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Apple Has First Earnings Decline In More Than A Decade (go.com) 284

An anonymous reader writes: Apple has announced its first-ever decline in revenue in the past 13 years as its iPhone sales have slowed down. Apple posted quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion. Last year, the company posted revenue of $58 billion and net income of $13.6 billion. The reason Apple has been so successful is because of the iPhone, which was first released in 2007. What goes up must come down -- and we're starting to see that now. The success of the iPhone is starting plateau and ultimately decrease now that consumers are finding less of a reason to upgrade to the latest and greatest smartphone. Apple CEO Tim Cook pointed to weakening currencies worldwide as one of the obstacles the company would face as iPhone sales were up less than 1 percent year-over-year last quarter. Gene Munster, managing director and senior research analyst at Piper Jaffray, told ABC News, "This has been anticipated for three months now. The reason is nothing [that] is wrong with the iPhone." Munster said this is not worrisome to Apple and that iPhone sales will likely increase by the end of the year when the next iPhone(s) is released.
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Apple Has First Earnings Decline In More Than A Decade

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  • Without Steve Jobs (Score:5, Insightful)

    by tomhath ( 637240 ) on Tuesday April 26, 2016 @06:01PM (#51992329)
    Apple is living on borrowed time. They need to come out with something disruptive, but all they can do is incremental upgrades.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      This is probably true. However, the broad market is down across the board. Everyone seems to be warning except banks. That is not a good sign.

    • by macs4all ( 973270 ) on Tuesday April 26, 2016 @06:12PM (#51992395)

      Apple is living on borrowed time. They need to come out with something disruptive, but all they can do is incremental upgrades.

      I guess it IS time to haul out the old Tagline:

      "Apple: Proudly going out of business for Forty years..."

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Well, they were. They had the Apple 2, which was there only selling product for years. Then Jobs came back just as the company was about to hit bankruptcy, the really were going out of business. But that time it was finally the right idea at the right time. The idiot friendly PC was a useless idea in the 80's, and perfect for 1999. Just like the i-phone was perfect for 2007.

        But now the guy with the ideas, good or bad, is gone, and there's an accountant in charge. And like Ballmer with Microsoft, he might be

    • You mean like a car?

      • The Apple car will be the most beautiful car ever, completely seamless because it does away with doors. The customer is factory installed in the leather seats and will die together with the car.
    • What about... an iPhone that is too big for your pocket and cannot make phone calls!
    • Nonsense. I'm no Apple fanbois (feel free to read my comment history, I'm not exactly pro-Apple) but when you have the kind of cash that Apple has, you're basically immune to disruption (putting aside Apple's other weapon, being that they are basically a religion and it's already proven some will stick with Apple, regardless). People talk about some iPhone killer coming along and knocking Apple over but they don't seem to understand that Apple doesn't need to out-innovate anyone. Let's imagine some company
    • by U2xhc2hkb3QgU3Vja3M ( 4212163 ) on Wednesday April 27, 2016 @01:11AM (#51994113)

      In the last keynote that talked very briefly about the "new Mac mini", they listed some bullet points: [wordpress.com]
      - 4th-gen Intel Core processors
      - Intel Iris and HD Graphics 5000
      - PCIe-based flash storage
      - 802.11ac Wi-Fi
      - Two Thunderbolt 2 ports

      Imagine my surprise when the low-end model was only running at 1.4GHz, but my complete shock that not all models had PCIe-based flash storage. In fact, the low-end and mid-range models not only have a much slower hard disk drive but they're slow 5400-rpm drives. [apple.com]

      For the prices that Apple are asking for the Mac minis, the low-end should have come with 128GB, the mid-range with 256GB and the high-end with 512GB.

      There's also another Keynote when they introduced an update to one of their existing laptops and they started with buzzwords like "cutting edge" or "revolutionary" but then the main feature was that it was a bit thinner than the previous model. This is completely useless, we are at a point where there is no benefit at all to making things thinner. The size should stay the same and they should increase battery life, CPU and GPU power, put more RAM in the damn things, etc.

