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iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
- jsz0 10y agoThe concerning part of this is how little Apple did to get ahead of the market saturation problem before it started impacting sales. They had plenty of warning. Analysts have been predicting this for years. They waited way too long to release iPhones with larger displays. Then it takes more than a year to update the 4" model and when they do it gets released with a nearly identical enclosure to a 3 year old phone. Current rumors suggest the iPhone 7 may share a very similar design to the iPhone 6/S which is just baffling to me if true. When market saturation is a problem it seems like the absolute worst thing you could do is keep recycling 2-3 year old designs.
- yoda_sl 10y agoThe key numbers from the Press Release: The Company posted quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion, or $1.90 per diluted share. These results compare to revenue of $58 billion and net income of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter. Gross margin was 39.4 percent compared to 40.8 percent in the year-ago quarter. International sales accounted for 67 percent of the quarter’s revenue. So not really a surprise from what they announced at previous quarter.
- JamilD 10y agoThe expectation was $2.00 EPS, Apple reported $1.90. AAPL is down in after-hours trading right now, at 95.91 from 104.35 at market close (as of 5:20 PM). This is a significant earnings report as it's the first to break 13 years of continuous growth. Revenue was down 13%. • Q2 EPS: $1.90, down 22% YoY, versus expectations of $1.99 • Q2 revenue: $50.6 billion, down 13% YoY, versus expectations of $52 billion • Gross margin: 39.4% versus 40.8% last year and expectations of 39.47% • iPhone unit sales: 51.2 million, down 17% YoY, versus expectations of 50.7 million • iPhone ASP: $644.25, down 2% YoY, versus $651 expected • iPad unit sales: 10.2 million, down 19% YoY, versus expectations of 9.4 million • Mac unit sales: 4.03 million, down 11% YoY, versus expectations of 4.6 million • Q3 revenue guidance: $41 billion and $43 billion, versus expectations of $47.35 billion
- ericabiz 10y agoI run a repair shop. We've repaired over 3,000 Apple devices for customers. We are always chatting with our customers, so we get a ton of feedback from them about what they're doing with their phones. We hear a few things consistently: 1) Providers have switched from "free upgrades every 2 years" to a plan cost and a monthly phone cost, so people now really know how much their phone costs--and many would rather save the $30 a month than upgrade their phone. This started with T-Mobile a few years ago and now is how most phone plans work. This is having a huge impact on people's desire to buy new phones. 2) iPhone 5/5C/5S users have no desire to upgrade to a larger phone. The SE is going to solve some of this, but it'll more likely be a scenario of "I dropped my 5S in the toilet and it's completely dead, so I'll upgrade to a SE instead of dealing with the hassle of finding a legit used 5S." I don't expect to see a huge push toward the SE from current iPhone 5 users. 3) Repairs are so cheap, so easy and so effective. It's $79 for us to fix an iPhone 5/5C/5S screen right now, and we can fix it in less than 30 minutes typically. No reason to upgrade when your old one works just fine and you can get it fixed cheaply. Interestingly, the SE screen is 1:1 compatible with the 5S screen, so the SE is coming out of the gate being cheap and easy to repair as well. I'm typically recommending the SE if people really want a new phone. We also ask customers about 3D Touch (the new feature on the 6S/6S+) and if they're using it if they have a 6S. 99% of people have no idea what it is or how to use it. They bought a 6S/6S+ because it was pink. Yep, most of the 6S phones we see are rose gold, and that seems to be the #1 factor driving sales of that line. If they don't care about the pink and ask me what phone I recommend, I recommend buying a refurbished 6 over any of the 6S line. (We don't sell phones, so I have no horse in that race at all.)
- johansch 10y ago(Lots of interesting data; upvoted.) > It's $79 for us to fix an iPhone 5/5C/5S screen right now Interesting, since I have a 5s with a broken screen glass that I haven't bothered getting fixed yet. :) It used to be quite a bit more, I think? Have you figured out how to separate the glass (etc) from the actual display, or have replacement display+glass packages just gotten cheaper? (If you are replacing the display - is there any significant performance difference between the stock display and the replacement display?)
- revelation 10y agoAre we past peak-smartphone or is this just noise from model release schedules? It took PCs 20+ years to get good enough, smartphones managed the same in much less than 10 it seems.
- Shivetya 10y agoyet for the most part PCs dropped significantly in price but smartphones seem to be holding the 400+ range which is still woefully overpriced for most of the phone buying populace because not only are you putting out 400 bucks but usually under obligation to send forty to eighty more a month. That is a good chunk of the the lower and middle classes.
- rco8786 10y agoI think you're forgetting to include Androids when you address "smartphones" as a whole...
