generated $46.9 billion greenbacks in income in the quarter, towards the top finish of our steerage vary. Gross margin used to be 38 %, at the very most sensible of our vary. We bought 45.5 million iPhones, reflecting persisted development in yr over yr efficiency in comparison to the final two quarters, as we forecasted in January. iPhone gross sales have been up year-over-year in 33 of our most sensible 40 markets.

As you recognize, iPhone consumers are the maximum glad and constant consumers in the global, and monetary 2016 noticed extra consumers transfer from Android to iPhone than ever ahead of. This is because of the awesome buyer revel in we ship with our merchandise, and it is one thing no different corporate can fit.

We had a record-setting quarter for products and services, with income expansion accelerating to 24%, achieving 6.3 billon. App Retailer income persisted to skyrocket, whilst track income grew by way of 22%, because of the rising acclaim for Apple Song. If truth be told, JD Energy lately introduced that Apple Track enjoys the best buyer delight in the streaming song marketplace.

Previous this month, I visited Japan, the place Apple Pay went stay the day before today. Eastern consumers are already in the addiction of creating contactless bills the place they go back and forth, dine, and store, so we think a robust reaction and speedy adoption of Apple Pay.

Round the global, we are seeing very robust expansion in transaction quantity thru Apple Pay, which additionally introduced in Russia and New Zealand this month, and is coming to Spain in the following few months. Apple Pay transactions are up just about 500% year-on-year for the September quarter. In reality, we finished extra transactions in the month of September than we did throughout all of fiscal 2015. And with Apple Pay make stronger now constructed into Safari, loads of hundreds of web pages are bringing Apple Pay to their consumers. Our primary companions let us know that Apple Pay presentations the easiest conversion fee of any virtual pockets.

We stay very assured about the long run of our products and services industry given the unrivaled degree of engagement, delight, and loyalty of our rising set up base. We now have virtually doubled the measurement of our products and services income in the ultimate 4 years, and as we've got stated ahead of, we think it to be the measurement of a Fortune 100 corporate in fiscal 2017.

As for our latest merchandise, we are overjoyed with the buyer reaction to iPhone 7, and iPhone 7 Plus. Those are the best possible iPhones we have ever made, with leap forward digital camera methods, immersive stereo audio system, and the easiest iPhone efficiency in battery lifestyles ever, because of the custom-designed Apple A10 Fusion chip. They function the brightest, maximum colourful iPhone presentations so far, and are available stunning new finishes. Call for continues to outstrip provide, however we are running very exhausting to get them into consumers' palms as temporarily as imaginable.

We are additionally off to a super get started with Apple Watch Collection 2 — the subsequent era of the global's most well liked smartwatch — full of new options together with integrated GPS, water resistance, a dramatically brighter show, and a strong dual-core processor.

People and companies alike are spotting the attainable of Apple Watch to lend a hand folks keep wholesome, motivated, and hooked up. One fresh instance is Aetna, which has introduced a brand new initiative to revolutionize its individuals' well being revel in through subsidizing Apple Wait for person consumers and make a selection massive employers. As well as, Aetna is additionally offering Apple Watch to just about 50,000 of its personal workers to inspire them to reside a more fit day.

We've got simply rolled out new variations of iOS, macOS, and watchOS, and consumers are loving the many nice new options — together with Siri on the Mac, enhanced well being and health functions for Apple Watch, and a satisfying new solution to revel in your pictures on iOS with a function we name Reminiscences. We have now made large advances in Messages, making them extra expressive and a laugh than ever with tough animations, invisible ink, and handwritten notes. We are seeing nice choices from developers in the all-new App Retailer for Messages, and there was a marked building up in our per thirty days lively customers [for Messages].

Considered one of the nice new options of iOS 10 is the House app, which is making house automation simple to arrange and intuitive to make use of. Consumers can simply arrange and securely keep an eye on all their HomeKit equipment — from lighting fixtures and cameras to storage doorways and air conditioners — all from their favourite iOS units. We think over 100 HomeKit-compatible merchandise to be on the marketplace via the finish of this yr, all reviewed and authorized through Apple to lend a hand insure buyer safety when the use of them. Our Apple Retail outlets are glorious puts to find and know about those nice merchandise for the hooked up house.

With our newest running methods, system studying is making our services smarter, extra intuitive, and much more private. We have been the use of those applied sciences for years to create higher consumer reports, and we've got additionally been making an investment closely — each thru R&D and acquisitions.

