Apple Says Profits Were Flat, Citing Slump In China (nytimes.com) 80
Due to an economic slowdown in China and diminishing demand for new iPhones, Apple's profits in its most recent quarter were flat compared with a year earlier. "The disappointing financial performance had been expected since Jan. 2, when Apple, for the first time in 16 years, revised its forecast for the quarter," reports The New York Times. "But the announcement on Tuesday indicates a difficult road head for Apple, which just five months ago became the first company to be worth more than $1 trillion. The company said it expected between $55 billion and $59 billion in revenue in the current quarter, just below analysts' expectations for $59 billion. Apple's earnings per share were $4.18, beating analysts' expectations by a penny."
In addition to the quarterly earnings, Apple reported revenue of $84.3 billion, a decline of 5 percent from one year ago. "Revenue from iPhone declined 15 percent from the prior year, while total revenue from all other products and services grew 19 percent," Apple said in a press release. Analysts had estimated revenue of $83.97 billion and earnings of $4.17 per share. "While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," said Tim Cook. Apple's active install base of 1.4 billion is "a great testament to the satisfaction and loyalty of our customers, and it's driving our services business to new records thanks to our large and fast-growing ecosystem," Cook said. The Verge adds: "iPhones account for 900 million of those devices. iPad revenues were up 17 percent against the year-ago quarter; Mac was up 9 percent; and Wearables/Home/Accessories were up by 33 percent."
In addition to the quarterly earnings, Apple reported revenue of $84.3 billion, a decline of 5 percent from one year ago. "Revenue from iPhone declined 15 percent from the prior year, while total revenue from all other products and services grew 19 percent," Apple said in a press release. Analysts had estimated revenue of $83.97 billion and earnings of $4.17 per share. "While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," said Tim Cook. Apple's active install base of 1.4 billion is "a great testament to the satisfaction and loyalty of our customers, and it's driving our services business to new records thanks to our large and fast-growing ecosystem," Cook said. The Verge adds: "iPhones account for 900 million of those devices. iPad revenues were up 17 percent against the year-ago quarter; Mac was up 9 percent; and Wearables/Home/Accessories were up by 33 percent."
Doomed (Score:5, Insightful)
Only 80 billion dollars in the months?
It's over.
Re:Doomed (Score:5, Funny)
And their cash horde is only $245 billion now.
It was $237 billion last quarter, and the only managed to add a measly $7 billion to it during this latest quarter.
Apple is obviously doomed, they are a failing company.
Yup, pack it all in (Score:3, Funny)
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You can get a lot of Mongol warriors for that!
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Well they were, it seems they have pulled their thumb out and are developing new products and properly evaluating existing ones and obviously looking to expand muchly in the OS space as in iOS vs M$ vs Android.
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Dont forget their growing debt. I realise with all those shaking pompoms you might forget that.
Their debt is shrinking (Score:1)
They only issued debt as a way to leverage that overseas cash for buybacks and dividends. With the tax law change that's no longer necessary, so they are no longer issuing new debt and it will shrink as the bonds mature.
But don't let facts interfere with your Apple hatred.
Re:Doomed (Score:5, Insightful)
Yeah, it's their second most profitable quarter ever, second only to their year-ago quarter, which was the most profitable quarter in history, not just for Apple, but for any company ever.
Doomed!
If only we could all be doomed so successfully...
Sarcasm aside, they actually are doomed in the grand scheme of things, the same as Sears was doomed 50 years ago. This may be what we look back on in 10 or 20 years and say was "peak Apple", but it's hard to say anything with certainty now.
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It seems like they have reached peak iPhone maybe. Question is where do they go next. They are still updating their laptops, but workstations have been mostly abandoned. The tablet market is saturated, some recent filings seem to show they are looking to do low cost iPads for some markets. Their automotive project seems to have been wound down.
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Eh, shuffling 200 people (reports said “laid off” in the headlines, but then said they would be moved within the company, which isn’t what a layoff is) off a multi-thousand person project isn’t exactly winding down to me, especially considering they just promoted a new guy to be over it. Sounds more like a restructuring to better fit the new guy’s preferred approach.
But yeah, their current markets are basically saturated. It’s a question now of whether or not they can fig
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Yeah, it's their second most profitable quarter ever, second only to their year-ago quarter, which was the most profitable quarter in history, not just for Apple, but for any company ever.
Doomed!
If only we could all be doomed so successfully...
Sarcasm aside, they actually are doomed in the grand scheme of things, the same as Sears was doomed 50 years ago. This may be what we look back on in 10 or 20 years and say was "peak Apple", but it's hard to say anything with certainty now.
And I predicted this years ago.