- venomsnake 10y agoThe PC have not dropped significantly in price. High end gaming PC (that you build yourself) always costed about 1500-2000$. It is just that the majority of tasks could be done in lower and lower segments of the market.
- ct520 10y agoI guess your opinion and mine greatly differ on the history of high end gaming pcs.. (building highend pc's since riva tnt and diamond monster 3d days..) One of many high end buyer guides one could reference. http://www.anandtech.com/show/538/17 http://www.anandtech.com/show/538/17
- dragontamer 10y agohttp://i.imgur.com/Lng3MQB.jpg http://i.imgur.com/Lng3MQB.jpg I'd say that computers have come down in price.
- 10y ago
- venomsnake 10y agoFor any exponential function comes time when its growth cannot be sustained. Smartphones are boring and mature, we haven't had killer app in ages - welcome to the PC market of 2007.
- marblar 10y agoThat’s a logistic function, not an exponential.
- venomsnake 10y agoExpecting x% growth year over year is exponential, I think
- api 10y agoI've been a "mobile is the future of everything" skeptic since the iPhone first came out. Lately I'm feeling slightly vindicated. These things are awesome for navigation and rapid interactions with services and of course chatting. But the totally jailed OS and tiny screen and the rest limits mobile to those kinds of interactions.
- FreedomToCreate 10y agoSo anyone thinking planned obsolesce might move itself up the Apple priority list? Their per quarter revenue is still massive, but Wall Street always expects more. At its current rate of stock buy back, Apple could buy back all of its stocks and go private in a few years. They could rid themselves of market fluctuations in regard to stock and pump out products while continuing making the ridiculous amounts or revenue and overcome the need to take shortcuts for the sake of Wall Streets obsession with non-stop growth.
- TheOtherHobbes 10y agoThey could, and that may be the plan. But ultimately it's about impressing customers, not Wall St. And Apple has been getting less and less good at creating products that do that.
- adrenalinelol 10y agoThis was inevitable for Apple; their stratospheric valuation has expected growth priced in. Given the company's inability to foster the same ambition Steve Jobs instilled in it, they can only ride on their existing product line for so long. I do find their lack of acquisitions strange given how much capital they are sitting on. There are a lot of markets w/high barriers to entry they'd have no trouble getting their foot in the door(Gaming, On Demand Streaming, etc...).
- criley2 10y ago>"I do find their lack of acquisitions strange given how much capital they are sitting on." A) They average like 5-8 per year which is pretty standard among their peers: https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio... B) I said to Steve, “What should he do?” and Steve said to me, “He should focus on his knitting. Not try to do everything. Do one thing well.”
- frankchn 10y agoI am not sure about the valuation having a lot of growth priced in, given that Apple's current P/E ratio is 11. In comparison, Google's is 30, Facebook's 84. Even Berkshire Hathaway's is 15.
- rrggrr 10y ago50.6b net income on 39.4% gross margins. A bit early to be writing Apple's obituary or anything even close. Retail is suffering nationwide and I suspect Apple is caught up in this decline.
- Analemma_ 10y agoYeah, but "50.6b net income on 39.4% gross margins" doesn't get those juicy clicks like "Apple is DOOOOMED!!1!" does. These journalists gotta put food on the table somehow.
- nugget 10y agoMore likely mobile is headed quietly down the path of the PC - fewer generational improvements means people keep devices longer and there isn't as much of a reason to buy new hardware so sales flatline. Great business still but Wall Street hates that narrative. They want the next hot growth market -- VR perhaps when its killer app moment arrives.
- rrggrr 10y agoI'll say this: Amazon Echo cut Apple's growth balls right off. That's a $2b revenue business Siri can kiss goodbye.
- yourapostasy 10y agoApple has no one to blame but themselves (history may be rhyming here) if they lose that market. Apple had many, many quarters where they sat on Siri and did not open it up to developers via an API, and could have killed Echo in the cradle.
- r00fus 10y agoThey still can, and that's the truth - Echo may have momentum but Apple has a 1 billion device installed base. Any opening up of Siri via API would suck the air out of the market.
- tma-1 10y ago> The Company also announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March 2018. My god, that $50 billion expansion is 7% of the company at the current market cap.
- adventured 10y agoIt's actually an even more astounding 8.65% of the current market cap ($578 billion). I'm glad to see them returning capital to shareholders. However I worry about the debt they're taking on in order to do so, due to most of their cash being overseas. If things continue to slide for them, for whatever reason (iPhone loses favor, smartphone sales keep contracting globally, something replaces the smartphone, etc), it will pin them into a disastrous situation of extremely high debt and crashing sales (while having committed to very large payouts to shareholders).
