Question about price reductions on iPhones. Cook: "We did it because we wanted to make the iPhone more accessible to a broader market." Mentions post-pay market. It also has advantages in the pre-pay markets. We did it for both markets.
Follow up on component pricing and unibody casing. Cook: Currently investigating the casing issue, already priced into our guidance. NAND, DRAM and LCDs pricing looks very favorable. Generally a very positive market from supply point of view.
Question about iPad distribution rollout and new markets. Cook: We are in 90 countries with iPad. We have about 40,000 points of sale around the world. 50,000 on iPod, 120,000 for iPhone. With the iPhone numbers, it's crystal clear there was a slowdown. That is not the case with iPad. Somewhere in the quarter we achieved a supply-demand balance with iPad and stayed there for the rest of the quarter. In terms of other countries, we have already started placing efforts in the countries I mentioned. There are some countries that have protectionist structures for products that aren't built at least in part there. In China we did everything we know how to do, from stores to advertising. We won't be doing all of that in the countries I named, but we'll do portions of it.
Question about thoughts dividends or share buybacks, now that you are CEO? And what about PC cannibalization. Cook: I do believe we are seeing cannibalization. Some people are buying an iPad rather than a Mac. But more people are buying an iPad rather than an Windows PC. With cannibalization like this, I hope it continues. Regarding cash: Cash not burning a hole in our pocket. We're not the kind of people to do silly things with it. We've acquired several companies, bough intellectual property, invested in production, built out stores. But I'm not religious about cash. It's a topic for the board on an ongoing basis and we will continue to discuss it. Oppenhiemer points out that most of that cash is overseas.
Question: Is buying back shares a philosophical white flag that you can't create value through innovation. Cook: We have a pipeline that is unbelievable. I view them to be totally distinct things. The cash is always a topic -- we will always do what is in Apple's (i.e. not investors) best interest.
Cook talks about the size of the 1.5 billion handset market. We are very focused on that.
Question about the extra week. Is it truly linear? 14th week ends New Years Day, a big day for Apple, but not the biggest.
Question about Japan. Disparity between revenue vs. units larger than other regions. A huge bump last year from iPhone 4 launch in Japan, so a tough compare. On the other had gained a lot on the Mac side in Japan.
Question about iPad in terms of price of the device. Cook ducks. Reiterates that he sees the tablet market as a huge opportunity and repeats claim that Apple has fantastic things in the pipeline (presumably the iPad 3).
That's a wrap. A replay of the webcast will be available for two weeks at replay 888-203-1112; passcode 2922403.