Will Ritter

Apple Plays the Conservative Card Despite Record Quarter

Reading the transcripts, it seems to me that the analysts were overly focused on margin related items and of course, Jobs' health. Ironically, one of the factors to negatively impact gross margins is the success of the 3g iphone launch. Notice the breakdown of revenue and expense recognition timing in Peter Oppenheimer's answer to Jeff Fidacaro of Merrill Lynch during the quarterly conference call:

"Sure. We incur our OpEx in engineering, sales, and marketing related to the iPhone currently, while recognizing the revenue over -- and product costs over a two-year period of time. And we do have launch expenses for the iPhone 3G that are built into the September quarter and that’s provided for in the $1.27 billion guidance that I gave you."

Transcript is here:

seekingalpha.com/artic...