- rtpg 10y agoWell, they can always bring their cash back right? (it will be taxed, but it's still a formidable warchest) Or somehow pay back debt through some overseas shenanigans.... Not a great situation to be in but I can't imagine it getting big enough to where Apple could no longer handle it. Maybe I'm underestimating interest rates
- lmm 10y agoIf they ever start losing money couldn't they just move the same amount in from overseas? It wouldn't be profit so it wouldn't be taxed, no?
- c-slice 10y agoI think we just reached peak smartphone. What's next?
- fla 10y agoGaming console ?
- piyush_soni 10y agoVR, Drones, self-driving cars, of course, everything controlled by smartphones.
- cududa 10y agoFunny enough, most VR projection models use gaming consoles as the low point of estimating units a few years from now. I want to bet on sunglass sized AR, but it seems like we'll need some material science revolutions to shrink down the requisite hardware to have the kind of useful experience is imagine
- CrackpotGonzo 10y agono phones
- forgetsusername 10y agoMore importantly in this context, will Apple be the company to bring it to us? Is it the watch? Interesting point for the company.
- grandalf 10y agoI love my iPhone 6+ but while overall the ecosystem is getting better, the device is more laggy and glitchy than previous models. Apple Pay always gets triggered by accident when I try to unlock using the fingerprint, and once in a while random apps seem to heat up the phone and drain the battery before I realize what is going on. I think small things like the minor points of perceived quality that I'm describing can have a big impact on sales. When a phone costs $800 people expect a very solid experience with no glitches.
- yourapostasy 10y agoAbsolutely on point. There are numerous points where the polish is missing. For smartphones at Apple's preferred high-end price point, if the user experience doesn't feel like the designers anticipated user needs, then an Android will look "good enough". The gap between "good enough" and "just works" is gigantic, and is only breached by psychotic amounts of attention to detail: 1. Create an appointment, set the geographic destination, start setting alarms and about half the time Calendar crashes. 2. No gesture to make a copy of an appointment in Calendar. 3. No API for Siri. 4. Dial into a conference call with a passcode. Start a second call, and try to dial into another phone number with a passcode from Contacts or Calendar. It dials the number but not the passcode (iOS ignores everything after the phone number for the second call). 5. Come back into cell range from a long absence and receive a barrage of voicemail notifications about voicemails you've previously been notified about. 6. Add a field in Contacts, and the cursor and focus stay in the "add field" area of the record, while the actual field is above that area. You have to scroll up, find the field as the keyboard appears, then key in the field. Older versions of iOS had the behavior correct: adding a field moves the focus to the field in the record. These and more warts arguably should not exist in a high-end, premium smartphone.
- bluedino 10y agoTrim a video, save as original, and then you "lose it" until you go back home and then back to photos
- jonknee 10y agotl;dr it's hard to find lots of new people every quarter who can afford $600 phones.
- Aelinsaar 10y agoIt's sort of astonishing that they kept it up this long.
- jonknee 10y agoIt really is. They were able to squeeze more out of China than any other foreign company has (or at least American company).
- mschuster91 10y agoHeh, I'm going to get myself the new CAT S60 phone (650€ at the moment, hope it goes down to 550-600 in two months). I already have an (aged) B15Q... but holy cow, a FLIR camera in a phone?! Only downsides: 1) no MediaTek CPU any more, only Qualcomm shit => no more easy rooting, firmware reflashing etc. 2) no dual-SIM :'(
- mongol 10y agoVery interested in this one as well.
- pjmlp 10y agoSpecially outside US and other first level countries.
- matwood 10y agoOr it's just gadget saturation in general. My MBP from a few years ago works great. Some of the older iPads I have at work are just fine. The iPhone 6/6+ also works just great. At some point, the marginal utility of a new device just isn't there. It is what happens as markets mature.
- 10y ago
- Aelinsaar 10y agoIs this something that Apple can address with more competitive pricing in China?
- HappyTypist 10y agoMore competitive pricing in any region would mean lower pricing everywhere in the world. Apples products are extremely fungible.
- scholia 10y agoMore competitive pricing would reduce margins. Apple has chosen to pursue high margins and high profits rather than market share. That's how it accumulated roughly $200 billion in cash.
- Aelinsaar 10y agoExactly. Does that leave them with the flexibility to fundamentally change their business model to narrower margins?
- scholia 10y agoIn theory, yes, but Apple sells premium products at premium prices and many people actually like paying more. There's inevitably a show-off element to it, but I think there's psychological research to show that people appreciate products more when they pay more for them. (But I can't find any evidence from a quick google....)