      • Laptops (non-gaming) haven't benefited from being thinner for at least a decade. I tend to agree, we should be able to have a reasonably thick laptop with a nice battery life that could last for... I dunno, days?

        • by bkr1_2k ( 237627 )

          As is typical here (and everywhere else, honestly) people seem to think their intended use case fits all use cases. It doesn't. Some people really do actually travel and want a thin, lightweight computer and don't worry too much about battery power as long as it lasts through a reasonable flight--less of an issue as more commercial planes get power stations at every row. Some people want something more robust but still reasonable for travel. Still others want something for gaming or serious number crunc

  • "The success of the iPhone is starting plateau and ultimately decrease now that consumers are finding less of a reason to upgrade to the latest and greatest smartphone."

    That's not even a sentence!
    Try it this way:
    The success of the iPhone is starting to plateau and will ultimately decrease now that consumers are finding fewer reasons to upgrade to the latest and greatest smartphone.
    • I read a clever article not long ago regarding a similar school of thought, but there was an interesting dissenting opinion that the plateau hadn't occurred yet... I believe advances are only going to be smaller incrementally until our communicator becomes more sophisticated than even Mr. Roddenberry ever imagined.
    • When Apple iPhone users have a phone that does more than they need or want to do and it does it well, why would they buy a upgraded version that does a little more things they won't use it for?
    • "The success of the iPhone is starting plateau and ultimately decrease now that consumers are finding less of a reason to upgrade to the latest and greatest smartphone." That's not even a sentence! Try it this way: The success of the iPhone is starting to plateau and will ultimately decrease now that consumers are finding fewer reasons to upgrade to the latest and greatest smartphone.

      Try it this way:
      The success of the smartphone is starting to plateau and will ultimately decrease now that consumers are finding fewer reasons to upgrade to the latest and greatest smartphone.

  • by QuietLagoon ( 813062 ) on Tuesday April 26, 2016 @06:08PM (#51992365)
    ... is the increase in stock buybacks. When a company starts buying back its own stock with the cash on hand, that means to me that the company cannot find a good place to invest that money.

    .
    Stock buybacks are a red flag for me, indicating that the company may be out of investment ideas.

    • by idji ( 984038 ) on Tuesday April 26, 2016 @06:13PM (#51992417)
      When a company buys back it owns stock it means they are convinced (or want to convince the market) that they are undervalued and that that can earn more by doing this and waiting for the market to catch up than by acquisitions and that they have convinced the stockholders that this is a better idea than paying it out to the stockholders=owners as dividends. It does not necessarily mean that they don't know how to invest.
      • by tomhath ( 637240 )
        It does (usually) make the stock price go up because Earnings Per Share go up; but there's really no reason the price should go up since all the company did was move money from one investment to another.
      • ...When a company buys back it owns stock it means they are convinced (or want to convince the market) that they are undervalued...

        So you seem to agree that the company buys back its own stock because it sees nothing else worth investing in. If there were something else that would give a better return to the company, then the company is obligated to make that other investment.

        .
        So it appears that instead of investing in new products, Apple's leadership feels it is a better investment to just buy back its own stock.

        That's hardly a good sign for the future of a company....

    • Or... (Score:5, Insightful)

      by Anubis350 ( 772791 ) on Tuesday April 26, 2016 @06:14PM (#51992425)
      Or they're sitting on such a huge pile of cash that any investing in anything that would eat a substantial portion of it would fundamentally change their business or attract anti-trust problems
    • by swb ( 14022 )

      It's been argued by some economists that slow growth has caused these companies to hoard cash, both out of fear of uncertainty and because they cannot find investments they believe will provide enough return to be worth the risk of investing.

      I think they also argue that this contributes somewhat to wealth inequality -- corporations are hoarding vast quantities of cash, effectively removing it from the economy. I think that I've read that even some banks have started charging negative interest to manage it

      • I think they also argue that this contributes somewhat to wealth inequality -- corporations are hoarding vast quantities of cash, effectively removing it from the economy. I think that I've read that even some banks have started charging negative interest to manage it because they themselves lack an effective means to park it.