Apple's growth was entirely due to the fact there were markets they hadn't entered yet like China. Smartphones matured years ago, there aren't any more big leaps to make, no revolutions to be had even though Apple are still playing catchup to Android. Because phones are mature people are replacing them less frequently. Most of the people I know with Iphones are still using old ones, 4's 5's and 6's. They'll keep them until they die because they are good enough and none of t
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Predicting that a market would become saturated isn't remarkable in the least. It's been a foregone conclusion ever since it became clear that smartphones were replacing dumb phones. Predicting when, however? Kudos to you if you were accurately predicting this timing as far back as the iPhone 4. That said, I think you may be a bit off when it comes to your notion that consumers see no difference between iOS and Android, and that's true regardless of which platform you favor.
Both iOS and Android have retenti
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Despite being only able to build laptops that break when the lid is opened, keyboards that stop working when encountering a crumb and computers that can't compute without overheating, not to mention allowing bugs to slip through that allow root login with blank passwords or anyone to activate your phone's camera and microphone, in spite of all this, people keep buying Apple products.
I think that it is humanity that is doomed.
Re:Doomed (Score:4, Interesting)
Not humanity, just the rest of the tech sector.
You can not name another tech product with similar success that has fared better security-wise than Apple has. Windows security is a joke, barely held together by daily updates that fix what the previous update broke. Android is a walking advertiser's dream. Linux has yet to become meaningful on the desktop.
Apple at least are still updating to current code-base phones from 5 years ago. Are there bugs? Yes. Do they fix them? Yes. At least you aren't abandoned by the carrier, the manufacturer, and google all deciding it's time for you to get an update.
Chromebooks maybe?
Time to sell User Data (Score:1)
Apple needs to get off its ass and monetize all the user data they have. Google and facebook have been pretty successfull at it. Tim your responsibility is to your shareholders not your users.
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Definitely not. By focussing on privacy they are differentiating themselves from Google, Facebook, and all of the others.
What they need to do is stop the strong focus on the iPhone. They had a huge lead in certain markets such as graphics design with their computers but they've completely lost it by not updating their Mac Pro line in years. Apple needs to really focus on their computer lines again, especially the Pro desktop. It would be great if they did something unique such as using their own CPUs in a d
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What you are suggesting would have developers scrambling twice a year - once for the hardware update and once for the OS update. The way its done now is better. Actually most people are keeping phones for 2 years so maybe they can move to releasing a flagship model every 2 years along with a well tested OS. the intervening year can be used to release cut price models with crippled functionality.
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The stock market won't let them release a high-end model every two years. If you read carefully what I suggested there wouldn't be a huge rush for the iOS feature update because I said that they would release it when it was ready. They could announce it for release in a particular quarter when they were getting nearly done and then as they were completing items start narrowing down the release date always with the provision that if testing found something it could lead to delays. Apple could still announce
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No. Keeping user-data private is probably wining more hardware sales for them than the revenue garnered by user-data. Anyone who values their privacy at all goes Apple. It's not even up for debate with them. Tim does a great job there. Apple is not in the business of selling user data or access to anything by anyone not the user. Their balance sheet reflects that.
Not here yet (Score:2)
You say peak smartphone is here, but what makes you think that? I don't see any sign that demand for smartphones is in any way lacking or declining. It only increases...
So he asks me things like "well, should I move into the browser coding area next?" &/or other areas of interest he has there to help PRESERVE his career
Learning Swift is still a career forward move and builds on the strong base he already has, even more-so is learning Python and Tensorflow. Even if it just wanted to stay at Apple that
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I don't see any sign that demand for smartphones is in any way lacking or declining.
Then you aren't paying attention. We hit peak smartphone [economist.com] in 2017. Unit sales in 2018 were slightly lower.
There are 5.5B adults on the planet, and 4B of them already have smartphones. Nearly all sales are replacements and upgrades, not new users. Most phones are in service for 3 years or more, and that is increasing.
Don't blame china (Score:2, Funny)
Blame way overpriced flagshit devices. That was a typo but I think it plays. Does it play?
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Blame way overpriced flagshit devices. That was a typo but I think it plays. Does it play?
You don't know how this works.
Never, ever, associate any negative event with anything plausibly under your control. What PR people say has nothing to do with truth.
Never, ever, go back on a decision if you can blame anything external. You are management. Everyone knows management is always right. The day people stop believing that is the day you pull that silken ripcord on your golden parachute.
Couldn't have anything to do with price increases (Score:1)
Sure, they increased the price of every single new iPhone, but I'm sure it was exclusively China and the Trade War that imposed zero tariffs on Apple products that is to blame (in fairness, China is very anti-US, and specifically pro-Chinese, especially when the US is actively anti-China).
It cannot have anything to do with the iPhone XR starting at $699 USD, iPhone XS starting at $999 USD, or the iPhone XS Max starting at $1099 USD. Given that the iPhone 8 -- the same tier as the iPhone XR -- was itself rai
How to fix a company when products sales slow (Score:1)
People buying $500 to $1000 South Korean products and from brands in China?
Who in the free West would have expected Communist enforced patriotism to be so strong?
That China could alter the social credit score on what smart phone brand a person was reported as using?
Who wants to risk their social credit on the wrong smart phone brand?