Nowadays, system studying drives enhancements in numerous options throughout our merchandise. It allows the Proactive options in iOS 10, which provide tips on which app you may need to use or which contacts you could need to come with in an e mail. Our digital camera and photograph device makes use of complex face popularity that will help you take higher footage, and object and scene popularity to lead them to more uncomplicated to type and in finding. Device studying makes the health options of Apple Watch extra correct, or even is helping prolong battery lifestyles throughout our merchandise.

System studying regularly is helping Siri get even smarter in spaces akin to working out herbal language. We've got prolonged Siri to paintings in lots of new tactics via opening it to developers, and maximum lately through making Siri to be had to Mac customers in macOS Sierra. We are already seeing nice momentum in simply the first few weeks from developers leveraging the Siri and speech APIs, and we are more than happy with the engagement it is riding with Siri.

Taking a look forward, we are seeing some very thrilling tendencies in India. Reliance GO is rolling out a first-of-its-kind all-IP community in India with 4G protection in 18,000 towns and 200,000 villages throughout the nation. They are providing a loose yr of carrier to clients of latest iPhones, and we are partnering with them to make sure nice iPhone efficiency on their community. Our iPhone gross sales in India have been up over 50% in fiscal 2016 in comparison to the prior yr, and we consider we are simply starting to scratch the surface of this massive and rising marketplace alternative.

We are additionally more than happy with the growth of our undertaking marketplace projects, which proceed to increase. Simply remaining month, we introduced a partnership with Deloitte to lend a hand firms temporarily and simply develop into the means they paintings by way of maximizing the energy, ease of use, and safety of the iOS platform. Deloitte is developing a singular Apple follow with over 5000 strategic advisors targeted on serving to companies grow to be paintings purposes throughout the undertaking.

We are additionally taking part on the construction of Undertaking Subsequent, a brand new Deloitte consulting carrier designed to lend a hand shoppers throughout greater than 20 industries take complete good thing about the iOS ecosystem, and temporarily expand tradition answers thru speedy prototyping.

As we shut the books on some other fantastic yr, I would love to thank our gifted workers for his or her arduous paintings and keenness for making the very best merchandise in the global; our superb developer group for his or her relentless creativity; and our glorious consumers, industry companions, and shareholders for his or her loyalty and reinforce.

Now I'm going to hand it over to Luca to percentage extra main points on the September quarter.

Luca Maestri on the ones main points


Luca Maestri

Thanks, Tim. Income for the September quarter used to be $46.9B, towards the top finish of our steerage vary. Our income grew very strongly in lots of rising markets, together with Russia, Turkey, the Center East, Thailand, and Vietnam. And we proceed to peer forged expansion in Japan and in Latin The united states. Gross margin used to be 38%, at the most sensible of our steerage vary, because of favorable value efficiency.

Running margin used to be 25.1 % of income and web source of revenue used to be $9B. Diluted earnings in keeping with percentage have been $1.67, and money drift from operations used to be $16.1B, which is a brand new listing for the September quarter.

For main points through product, I will be able to get started with iPhone. We bought 45.5M iPhones in the quarter because of the very a success release of iPhone 7 and iPhone 7 Plus, and endured robust call for for different iPhones. Together with 2.7M iPhones that have been in transit at the finish of the quarter, we higher iPhone channel stock via 2.5M devices, and we exited the quarter smartly under our 5-7 week goal vary of channel stock.

We now have noticed a robust iPhone expansion in lots of markets round the global together with Canada, Latin The us, Western Europe, Japanese Europe, the Center East, India, and South Asia. iPhone gross sales in Higher China declined right through the quarter, however preliminary buyer reaction to iPhone 7 and 7 Plus provides us self assurance that our December quarter efficiency in China can be much better on a year-over-year foundation than our September quarter effects, whilst we lap the all-time-record duration from a yr in the past.

International call for for iPhone 7 and 7 Plus has considerably outpaces provide, in particular on iPhone 7 Plus. And we are running very onerous to get the new iPhones into the arms of our consumers as temporarily as imaginable.

iPhone ASP higher to $619 in the September quarter, which used to be above our expectancies. That is up from $595 in the June quarter, once we introduced iPhone SE, and we had a vital channel stock relief. We think iPhone ASP to extend markedly on a sequential foundation to a degree very similar to our ASP in the December quarter ultimate yr.