- mtw 10y agoChinese are known to travel and buy iPhones in packs (6, 8, 10 at a time). They will buy it from where it's cheapest
- bsirkia 10y agoIncredible that this is the first time in 13 years that Apple hasn't posted quarterly growth. I'm sure there will be lots of "Apple has lost its ability to innovate" articles based on this, but growing for the last ~52 straight quarters is insane. And I don't think one quarter without growth is enough evidence to conclude "Apple may be reaching the saturation point among potential customers in some countries" or "other smartphone makers using Google’s Android operating system continue to challenge the company with powerful, lower-price devices."
- Esau 10y agoPersonally, I wonder who though Apple's growth would never end. This happens to every company sooner or later.
- mturmon 10y agoI was at a NASA workshop in Mountain View. An informational placard outside had two plots of growth, one with an unchecked exponential curve, and one with a curve that comes up to a peak and goes down. It asked which made more sense as a growth curve. My idealized mathematical self thought, naturally, the exponential growth curve, because it expresses what happens when y-dot equals alpha y. But I asked a passing Caltech astrophysicist, who (not surprisingly) gave a better reply. The curve that flattens out and goes down, he said, because exponential growth is impossible to sustain. Physical limits on some aspect of the system must intervene and impose a new law.
- msellout 10y agoA chart of growth rate might have a peak, but a chart of the thing that is growing is more simply modeled as a sigmoid that has an initial exponential growth portion, then a logarithmic portion which ends in a plateau.
- neutronicus 10y agoThat depends. Time-delayed negative feedback produces a peak and a crash.
- toyg 10y agoApple is not doomed, but I think they've taken their eyes off the ball a bit. Watch and iPad Pro are me-too products, and the switch to flat interfaces cost them a lot of differentiation IMHO. They've cheapened their brand and they don't seem to know what market they should really disrupt.
- cowpewter 10y agoThe iPad Pro is actually really awesome for artists. Pro + Pencil is a better experience than a Wacom Cintiq display, and it's a whole tablet for about the same price point, not just a display.
- matwood 10y agoAnd this is why when they raised the price of the iPad Air 3, I mean iPad Pro 9", they should have included the pencil. I like Apple products and want to try out an IPP with the pencil, but it's not priced to try out at all.
- wslh 10y agoAny experience on the Microsoft Surface? It seems it works very well for artists also.
- allsystemsgo 10y agoApple Pencil is pretty incredibly and trumps the stylus offered by Microsoft IMHO.
- alphonsegaston 10y agoIt was alright to use when they were putting in the Wacom digitizers. The N-Trig ones just aren't up to snuff. All my artist friends now just want an iPad Pro that runs full-blown Photoshop.
- EugeneOZ 10y agoAnd for kids. My daughter loves it.
- blondie9x 10y agoThe era where cell phone companies offered phone subsidies as trade for a customer's long term commitment has ended. The impact this is having and will continue to have on smartphone sales is profound. It is much more likely that customers will upgrade their devices less frequently. We are already beginning to see the impact in Apple and Samsung earnings.
- eli 10y agoI don't really buy that. Can you point to any evidence people are updating devices less frequently? Apple sold more iPhones in Q1 of 2016 then they did in Q1 of 2015 so are you extrapolating from a single down quarter?
- Retric 10y agoI personally did not upgrade from the 4s because the subsidy ended. Relatively the iPhone 6 vs 5 was an unusually big jump for Apple which confuses the issue.
- r00fus 10y agoData >> anecdotes
- Retric 10y agoWoosh. Sure, and the laws of supply and demand change when your talking about a phone. Cost up, demand down. The point was in most peoples minds the iPhone 4 vs 5 jump was smaller than the 5 vs 6. And the 5 needed a new connector. So, we are stuck with an apples to apples to oranges comparison. Samsung sales also dropped that's significant and they lack a stark A vs B model year comparison due to massive numbers of phones being regularly released. http://www.gsmarena.com/samsung-phones-9.php http://www.gsmarena.com/samsung-phones-9.php
- rtpg 10y agoThis report[0] (from 2014, but the trends cited seem to have continued from other places) have cited the end of 2-year upgrade incentives (or rather, cheaper monthly fees after 2 years) as a primary reason for a drop in cellphone sales. In particular, in 2013 40% of respondants would upgrade phones after 2 years... in 2014 that number dropped to 15%. At the same time, the number of people who said they would upgrade at "obsolesence" went from 15% to 35%. There's a decent amount of evidence that 2-year contracts trigger a lot of phone upgrading. The end of that whole cycle is going to continue to cause pain to anyone selling cells. [0]:http://reconanalytics.com/2015/02/2014-us-mobile-phone-sales-fall-by-15-and-handset-replacement-cycle-lengthens-to-historic-high/ http://reconanalytics.com/2015/02/2014-us-mobile-phone-sales...
- matt_wulfeck 10y agoI'm curious what other people think about the ecosystem as a catalyst, in particular Apple Pay. It seems to be that squeezing between iPhone owners and everyday purchases would be very lucrative.