        But that's a lot of shit. That's the banks' job, loaning out money to the rest of us so that we can make things happen in spite of some people acquiring all the wealth to themselves. The banks are also refusing to sell homes for what the market will bear, in spite of there being enough vacant homes in America to give every single homeless man, woman, and child multiples. They are presumably trying to crash the market completely, so that more people become homeless, and the banks can end up owning even more

    • Ordinarily that's true but Apple has a literal embarrassment of riches. They could spend $3B on fusion research and it would be a practical rounding error on their balance sheet. Unless they want to majorly branch out of consumer electronics (ok, the car thing) they are basically at the mercy of shareholders who are demanding some of that profit.

      Were I apple I would spend on basic research like batteries and displays. If they want their devices to be anything more than rounded-corners version of

    • is the increase in stock buybacks. When a company starts buying back its own stock with the cash on hand, that means to me that the company cannot find a good place to invest that money.

      For most companies I would agree with you, but Apple has something like $200billion in the bank. They could fund unicorns for the next century and still be ok financially. You have to do something with that money.

    • They keep reducing inventory, which means they expect lower sales, and as they do they’re reducing SG&A as well.

      Perhaps Apple has been sitting on its $230B cash hoarde because they expect a worldwide depression soon. In that case, the paltry sums they’re spending on share repurchases via bond sales, as well as dividend payments, are just the price they have to pay to maintain so much cash, rather than reinvesting it in the business.

      Apple is continuing to spend more and more on R&D, and t

    • I don't know where this idea of unlimited investment opportunities comes from.

      Apple is fundamentally limited by the number of good people they can hire, manage and put on good business ideas.
      You seem to be suggesting that if they accept there is a limit to this - then they are failing.

      I'd interpret it as them managing sensibly. They have a ridiculous amount of cash. They can do everything they want to, and much more.
      Rather than sitting on the excess cash - they're giving some of it back to the people who ow

    • Stock buybacks are a red flag for me, indicating that the company may be out of investment ideas.

      http://www.cnet.com/news/google-plans-first-ever-share-buyback/ [cnet.com] - And that was in 2009.

  • by Anonymous Coward on Tuesday April 26, 2016 @06:12PM (#51992397)

    Where the Apple under Jobs succeeded was going into relatively nascant markets (MP3 players, cellphones, tablets), and leapfrogging the pioneers in the field.

    The Apple under Cook has made mistakes by trying to enter in markets where people have been there for centuries (watchmakers.)

    There are still a lot of markets Apple can take, which the way have been paid for them:

    1: Car audio. Even the crackheads won't bust out a car stereo these days. Apple making an actual 1-2 DIN audio head would score big, as car makers would buy it. Car makers would actually be faced with a choice, just like existing CarPlay. Buy Apple's product, or go bankrupt and be replaced by companies that have.

    2: NAS hardware. Add some features and apps to the Time Capsule, and people would buy that thing in droves, essentially acting as a home server.

    3: Security in general. Make a new type of mechanical, or electro-mechanical key lock like the Medeco CLIQ, and now have tens to hundreds of millions of sales as people and businesses buy better security. The humble deadbolt can easily be improved and made far more secure.

    4: Go into the enterprise. Apple has name recognition, so if they made an enterprise desktop Mac, they would sell millions, at Mac prices. Especially with the ability to physically disable the camera/mic, and better AD GPOs.

    5: Make a security IoT infrastructure. Special chip on iPhone can run a secure app protocol over Bluetooth (which has encryption in itself), so people can open a safe with just a press of a button on the home button. IoT needs security, and here is where Apple can champion and profit.

    6: Sell iOS technologies as an embedded platform, as well as their custom ARM SoC.

    7: Get with Intel and VMWare, make an XServe model which has ESXi (upgradable of course) in firmware. Name recognition alone will get these in the door, and Apple was, for a few years, the second biggest storage vendor out there. Maybe it might be profitable to get back in there.