Buyer pastime and delight with iPhone stays extraordinarily robust. In the U.S., as an example, the newest survey fielded via 451 Analysis discovered that amongst shoppers making plans to buy a smartphone inside of 90 days, 65 % deliberate to buy iPhone, with the present iPhone house owners reporting a 97 % buyer delight price.

Amongst company smartphone consumers, the newest survey measured a 95 % iPhone buyer delight score, and located that of the ones making plans to buy smartphones in the December quarter, 79 % deliberate to buy iPhone.

Turning to Products and services, we generated an all-time listing $6.3B in income, with an building up of 24% over a yr in the past. The App Retailer expansion price has now speeded up for 5 consecutive quarters, achieving 43% in the September quarter. The App Retailer stays the most well-liked vacation spot for each consumers and developers. In keeping with App Annie, it generated 100% extra international income than Google Play in the September quarter.

Along with the nice efficiency from Apps, we noticed robust double-digit income expansion in different different carrier classes, and Apple Pay transaction quantity has grown dramatically, as Tim discussed.

Subsequent I would like to speak about the Mac. We bought 4.9M Macs, dealing with a troublesome year-over-year examine, given the release of latest Macs in the spring of 2015. In spite of this, our Mac put in base reached a brand new all-time top at the finish of the September quarter, and we're going to have some thrilling information to percentage with present and long run Mac house owners very quickly.

We ended the quarter beneath our 4-5 week goal vary for Mac channel stock.

Turning to iPad, income used to be flat in comparison to remaining yr. iPad ASP used to be $459, $26 upper than a yr in the past, with building up pushed by way of the new iPad Professional line. We bought 9.3M iPads and we decreased channel stock by way of about 80,000 devices, thrilling the quarter under our 5-7 week goal vary.

WE proceed to be extremely a success, each with regards to marketplace percentage and buyer metrics, in the segments of the tablet marketplace the place we compete. Fresh knowledge from NPD signifies that iPad won percentage in the U.S. tablet marketplace in the September quarter, and had 82 % percentage of drugs priced above $200.

In August, 451 Analysis measured a 96% shopper pride fee for iPad mini, 95% for iPad Air, and 93% for iPad Professional. Amongst U.S. shoppers making plans to buy a tablet inside of the subsequent six months, 73% plan to buy an iPad, greater than 8 occasions the acquire purpose price of the subsequent very best logo measured, with iPad Professional as soon as once more the best choice for deliberate purchases. Company consumers reported a 94% delight price for iPad, and a purchase order intent of 68 % for the December quarter.

In the Undertaking marketplace we are seeing some nice examples of iPad and Mac deployment. Our mobility spouse program continues to develop more potent, with over 120 companions round the global providing adapted answers to companies of all sizes. Revel Methods, a number one iPad level of sale answer spouse, just lately introduced an international settlement with Shell retail to put in force Revel's iPad-based POI device and products and services at 34,000 Shell places international, together with give a boost to for Apple Pay in nations the place Apple Pay is to be had.

IBM has simply launched its new knowledge on the nice result of its Mac roll-out. With extra workers opting for Mac than ever ahead of, there at the moment are greater than 90,000 Macs throughout the group along with 48,000 iPads and 81,000 iPhones. IBM reviews that PCs are 3 times the value to regulate, force two times the selection of enhance calls, and are 5 occasions much more likely to require a follow-up appointment to get to the bottom of a topic than Macs. Because of a lot decrease strengthen value and considerably upper residual worth, the corporate is saving up to $535 in keeping with pc when evaluating the overall value of Mac possession to a PC over a four-year lifestyles cycle.

Let me now flip to our money place. We ended the quarter with $237.6B in money plus marketable securities, a sequential building up of $6.1B. $216B of this money, or 91 % of the overall, used to be out of doors of the United States. We problems $7B of debt in July, leaving us with $79B in time period debt at the finish of the quarter. We returned over $9B to buyers all the way through the September quarter as follows: We paid $3.1B in dividends and equivalents, we spent $3B on repurchases of 28.6M Apple stocks to open-market transactions, and we introduced a brand new $3B ASR, leading to preliminary supply and retirement of 22.5M stocks. We additionally finished our 7th speeded up percentage repurchase program, retiring an extra 12.3M stocks. The entire buyback process all the way through the quarter lowered our percentage rely by way of 1.5 %. We've now finished $186B of our present $250B capital go back program, together with $133B in percentage repurchases.