- mmanfrin 10y agoIt seems to be that squeezing between iPhone owners and everyday purchases would be very lucrative And something that Banks will very strongly oppose. How many places can you use Apple Pay right now? I love Android Pay, but the only store I can use it at is Walgreens -- no where else I go takes it. Banks still hold a huge amount of power at the point-of-sale market, and they will not give up their margins to Apple.
- seanmcdirmid 10y agoWePay is taken just about everywhere now, even at mom and pop drink stands. It isn't as impossible as one thinks it is, but maybe not in the states.
- mongol 10y agoCan Apple become a bank?
- qaq 10y agoThey can buy any +/- any bank
- kpil 10y agoI think it's more cost effective to start a new bank. But why would they. It's a lot of trouble, and being a bank gives you the right to lend in money from the public. It's still possible to provide payment services without being a bank. I think they could more or less buy VISA and pay in cash, and that makes more sense if you want to make money on retail payments.
- hellameta 10y agoNo surprise. I mean... at the end of the day these are flat touch screens... it couldn't last forever. This is great - onto the next!
- smitherfield 10y ago>Apple said it would raise its quarterly dividend 10 percent to 57 cents a share and increase the amount of stock it buys back to $175 billion. Surely that's the NYT's typo and they mean million with an M, right? EDIT: Not a typo, see mbrubeck's reply below.
- mbrubeck 10y agoNo typo. A year ago they had authorized $140 billion, and had already repurchased more than $80 billion. https://www.apple.com/pr/library/2015/04/27Apple-Expands-Capital-Return-Program-to-200-Billion.html https://www.apple.com/pr/library/2015/04/27Apple-Expands-Cap... ($175 million would be less than three hundredths of one percent of Apple's market cap.)
- smitherfield 10y agoAh, thanks. Kind of a hard to parse sentence; I read it as buying back $175bn this quarter. Which would be 30% of their market cap and represent all their cash on hand.
- beezle 10y agoThey do not have that much cash on hand. Apple already has over $100B in common and exotic debt that has been used to pay for both dividends and this buy back program. So that pile of cash sitting overseas? On its way to being mostly spent. And if the Congress critters start pressing companies to repatriate, a big tax bill looms too.
- noir-york 10y ago$175 billion in buy backs?! Wow, its expensive propping up the share price to keep Wall Street happy... There is only so much hardware innovation, there are only so many people on the planet with $600 to spend on a mobile phone. Apple should really move whole heartedly into services (as evidenced by revenue up 20%); build a gmail / dropbox competitor - stop thinking of itself as a consumer hardware maker, that era is over.
- allisthemoist 10y agoWhy do you think the era is over? Are people buying less cellphones and laptops?
- noir-york 10y agoThe stone age didn't end because we ran out of stones. Isn't google still not a search company, but its moved past its 'search' era and now its focus on other things. Apple will always sell hardware, but it needs to orient to its next phase of growth, and that ain't hardware.
- rocky1138 10y agoIt may be hardware, but might not be computers, phones, and tablets.
- noir-york 10y agoApple is amazing when it puts its mind to hardware for which there is an "ideal" Form; the macbook is the "perfect" form for a laptop, the iPhone is the "perfect" form for a smartphone. Take watches however, there is no one perfect form - different needs demand different forms. Or cars, or fridges or planes. So yes it may not be computers, phones or tablets, but the number of multi-billion dollar aspirational hardware products that Apple will be good at is not by any means a large number.
- 10y ago
- intrasight 10y agoI think that Apple would be wise to invest a few billion in solving the fundamental problem of batter life. That is the key missing ingredient for everything else we want in the future for mobile tech.
- nfbush 10y agoPerhaps in small part due to recent FBI case?
- __abc 10y agoThat seems unlikely to have had such a big impact in such a short period of time.
- adventurer 10y agoTim Cook has stated there is huge room for growth in China. I believe their inflated currency and recent market issues/corruption plays a big role on why the guidance isn't stronger. The emergence of cheap Xiaomi dominance doesn't help, either.