That people have the freedom to select an amazing South Korean smart phone with more
More like jacked up prices alter supply/demand (Score:4, Insightful)
Look, you set the price too high. Just shift the price lower on the curve, and you can maximize your profit.
In a time when you're flooding the market with $1000 phones, reconsider your original $500 price point. You'll see that unit sales of the $800 version are ok, and the $500 model is doing very well, so you know you need to fire your marketing and sales teams who skipped out on basic accounting and economics classes.
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So, people wanting to get an iPhone at a lesser price point still can. It's not called the XS or XR, but you can get a perfectly serviceable iPhone 7 with 128 Gb storage for half of proverbial $1000 ($549) and $50 bucks more gets you an iPhone 8 with 64 Gb storage which is enough for most tasks.
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The iPhone is an aspirational product. It has to be expensive or it wouldn't be so desirable.
That's the problem they have in China. Too many refurb and hand-me-down iPhones flooding the market, industrial scale recycling going on. The iPhone has gone from expensive status symbol to poor person's phone, or the default choice of the technologically clueless elders. All the cool kids moved on to Xaomi and other domestic brands.
They keep the latest models expensive, but they look too similar to the old ones and
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The iPhone is an aspirational product. It has to be expensive or it wouldn't be so desirable.
Nearly a billion people have iPhones, if you think it's an aspirational product then you're just not paying attention.
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The iPhone is an aspirational product. It has to be expensive or it wouldn't be so desirable.
Nearly a billion people have iPhones, if you think it's an aspirational product then you're just not paying attention.
How long do you think it will take before what s/he wrote sinks in...
I'll help... Why do you think nearly a billion people have iPhones?
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So here's something to consider about Apple's phones: while the prices have recently increased, their gross margins are exactly the same, around 38%. You can argue that that's an unreasonably high margin, certainly, but the amount of money they're trying to get back for the amount of money they're putting in hasn't changed very much over the years.
Of course, it's impossible to ignore that Apple is a Veblen good. The high price implies quality, regardless of whether or not that's true. People that are afflue
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The market doesn't owe them a premium. Markets don't care about what you "expect". They just are.
Personal computers, like my original Apple II+, used to cost $4000. Nowadays you can get a high powered laptop for around $150.
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You're right, the market owes them nothing. But the market continues to give them profits. Despite all the hue and cry over Apple's guidance correction, this was their second best quarter ever, which means it was also the second best quarter for any company, of all time, ever.
Basically, I don't think things are so simple as just 'lower the price'. It might undermine the perception of them as a luxury brand, and then we might REALLY see a downward spiral. Or maybe it would work, who knows? I don't think the
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Quarterly results are frequently fudged, using invalid booking dates on inventory, counting units sold when they were only received at a retail store and not booking returns until the next quarter. Most people realize this can be true, and tend to use year over year metrics instead.
Markets react to information, but perception can be slightly altered through such tricks. Eventually the market participants catch on and adjust, of course.
One quarter is not a trend. Three quarters might be a trend.
India shows that Apple made a big mistake (Score:1)
The problem with his comments is that they don't make sense when you look at how Apple got it's butt kicked in India. India is an untapped market; 2018 had 150M phones sold and over 1B people live there. But the market is not made for US$1,000 phones; it needs a product that fits India appropriately. Xiaomi launched a budget phone and a premium phone that cost in US$420 and they owned the market there.
Apple needs to get out of the Western world way of thinking and Western world prices. THe growth market
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Most of the people in India (like China) are poor. The median annual income in India is $616 USD. The majority of the population lives on less than $4 a day. The phones that do well are feature phones, which Apple doesn't make. To put the poverty in perspective, most of the people that have a feature phone don't have access to a toilet at home.
Apple focuses on selling to the middle class in India, which is about 30 million people or 2% of the population. That said, they cannot compete with Chinese brands th
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Advance 54 metres ... turn right ... after 20 metres, you may shit.
Imagine the market for an app that did that!
Re: India shows that Apple made a big mistake (Score:2)
Would you rather profit $1 each off a million people and have to deal with all their petty support issues?
Or profit $100 off 10,000?
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Would you rather profit $1 each off a million people and have to deal with all their petty support issues?
Or profit $100 off 10,000?
That's fine, until you consider that a portion of those 990,000 possible customers you decided not to pursue would also have bought apps, subscriptions and services. Of course your reasoning still makes sense, but the walled-garden-model, with its hefty fees for any sale, tends to move the break-even point around.
Features (Score:1)
I guess Apple prefer to externalize, and that's unfortunate.
If Apple were to internalize, they might realize that, for the past few years, they have been adding new features to the iPhone that people aren't really all that interested in. For example, a screen that covers the whole face of the phone, OLED screen that you have to run dark-mode on so you don't rip through your battery, animojie, AR/VR, and an inferior Intel radio.
At the same time, they have been removing features that people liked. For example
Trump is killing your economy (Score:2)