In the September quarter we additionally finished 4 acquisitions, and incurred $3.6B in capital expenditures. Our overall CapEx for the yr used to be $12.8B. Our efficient tax fee for the quarter used to be 26%, somewhat upper than the 25.5 % we guided to, as a result of a special geographic mixture of earnings relative to our unique expectancies. Our tax fee for the complete fiscal yr used to be 25.6%.

As we transfer forward into the December quarter, I would like to study our outlook, which incorporates the varieties of forward-looking knowledge that Nancy referred to at the starting of the name. We think income to be between 76 and 78 billion. This represents a go back to expansion over the all-time income list set in the December quarter a yr in the past. We think gross margin to be between 38 and 38.5 %, we think OpEx to be between 6.9 and 7 billion, we think OINE to be about 400 million, and we think the tax fee to be about 26 %.

Additionally these days our Board of Administrators has declared a money dividend of 57 cents in keeping with percentage of not unusual inventory, payable on Nov. 10, 2016, to shareholders of list as of Nov. 7, 2016.

With that, I would love to open the name to questions.

On iPhone and annual upgrades 


Gene Munster, Piper Jaffray: Just right afternoon and congratulations. Tim, now that we are a month in the iPhone 7, have you ever noticed anything else measurable on the subject of the rising development of annual upgrades. And 2d is, traditionally in relation to new product classes you guys have all the time seemed for distinctive merit ahead of entering a phase, and I am keen on the automotive, and there are a large number of rumors in the market, and would really like your point of view on the way you take into consideration a bonus that Apple may just upload in the auto area.


Tim Prepare dinner

When it comes to iPhone 7, Gene, the carriers that had improve plans, the knowledge that we've got from them is that call for is very tough. However from a global viewpoint, the fact is that call for is outstripping provide in the overwhelming majority of puts, in particular on the iPhone 7 Plus. And so the state of affairs at the second, it is tricky, in the early weeks to distinguish. However on an anecdotal foundation, it is transparent the improve methods are a win.

I will be able to't talk about rumors, however as you recognize, we search for ways in which we will be able to fortify the buyer's revel in on other units of goods, and we are all the time shopping at new issues, and the automotive area generally is a space that it is transparent there is a large number of applied sciences that may both turn out to be to be had or will be capable of revolutionize the automotive revel in, and so it is fascinating from that viewpoint. However without a doubt not anything to announce lately.


Munster: Only one fast follow-up on the subject of provide. Do you assume we're going to be at equilibrium by way of the finish of the quarter, iPhone-wise?


Tim Prepare dinner

It is exhausting to mention. I consider that on iPhone 7 we will be able to, on iPhone 7 Plus I am not positive. I would not say "sure" at this level as a result of the underlying call for seems extraordinarily robust on each merchandise, however in particular on the iPhone 7 Plus as opposed to our forecast going into the product release.

On the additional week in the monetary quarter, and iPhone stock


Katie Huberty, Morgan Stanley: Luca, are you able to lend a hand us perceive what is embedded in income steerage for the additional week in addition to any rebuilding of channel stock, given all the primary merchandise are operating under goal? I am simply looking to get at whether or not you spot income and particularly iPhone expansion year-on-year on extra of a sell-out foundation while you regulate for the ones two elements.


Luca Maestri

Let me say a couple of issues on the 14th week and income out for the December quarter. Take into account that the December quarter a yr in the past for us used to be an all-time quarterly income listing. We expect we will be able to develop this yr. As Tim stated, the hobby from consumers on iPhone 7 and 7 Plus is very robust. The power of our products and services industry, you will have noticed we now have grown 24 % in September, we expect we will be able to keep growing really well into the December quarter. You discussed the 14th week, and a couple of additional days do lend a hand us this quarter, however I feel you need to understand that there are different elements that move and offset those additional few days. As you understand, the release timing of the new iPhone is other this year--we had the first 9 days of sale this yr hit Q4, there have been handiest two days remaining yr, so the cadence has moved extra towards Q4 this yr as opposed to Q1 final yr. As you already know, we higher iPhone channel stock by way of 3.3M devices in the first quarter of 2016. As Tim stated, we're very provide constrained on iPhone 7 Plus this yr, we are without a doubt extra provide constrained this yr than we have been a yr in the past. After which take into account that there are a few issues that have an effect on the examine as smartly, which is the reality that a yr in the past we had an award for patent infringement of $548M, which is clearly a one-off merchandise that is now not going to copy this yr. And in addition, the foreign-exchange surroundings stays tricky and we think FX to be about $650M headwind on a year-over-year foundation into the December quarter. So I am hoping that provides you with slightly of a way that, while you be mindful these types of elements, we consider that this is a just right steerage for the December quarter.