- skywhopper 10y agoIt probably doesn't help that the subsidy model has completely changed. But personally, I think iPhone performance has hit a point where one doesn't really feel the need to upgrade right away. I was so ready to upgrade when the contract on my 4 expired. It was really a pain to use after a couple of years. But my 5S has now lasted me two and a half years and other than wishing I had more storage capacity, there's really nothing compelling in the new models for me to want to upgrade. The build quality and battery are so good that I don't feel like it's even getting worn out. The better cameras would be nice, but otherwise? I just can't justify the cost, much as I'd like to, so long as my 5S keeps performing. I do think Apple needs to focus their money and efforts on improving their services and software integration. There's a lot to like in Apple services, but there's a lot of rough edges and weird gaps, and too often I feel like apps get written and then abandoned. If you bundle an app, it should have a dedicated team that keeps making it better, faster, easier to use all the time. I also feel like Apple has a real chance to make a mark on the home automation market if they chose to do so. The best stuff out there is still pretty bad, and pretty much all of it spies on you. Based on how they've been adding context-aware features to iPhone in a very privacy-conscious way, Apple is the one company I would still trust to actually try to do home automation in a way that respects my privacy. And they have the money to invest in making it happen. But while I'm sure their hardware would be well-made, can they raise their software polish to the same level?
- balls187 10y agoThe quality of the camera keeps me upgrading every chance I can. Also the touch-id capabilities are significantly improved.
- simonh 10y agoThe only iDevice that's not still in use in my family is my first, an iPhone 3G. My youngest has my 3GS. The 4 is with my father in law, etc. My first iPad, a v2, is with my sister in law in China, she uses it to Skype to us. These things just keep on going.
- wvenable 10y agoI have an iPhone 5 (not S) and the performance is starting to get on the frustrating side. But it's only now getting to the point where that is an issue.
- cthulhujr 10y ago>Its newest smartphone, the four-inch iPhone SE, went on sale in late March, too late to affect the most recent quarterly results, but analysts hope to get more insight into how it is selling. Went to the Apple Store in my large metro and they were out of almost every model. The associate searched other stores and there wasn't much within 1500 miles. Anecdotal, but it looks like the demand is outpacing the supply of the iPhone SE. It'll be interesting to see the sales numbers.
- mikestew 10y agoTwo to three weeks from the Apple Store when I checked this morning. I don't know if it's heavier-than-expected demand, or if they just don't keep that many in the pipeline (which I guess amounts to the same thing). My wife just broke hers (yes, again), so the plan is to at some point give her my 6S and I get a new 5SE, because I want my smaller screen back. It would seem that perhaps I'm not the only one.
- MaysonL 10y agoOn the conference call, Cook mentioned that they are still supply constrained on the SE - they are still selling all they can build as fast as they build them.
- _nullandnull_ 10y agoI'm not surprised. I think Apple underestimated the demand for the iphone SE 64 GB. Its been out of stock in most stores since it was released. Apple's shareholders should be asking why can't anyone buy it in a store? Also many people don't want wait two weeks to receive their phone when they buy it online.
- stouset 10y agoPeople can't buy it in a store, because like pretty much every model that came before it, they're massively supply constrained. They've gotten better about it, but there's only so much you can do when you're producing a high-tech item being purchased tens of millions of times per week globally.
- _nullandnull_ 10y agoLooks like the SE didn't matter. Interesting note from Apple conference call. "2:11 pm iPhone SE not included in these results, as it launched after the end of the quarter, but demand has been very strong. Demand exceeds supply, but we're working hard to meet demand. iPhone SE puts us in strategic plan to attract new customers." Source - http://www.macrumors.com/2016/04/26/q2-2016-earnings/ http://www.macrumors.com/2016/04/26/q2-2016-earnings/
- glenndebacker 10y agoIf I have read it correctly on another newssite, these numbers doesn't include iPhone SE data.
- erydo 10y agoThis is a small anecdote, but: I'm happy with my current iPhone and the current models aren't additionally compelling enough to me to upgrade. I have an iPhone 5S and don't want a larger one. When the iPhone SE came out, I was excited until I found out it didn't have force touch, which was the main interesting feature to me about the new lineup. Other than Apple Pay it seems I have very little reason to upgrade until this one dies or breaks. I don't see being satisfied with their product as a black mark against them.
- dijit 10y agoI have a 6s and I'd really like to go back to my 5s, for me that was "peak phone", did everything I wanted, in a good form factor, great battery life, was the perfect size. I originally upgraded because I wanted NFC and "it was time", but nothing is using the NFC chip in my phone so why bother? I'm considering buying the SE but my girlfriend is hampering me, she says a 6s is a status symbol. I guess for a lot of people they'll just upgrade anyway.