    • Before they go expanding into new markets they need to get back to their roots and fix some of their problems. They have gotten away from a simple UI on the iPhone that let you worked your way. Instead it forces you to go with their workflow. For example if you want to change the volume while inside the Music app you could just use a slider before but now you have to take some extra steps. For some reason you can't set the rating of songs or podcasts on the iPhone anymore. There are lot of things that they

    • Apple needs to become a church. Apple's biggest asset is its believers, and what else do you need? Nothing rakes in the gold like religion, it's the best business ever.

    • by tom229 ( 1640685 )
      Virtually all of the things you mentioned require Apple to back off, a lot, on their traditional model of tight control and exclusivity. This will be something their culture will have an extraordinary struggle with. A car that only works with iPhones? The manufacturer would have to be suicidal and definitely American. No other country with an auto manufacturer even has close to the market share to justify that. NAS hardware, general security controls, iot infrastructure - none of these areas offer an opport
    • Estimates are that they made about a billion dollars more than Rolex selling watches this year. I donâ(TM)t really disagree with the rest of your post, but making a mistake to the tune of $6.5 billion revenue is one that most companies would kill for. The watch isnâ(TM)t (and canâ(TM)t be, if you ask me) the same category as successful as the iPhone, but it doesnâ(TM)t make it a bad decision.

    • 1: Car audio. Even the crackheads won't bust out a car stereo these days. Apple making an actual 1-2 DIN audio head would score big, as car makers would buy it.

      Nope. You don't understand the automotive realm, so don't make declarative statements about it. The automakers are already going with head units which support both Apple CarPlay and Android Auto. Consumers want choice and automakers don't want to leave money on the table simply because they don't support a potential owner's phone. Believe it or not, they are way more likely to buy a different car than they are to change phones to match their car.

      2: NAS hardware. Add some features and apps to the Time Capsule, and people would buy that thing in droves, essentially acting as a home server.

      Apple already tried servers, and found that people won't pay t

    • by mjwx ( 966435 )

      1: Car audio. Even the crackheads won't bust out a car stereo these days. Apple making an actual 1-2 DIN audio head would score big, as car makers would buy it. Car makers would actually be faced with a choice, just like existing CarPlay. Buy Apple's product, or go bankrupt and be replaced by companies that have.

      Hahahahahahahahahahahahahaha.

      The car industry is far more powerful than Apple, who's power is waning. It's the car industry that will dictate terms to the head unit makers, not Apple to the car

    • I agree with you, more or less. Essentially, I think there are a lot of areas where Apple could invest and make a big difference to dramatically improve their offerings. If I had my choice I'd start with making their existing products more appealing for business use:

      1) Fix the problems with OSX. If you've had to support Macs, you've probably run into a couple problems that have been there for years, with no clear solution. Accessing file shares is slow and buggy. Their mail application tends to die wh

  • Apple has lost it's advantage; Android phones are selling like hot cakes, Apple's use of proprietary connectors and technologies has alienated many current and potential customers. Apple smart phones and tablets are no longer cutting edge and novel. They created a bubble and now it is popping.

    • Did you copy-paste this from 2003?
  • by Snufu ( 1049644 ) on Tuesday April 26, 2016 @06:13PM (#51992413)

    Apple buys Compaq.

  • more than that (Score:4, Interesting)

    by markdavis ( 642305 ) on Tuesday April 26, 2016 @06:18PM (#51992465)

    >"The success of the iPhone is starting plateau and ultimately decrease now that consumers are finding less of a reason to upgrade to the latest and greatest smartphone"

    And because consumers are also finding that there is often less of a reason to buy an iphone when compared to other high-end smartphones.

  • I think not. Earnings were well below analysts' expectations. Guidance for future earnings was worse than that. Not news for nerds. Propaganda for morons.
  • by Streetlight ( 1102081 ) on Tuesday April 26, 2016 @06:36PM (#51992555) Journal
    “Our team executed extremely well in the face of strong macroeconomic headwinds,” Apple CEO Tim Cook, said.

    Stock price is down $6 in early after close trading. I'd hate to see what the result would have been if the team had average performance.
    • “Our team executed extremely well in the face of strong macroeconomic headwinds,” Apple CEO Tim Cook, said. Stock price is down $6 in early after close trading. I'd hate to see what the result would have been if the team had average performance.