On iPhone R&D


Katie Huberty, Morgan Stanley: That is nice colour, thanks for that. Practice-up for Tim: What will have to we learn into the undeniable fact that R&D has greater than doubled over the previous 3 years whilst gross sales expansion used to be type of a 5th of that. Are R&D investments simply much less environment friendly than they have been in the company's historical past, or will have to we take into accounts that as incremental spend for merchandise that have not but come to marketplace.


Tim Prepare dinner

There is obviously some quantity of R&D which might be on merchandise that these days are in the construction segment and feature now not reached the marketplace, and in order that's part of it. And we really feel in reality nice about the issues that we have got. We've got additionally put a large number of emphasis on our products and services industry as smartly, and on making the ecosystem even higher, and so we are expectantly making an investment in the long run and that is the reason the explanation why you spot the R&D spend expanding.

On China


Shannon Pass, Pass Analysis: Tim, are you able to communicate somewhat extra about China? Simply how you are enthusiastic about it, the place you are seeing force. I do know you discussed that you are expecting to peer a vital rebound right through the first quarter. What are your consumers telling you about the call for in China?


Tim Prepare dinner

To kind of again up from our effects for the quarter, the 90-day clock, and take a look at the complete yr of '16, we have been down 17 % in comparison to the fiscal yr '15, which used to be up 84 % from the earlier yr. So in case you take a look at '14 to '16, the income grew 52% and the CAGR used to be 23%, that are actually lovely just right effects. Additionally as you most likely know, the fiscal yr '16 efficiency used to be harm by way of the devaluation of the foreign money, which affected it about 3 %. So the underlying industry efficiency used to be 14 % down. And so why used to be it down? There is numerous causes, however the biggest one in our view is that while you take a look at what came about in '15 in China, we had a surge of upgraders that got here into the marketplace for the iPhone 6 or iPhone 6 Plus, and the improve charges greater rather extra in Higher China than in different places round the global. And so when that improve price in fiscal yr '16 returned to a extra standard improve price, which might be comparable to what we noticed with the iPhone 5S, it had additional to fall. And in order that's the primary explanation why in our view that you simply see a distinction.

Now, that spun or created some other factor for us, as a result of we did not forecast that correctly, so in Q1 of remaining yr we installed an excessive amount of channel stock, and feature been resetting the channel stock over the few quarters that got here after it. And so the ones two problems, which actually the primary one is the first one and the 2d one used to be a symptom of it, are in our perspectives the primary factor.

Now browsing ahead, the reaction to the iPhone 7 and 7 Plus has been very sure. It is very arduous to gauge call for, as you already know, if you find yourself promoting the whole thing you are making. And so we're going to in finding out extra in the quarter however we are assured sufficient to come up with guys steerage that we are returning to expansion this quarter, which clearly feels excellent for us. And from a longer-term viewpoint, out of the 90-day clocks and so on, we're very bullish on China. You understand, we proceed to peer a center elegance that is booming there, there may well be some type of a brand new commonplace in the financial system, however a brand new commonplace there is nonetheless a just right expansion price. And so with the choice of other folks rising into the center elegance and the LTE adoption fee being nonetheless moderately low--around 45, 50 % or so--I feel we proceed to have a in reality just right alternative there. And so we proceed to center of attention considerably in China.

On Apple's acquisitions


Katie Huberty, Morgan Stanley: Are you able to communicate somewhat bit about acquisitions? I do not imply the smaller ones that you've got completed at an ordinary cadence, however there used to be obviously a rather massive one introduced, no less than, this week in the content material global. And particularly in the event you have the ability to have repatriation of a few of the money at a low tax price most likely with the subsequent management, so simply if you have to give an general view of ways you take into accounts acquisitions that may well be slightly bit higher than standard.