- IkmoIkmo 10y agoWell, they had a good run. I wonder what's next. I don't think anyone was surprised though, around 2014 we saw the writing on the wall. I mean take the Nexus 5, I have plenty of friends who have one and it's basically like they bought a microwave. It just works, it's fine, and they're expressing 0, and I really mean 0 interest in upgrading their microwave. They'll keep it for as long as the battery lasts and they don't break it. And that's really a last-generation phenomenon, before two years ago I was looking forward to new mobile tech. Now the changes aren't meaningful anymore. And now people are openly expressing it, too. Like the CEO of sony, who spoke about the end of innovation in smartphones a few months ago. I mean take my dad, he just bought an LG G3 for $8 a month on a 2 year contract. Now this phone is 2 years old, not top of the line... but it's $8 a month and it comes with a nice screen that's almost double the PPI of the latest iphone, 3gb of ram, a nice snapdragon 801 chip, 3000 mAh battery, it just works fine and it's just really cheap. In two years, the latest G5 will be $200 too, and you'll buy G3 like phones for $100. What can we innovate in smartphones that's worth $700 to most people? That used to buy you a magical device that could do things nothing else could, in your pocket just a few years ago. Anyway, I wonder what's next for Apple. There's no rumours of anything happening except its car. Wearables will expand. But they're all late or super late to market in these product categories. That's not a bad thing, they'll obviously make money, but it's not comparable to creating a real smartphone industry.
- mattmanser 10y agoNexus 5 was phenomenally good though for the price point/no-crapware bundle. Coupled with Android finally being good enough to at least rival iOS, it was the start of a new era. Certainly in the UK, since buying my Nexus 5, android has gone from like 6% to 40% of mobiles hitting the websites I manage (the EU market has always been heavily iOS skewed compared to America). My battery crapped out rather quickly, but a replacement has extended its life.
- IkmoIkmo 10y ago> The EU market has always been heavily iOS skewed compared to America On the contrary! iOS relative to Android is more popular in the US than in the EU.
- jdlyga 10y agoThe 6S and 6S plus didn't offer a ton of new features really besides being faster. The 3D-touch screen is nice for quick shortcuts but not a killer feature. Basically, the only reason why I would personally want to upgrade is for the bigger screen on the plus model and the battery life that comes with it.
- Animats 10y agoApple is doing just fine. But there's been no Next Big Thing since Jobs. Apple's watch is a dud. Nest's products don't work well. It's like Sony after Akio Moreta died; the company plugs on, but the light has gone out.
- rrdharan 10y agoNot sure how Nest's products are relevant here; they are owned by Google, not Apple. Unless you are saying that there has been no interesting Next Big Thing in the entire consumer hardware/device space? In which case I'm not sure how the reference to Sony is relevant?
- TillE 10y agoThe watch is interesting. I think you can argue that the whole idea is fundamentally flawed (operating a miniscule touchscreen with your greasy paws), but you can also argue that incremental improvements could change a lot of minds. A faster CPU, a thinner device (the first gen Apple Watch is huge), and more useful software are clear areas of potential improvement. I think there's a hypothetical wrist-mounted computer which could be really great, but the Watch obviously isn't there yet.
- megablast 10y ago> Apple's watch is a dud. Why do certain people say this? The watch is a $6.5 billion business in its first year. That is a huge success. Nothing compares to that.
- okc 10y agoI only see it as a matter of time before brands like Xiaomi make cheaper and better products for sale beyond their current dominance in 'developing countries'. We need to catch up.
- petra 10y agoThere was recently a story saying $400 smartphones are almost as good as flagships. Also huawei is attacking the american market with a great $200 phone.
- okc 10y agoI got a phone in Taiwan 1 year ago which was a third of the price of a recent laptop/tablet I purchased in England. The phone had far better specs. Check out the Redmi Note 3, on sale in India for about £100: The Xiaomi Redmi Note 3 is available in two RAM and storage versions - one including 2GB of RAM and 16GB of inbuilt storage, and other 3GB of RAM and 32GB of inbuilt storage. The 2GB variant is priced at Rs. 9,999, while the 3GB variant is priced at Rs. 11,999. The highlight of the new Redmi Note 3 is it packs a hexa-core Snapdragon 650 processor (four Cortex-A53 cores clocked at 1.4GHz and two Cortex-A72 cores clocked at 1.8GHz). Other specifications of the smartphone are identical with the original, including a 5.5-inch full-HD 1080x1920 pixels IPS display and offers 178-degree viewing angle. It runs MIUI 7 based on Android Lollipop and supports dual 4G SIM cards (Micro + Nano). The Redmi Note 3 packs a 4050mAh battery with fast charging support that can charge up to 50 percent in 1 hour. On the camera front, the Xiaomi Redmi Note 3 sports a 16-megapixel rear camera with phase detection autofocus (PDAF) and two-tone flash. It also houses a 5-megapixel front camera. It measures 150x76x8.65mm and weighs 164 grams. For connectivity, the handset supports 4G LTE (compatible with Indian LTE bands), VoLTE, Bluetooth, 3G, GPRS/ EDGE, GPS, Glonass, Wi-Fi, and Micro-USB options. Source: http://gadgets.ndtv.com/mobiles/news/xiaomi-redmi-note-3-to-be-made-available-in-open-sale-today-830696 http://gadgets.ndtv.com/mobiles/news/xiaomi-redmi-note-3-to-...