      Well, a little like Alphabet's shares? Their report sounds eerily like Apple's, yet they supposedly aren't doomed, even after the sharp stock price fall.

  • by c ( 8461 )

    Just as the prophecies foretold. My faith in random tech pundits is renewed.

  • by Texmaize ( 2823935 ) on Tuesday April 26, 2016 @06:46PM (#51992601)
    I know I will catch hell for this, but I will say it anyway. The problem is that Tim Cook is by far more interested than being a gay/liberal activist, than being a CEO of an innovative company. If you look at the various stories about him and apple over the last few years, you will see it is alway about the politics, not making "insanely great" doodads.

    Many on Slashdot give him a pass, because you like the causes he supports. At the same time, you bemoan the fact that the new iMac mini was actually worse than the old one, computers are not updated nearly enough, computers are not powerful enough for Oculus Rift, or even many games, features such as ram expansion have been downgraded, the new GUI is a backwards step, programs like pages and iMovie are stagnant, programs like Aperture have been cancelled, the iwatch was just plain silly, and the iPhone changes are just plain underwhelming. All this can be now said about a company that a decade ago, saw a world filled with CD players, and figured out how to bring your entire music collection with you at once....all with a slick interface.

    Apple used to be about being transformative. Now it is just about being transgendered. I miss insanely great.
    • Just look at the Mac compare page, it's like John Sculley in the early 90s. What market segment does the Air serve awkwardly between the plain and Pro models?

      Not to mention the iPad Pro has, arguably, a 'better' screen than any Macbook, for those who prefer vertical pixels.

      • Just look at the Mac compare page, it's like John Sculley in the early 90s.

        Errm - Nope [morrick.me]. Not even by a long shot.

        And if you want to complain that comparison doesn't include iPhones and iPads of today - neither does it include various Newton products, the QuickTake camera, the long line of printers etc. Apple sold back then.

    • I hate to always be that guy, but Apple did not figure out how to let you take your whole music collection with you, they simply made the best version of an existing product and shackled it to their DRM laden music store.
      • The DRM was asked by the music industry at the very beginning. It was a condition so that Apple could sell music files. But soon after, Steve Jobs fought against the DRM [wikipedia.org] and this is why the music is now in unprotected 256kbps AAC instead of DRM'ed 128kbps AAC.

        When you buy music on the iTunes store today, there's no DRM. Take the file and copy it to another device capable of playing AAC, it will work without any problem.

    • Apple used to be about being transformative. Now it is just about being transgendered. I miss insanely great.

      What do people mean in concrete specific terms when they say Apple is (insanely) great? Having never purchased an Apple anything what specific insane greatness have I missed out on?

      As for CD players and figuring shit out... We were already ripping our CD collections and downloading from Napster before ipod. We already had PDAs that could play MP3's and several portable mp3 players were already on the market like Rio before there was ever an ipod.

      • by bkr1_2k ( 237627 )

        And where are Rio and Napster now? What made people say Apple is "insanely great" is they gave users (at one time) features they wanted in an easy to use platform. Sadly, those days are slipping farther and farther away from reach as Apple continues to bloat their software while removing features. Some people believe they are doing the same with their hardware.

    • All this can be now said about a company that a decade ago, saw a world filled with CD players, and figured out how to bring your entire music collection with you at once....all with a slick interface.

      I had an MP3 player before the iPod came out. They didn't invent it, or even make it good. All they did was make one with a hard drive and a slick marketing campaign that made people willing to pay the extremely high price.

      • All this can be now said about a company that a decade ago, saw a world filled with CD players, and figured out how to bring your entire music collection with you at once....all with a slick interface.

        I had an MP3 player before the iPod came out. They didn't invent it, or even make it good. All they did was make one with a hard drive and a slick marketing campaign that made people willing to pay the extremely high price.

        So why weren't the makers of those much better and earlier and cheaper and whatever MP3 players willing to advertise their products outside the back pages of Computer Shopper?

