Notes Floating Around

(On iPods) So the first thing I’d like to do, is give you an update on our music business. As you know, we’ve got the iPod, best music player in the world. We’ve got the iPod Nanos, brand new models, colours are back, and we’ve got the amazing new iPod Shuffle. The iPod, in addition to being the world’s best MP3 player, has become the world’s most popular video player. And by a large margin. The iPod Nano is the world’s most popular MP3 player, by a wide margin. And the new Shuffle, is the world’s most wearable MP3 player. So we had an incredible lineup for this holiday season. All refreshed and new products.

(iTunes Music Sales) I’d like to tell you some new things about iTunes now, that are pretty exciting. Number 1, we have crossed a major milestone. We have sold over 2 billion songs on iTunes. It’s amazing. Now, there was an article recently that said iTunes sales had slowed dramatically. I don’t know what data their looking at, but this is our data, and what we see is iTunes sales were really up this past year. [Shows graph of 30 mil. songs in 2003, 191 mil. in 2004, 614 mil. in 2005, 1.2 bil. in 2006]. It took us over 3 years to get to a billion songs, we got our 2nd billion in 10 months in 2006. And growing off us a 600 million song base we doubled it in 2006. So we couldn’t be happier with the growth rate of iTunes, and selling 2 billion songs. We are selling over 5 million songs a day. Isn’t that unbelievable? 5 million songs a day. That’s 58 songs every second, of every minute, of every hour, of every day. And the last time we talked to you, we said that we were the 5th largest music reseller in the US. Now all these other guys sell music on CDs, of course, we sell it online. But if you add up all the music that’s sold, we were the 5th largest reseller. Because of the growth of iTunes I am pleased to report that we have now passed Amazon, we sell more music than Amazon, and we are now number 4. And you can guess who our next “target” might be. So that’s an update for music. [Shows slide of list, top to bottom: Wallmart, Best Buy, Target, iTunes, Amazon].

(iTunes TV and Movies) Now I want to talk about TV shows. We’ve got awesome TV shows on iTunes. As a matter of fact we have over 350 TV shows you can buy episodes from in iTunes. And I’m very pleased to report that we have sold now 50 million TV shows on iTunes. Isn’t that incredible? Now, let me go on to movies. When we started with television shows, the pioneering partner we had was the Walt Disney company. They decided to throw in with us and sell TV shows, and boy did it work. When we decided to sell movies, they were right there with us again as our pioneering partner to sell movies. And I am really pleased to announce that in the first four months of selling movies, we have sold 1.3 million movies on iTunes. Which I think has exceeded all our expectations. And today, we have a new partner, joining the Walt Disney company to sell movies on iTunes, and that is Paramount. Paramount is going to be selling movies on iTunes, and we’re thrilled because they have some awesome movies. Let me just show you a few of the titles that are going up as we speak… all six Star Trek movies… So we are going to moving up from the 100 movies we’ve offered so far to over 250 movies now offered on iTunes, these are getting up as fast as we can over the next week or so, and we hope to be adding even more movies as other studios throw in with us, as [sic] 2006 rolls on. And that’s an update on iTunes.

(On Zune And Marketshare) Now as I said, we had a very strong lineup of music players for this holiday season. We always have stiff competition. That’s just part of this business. And we had a new competitor this last holiday season. Which was of course, Microsoft’s Zune… So how did they do? Well we don’t have data for December yet, because it’s not out until next week or the week after, I forget. But we have data for November which was their launch month, should’ve been real big. [Shows slide of pie chart as he describes, chart source: "NPD for November 2006"]. And they garnered 2% market share. iPod had 62% market share, and the rest had 36(%). Now again, we don’t have data for December, you know, we went up quite a bit in December, in terms of market share, and we’ll find out how they did. 2% in their launch month. So no matter how you try to spin this, um, what can you say? So that’s an update on how we’re doing in the music business.