iPhone news from Apple's Q2 FY09 quarterly earnings call

At the end of the day yesterday, Apple held its Fiscal Year 2009, Second Quarter earnings call.  As always, Apple executives read a prepared statement and then answered questions from analysts.  Apple has a lot to be happy about; this was Apple's best non-holiday quarter in the history of the company -- and this is during a recession when other companies are laying off people left and right.  Wow.

Just like last quarter, there were a number of interesting things said about the iPhone by Apple's COO (and acting CEO) Tim Cook and the other Apple executives.  Here are some of the highlights:

• iPhones are now sold in 81 countries.
• iPhones are selling great.  There was only a small decline in iPhone sales this past quarter from the busy holiday quarter, which was a surprise to Apple.  And with iPhone Software 3.0 coming out [not to mention whatever new iPhone model that we all know Apple will release this summer] Apple believes that even more people will want to buy iPhones in the future.
• Apple sold 3.8 million iPhones during the past quarter.  To date, Apple has sold around 21 million iPhones and around 16 million iPod Touches for a total of around 37 million devices using the iPhone operating system.  Pointing out the obvious, the Apple executives noted that the iPhone a huge platform for developers.
• Indeed, iPhone apps are selling like hotcakes.  Apple noted that it is just hours away from selling its 1 billionth app.
• The iTunes app store now offers over 35,000 apps. To put this in perspective, three months ago during the last quarterly earnings call, Apple was thrilled to have over 15,000 apps.  The continued exponential growth in the number of apps is just staggering.
• Apple has no plan to change its relationship with AT&T.
• The iPhone has the highest overall customer satisfaction of any smartphone on the market.
• On the earnings call three months ago, Tim Cook referred to other smartphones such as the Palm Pre and said that Apple would be very serious about protecting its intellectual property.  An analyst asked why Apple hasn't taken any actions to protect its IP this quarter, and asked whether it was because the Palm Pre isn't on the market yet.  Cook didn't answer the question, instead just saying that "competition is great, we think it makes all of us better, as long as other companies invent their own stuff."
• Tim Cook also made very vague references to Apple's future iPhone plans, stating that "between the product plans that we've got and the app store and the software that you've seen and then things I can't talk about, we have a plan that we believe continues to make us the leader in the space, continues to keep us years ahead of others, and one of the things that we will make sure is that we don't leave a price umbrella for people."  So what I hear Cook saying is (1) Apple has some surprises in store for the iPhone -- yeah! -- and (2) Apple will keep iPhones affordable so that people are not tempted to spend less on a competitor's product -- yeah again.

Finally, Tim Cook had an interesting statement on netbooks.  A lot of people are wondering whether Apple has plans to release a netbook, perhaps based on the iPhone OS.  When asked about netbooks, Tim Cook responded essentially that the current netbooks are terrible, the iPhone is currently a good alternative, and Apple is thinking about a possible netbook.  He said:

For us it's about doing great product.  And when I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens and just not a consumer experience and not something that we would put the Mac brand on, quite frankly.  And so it's not a space, as it exists today, that we're interested in, nor do we believe that customers in the long term would be interested in.  It's a segment that we would choose not to play in.  That said, we do look at the space, and are interested to see how customers respond to it.  People that want a small computer, so to speak, that does browsing and e-mail might want to buy an iPod Touch or they might want to buy an iPhone.  And so we have other product to accomplish some of what people are buying netbooks for.  And so in that particular way, we play in an indirect basis.  And then of course if we find a way where we can deliver an innovative product that really makes the contribution, then we'll do that.  And we have some interesting ideas in the space.  The product pipeline is fantastic for the Mac.  As we look back over the last 4+ years, 17 of the 18 quarters of the last four and a half years, we've exceeded the market rate of growth.  To exceed it in this horrendous economy I think is quite an accomplishment, especially when you look at these very low priced netbooks, that I think it is a stretch to call a personal computer, are really propping up the unit numbers from the industry as a whole.  So we feel great about our performance, it's a very solid performance especially in this environment, and the pipeline looks fantastic.

If you want to listen to the earnings call yourself, you can do so over the next two weeks by downloading the podcast from iTunes: .  Or you can view a computer-generated transcript of the call on this page at the Seeking Alpha website.

It is great to see Apple having such a great quarter, especially during these troubling economic times.  And the iPhone is clearly a key reason that Apple is doing so well.