  • It's rather convenient they were in a controversy over phone security this year wasn't it? It certainly gives them a new selling point for declining sales. Be ready for obnoxious ads in September about how the new iPhone 7 is unbreakable (which it won't be). As soon as I read the actual court order involved in that San Bernandino case, juxtaposed with the hyperbole in the media, I knew this was just another marketing campaign from a company that knows no shame. Now we have the confirmed motive.
    • It's rather convenient they were in a controversy over phone security this year wasn't it? It certainly gives them a new selling point for declining sales. Be ready for obnoxious ads in September about how the new iPhone 7 is unbreakable (which it won't be). As soon as I read the actual court order involved in that San Bernandino case, juxtaposed with the hyperbole in the media, I knew this was just another marketing campaign from a company that knows no shame. Now we have the confirmed motive.

      Nice conspiracy theory. Which raises the question: why don't people give a shit about the severely lacking security on Android phones?

  • by spoot ( 104183 ) on Tuesday April 26, 2016 @07:33PM (#51992781) Homepage

    Can we start saying "Beleaguered Apple" again, like back in the '90s? That was so much fun!

  • we've hit "peak smartphone".

    The people who want one, have one. The only thing that is going to drive smart phone sales now is occasional replacement and hardware upgrades.

    Apple's profits will drop a bit and then level off at a sustainable level. Expecting to maintain continual growth in a finite market is just not possible.

    • Apple's entire selling point is that it's fashionable. Poor people can't afford them, and there's a vestigial status attached to them once appropriately awarded for being a better device. The problem is, the iPhone is neither better, nor cool anymore. They did extraordinarily well being "the" phone for almost a decade. Nightclubs are lucky to get 5 years. They even recycled old Samsung ideas like the large screen, much to the desperately-ignored hypocrisy of their rabid fans that spent years decrying "I don
      • They even recycled old Samsung ideas like the large screen, much to the desperately-ignored hypocrisy of their rabid fans that spent years decrying "I don't need a big phone, I can use mine with one hand!".

        Some people do seem to prefer larger phones, but those "rabid fans" are probably the reason why Apple was basically forced to make the 4" iPhone SE. [apple.com]

  • by seoras ( 147590 ) on Tuesday April 26, 2016 @11:57PM (#51993855)

    Apple's earnings came with the line: " The company currently holds $233 billion in cash and marketable securities ".
    Holy hell, that's a stupid amount of cash in hand to have at your disposal.

    What's Tesla worth right now?
    I'd love to see Musk team up with Cook as he's the closest living thing to Jobs.

    Sure there's a lot of Tesla lovers who hate Apple but I'll bet there's a shit load more Apple fans who'd buy a Tesla if it had an Apple on it's ass.
    It's not just the cars, I love Tesla's entry into the home power market with their wall mounted batteries.
    If you want disruption you need to get into some new markets. 10 years ago Apple didn't sell phones.
    Computing devices have almost reached commodity stagnation. The App market has been and gone.

    There's so much going on in power, renewables and the changing global weather patterns.
    Believe in global warming or not this area provides a huge marketing opportunity.

    • Apple definitely has enough cash to buy Tesla. It has enough cash to buy GM, Ford, and the rest of the American auto industry. Combined.
  • by walterbyrd ( 182728 ) on Wednesday April 27, 2016 @12:42PM (#51997965)

    What if Android is overtaking iOS in phones, in the same way that Windows overtook MacOS in PCs? For those who don't remember: Apple nearly went bankrupt in the 1990s.

    Apple had the same philosophy with PCs in the 1990s that Apple has now with smart phones: super high margins, everything proprietary. Apple expects to be worshiped to the point that Apple does not need to have a better value.

    From what I have been reading, the Samsung Galaxy S7 Edge beats the iPhone in several respects.

    It is my understand that Samsung beat Apple to the punch in the following:

    higher resolution camera
    heart rate monitor
    big display
    amoled display
    water resistant
    wireless charging
    1080p display
    answer by waving
    wirelessly sharing photos
    controlling a TV

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