Tim Prepare dinner

We are open to acquisitions of any measurement which are of strategic worth the place we will be able to ship higher merchandise to our consumers and innovate extra, and so we take a look at an entire number of firms, and founded on that we select whether or not to transport ahead or now not. However we are undoubtedly open and we surely glance.

On why iPhone income is not forecasted to consume Samsung's lunch


Toni Sacconaghi, Berenstein: I assume a cynic may just say, uh, Apple is making the most of an additional week of this quarter and is making the most of Samsung being in whole disarray, and but out of your steerage it is unclear that iPhone unit expansion might be up or — not at all up greater than low unmarried digits, implied out of your steerage.

And I recognize a few of the, uh, problems round channel stock construct, and the timing of the release, but when I simply stand again from that and say "You might have terrific new merchandise, your primary competitor is mendacity down, you've gotten a huge — a vital contribution from an additional week (arguably 7 or 8%), and but the iPhone expansion is type of flat-ish." What does that actually say about how buyers will have to take into consideration iPhone on a sustained foundation, going ahead? And is it affordable to assume that this is an ongoing, rising industry for the corporate?


Luca Maestri

Tony, let me take this one. I feel you discussed, y'know, a variety of the issues which are affecting us in the December quarter, and I went thru them with Katie only a few mins in the past. You are proper, we have now were given an additional few days; you realize really well the release timing is other; you realize that we higher iPhone channel stock to 3.3 million devices a yr in the past. I discussed two problems that have an effect on us — you understand, the one time from a yr in the past that you simply clearly want to exclude from the examine, and the results that is the fact of our industry presently.

However perhaps the maximum necessary component of this is the incontrovertible fact that we are provide constrained on 7 and 7 Plus, and so while you speak about out of competition, it is not in particular related to us at this time as a result of we're promoting the entirety that we will be able to produce. And so once we take a look at a lot of these issues in its totality, we expect that y'know, the — for the overall corporate, in fact, we consider that income's gonna develop, y'know, however we do not get into particular merchandise from a unit point of view giving steerage.

And so we really feel very assured about, y'know, the trajectory for the corporate and for iPhone going ahead.

On Apple TV and content material acquisitions


Toni Sacconaghi, Berenstein: Tim, if I may just ask you one, please. You've got talked in the previous about tv being a space of intense hobby. I used to be questioning if you want to reaffirm that observation, if that is nonetheless the case. And moreover, given what is taking place with acquisitions, how widely you take into consideration the position of content material — Apple has began developing, on an overly restricted scale, a few of its personal content material — and whether or not you assume content material advent and possession is necessary to Apple, or whether or not Apple in the end sees its position in the worth chain as being extra round ecosystem and distribution.


Tim Prepare dinner

I might ascertain that tv is a — has intense pastime with me and plenty of folks right here. Relating to proudly owning content material and developing content material, we've began with focusing on some unique content material, as you indicate; we now have were given a couple of issues going there that we've got mentioned. And I feel it is a nice alternative for us, each from a advent viewpoint and an possession viewpoint. And so, it is a space that we are focusing on.

On products and services income and constant consumers


Simona Jankowski, Goldman Sachs: Luca, I sought after to dig into the products and services industry a little extra. As you identified, it speeded up once more to 24%. How does that examine to the tempo of expansion of the set up base, simply to lend a hand us decouple how a lot of it is consumption-driven on a per-user foundation as opposed to the base as an entire?


Luca Maestri

The set up base quantity is one thing that we speak about periodically. Remaining time we mentioned it used to be in the January name. It is rising — our set up base is rising really well, which is essential for us. It is rising on all primary merchandise, and it is rising, in fact, in overall.

While you take a look at our products and services income, the expansion of the products and services income has been accelerating right through the process the yr, throughout a duration when, as you recognize, our income got here down fairly. So what that suggests, in follow, is that what we're seeing with our consumers that eat our products and services is that — the folks which are if truth be told making the most of our products and services, over the years, they have a tendency to spend increasingly more on our products and services. We now have were given consumers who're very engaged with our merchandise, very unswerving, and so you spot this upward trajectory of our products and services industry. It is not handiest with the App Retailer, however y'know, the a number of classes which might be rising really well for us. Tim discussed Apple Track, however we have now were given different portions of the industry that proceed to do smartly, whilst I stated, right through a time period when our gross sales have come down somewhat.

We're going to regularly update this publish as the name continues, so keep tuned!

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