- petra 10y agoThere are a lot of negative reviews about xiaomi's heavilly modded OS, huawei on the other hand, is more of a pure android experience.
- Shivetya 10y agoWell besides the obvious about the decline in phone sales I think the primary reasons is Apple's steadfast refusal to get in lower margin markets. Sorry, but a four hundred dollar phone is still not cheap enough especially when you consider the monthly usage fees following the purchase. Then we see tablets and all Apple has done is release newer models with higher price points and worse more expensive add ons. Finally, their cheapest desktop is eleven hundred and cheapest laptop is nine hundred for a low powered system, the first realistic laptops start at thirteen hundred. No I don't really count the Mac Mini because it never seems to register on people's radar and by the time you add on the monitor and such its up close to eight and nine hundred. I won't even touch that Watch, its price or the silliness of that is the price of just the bands. Apple's failure is that it won't go low. They don't have to go rock bottom but they damn well need to push "LE" models or the like. Redo the first Air with a few minor upgrades as the Air LE, 299... get an iMac out for the public nearer seven hundred. Get the rest of the iMac line back into realistic pricing especially for SSD upgrades. Please update the Mac Pro, really how long are they going to ignore it? tl;dr Apple simply priced them out of too many markets, either out of ignorance or arrogance.
- sixQuarks 10y agoSo now we found out how long Apple was able to ride Steve Job's coat tails.
- simonh 10y agoBecause under Steve Jobs they would have continued to increase revenue and profit by the same margins every year until they owned the entire planet, and then continued to grow by colonizing Mars with Elon Musk. Or something.
- seizethecheese 10y agoApple is the Ford of smartphones. As the auto industry currently stands, the top selling model each year doesn't earn more than 1% of the industry's total revenue. The question is whether smartphones will eventually become similarly fragmented, or if the ecosystem network effect will maintain a "winner take most" effect.
- brisance 10y agoEven with such results the iPhone sells much better than "1% of the industry's total revenue".
- abritinthebay 10y agoIn this thread: lots of people making unfounded assumuptions and drawing dumb conclusions when anyone who has been paying attention knew this was coming as Apple even said so last quarter. The last year quarter was buoyed by previous quarter supply constraints causing a lot more sales in many categories and products. It's not that this quarter was bad (it was fine) it's that last years quarter was SO GOOD and last quarter had no major supply constraints that we see this. Basically - Apple has got so good at the supply chain it's hurting their numbers for quarters with no new releases. But sure, start speculating about [insert your favorite phone] and writing screeds about phone subsidies/performance/innovation/whatever. It won't be right... but you'll feel better I guess.
- wdewind 10y agoAs someone who basically looked at this as confirming what I believed about the iPhone 6/+ (ie: that it is too big and no one likes it and Apple's sales are going to fall), thanks for this post. Changed my view.
- abritinthebay 10y agoYou're very welcome! I think sales are going to slow down but that is a case of less growth to be had in western markets. Still plenty of growth opportunities in other markets but they'll be slower
- datahack 10y agoI don't know. My iPhone 5s recently died. I went to the Apple store. I looked at the new models. I looked at the version they have that looks like the 5s with better mechanics. I paid $269US for a replacement iPhone 5s. I just couldn't figure out a reason to upgrade. I have the same problem with the iPad. I'll probably upgrade at some point, but the battery life isn't better (and in fact I'd have to repurchase all of the extra phone-sleeve type batteries I have to buy due to Apple's inability to comprehend there are customers that care more about convenience than slimness and weight), and of course storage capacity (which hasn't really changed). I can't be that unusual a customer. I think a lot of people are just done upgrading. For a while there in 2009/11/13 (or was it 10/12/14?) every time you upgraded it really did make a difference... a "quantum leap" in technology. Now, I feel like upgrading just changed the style (and unfortunately accessories) of my phone. Rumor is the 7 is going to do away with standard headsets. That would be a deal breaker for me. I am fatigued of not only replacing the phone, but the $300 in accessories it takes to power/add accessories/run the phone every 2 years. This whole subject around quarterly earnings at Apple always makes me think about this larger trend here called peak stuff. Material consumption is falling in Western countries. Steve Howard did that great interview on the subject on NPR: http://www.npr.org/2016/01/22/464013718/ikea-executive-on-why-the-west-has-hit-peak-stuff http://www.npr.org/2016/01/22/464013718/ikea-executive-on-wh... Apple's products were the pinnacle of aspirations besides a car or home in much of the world, and now... well... they're less so. Still popular, still great products, but maybe there is starting to be some fatigue. It's probably good. Anyone who things unlimited growth as a model on a planet with finite resources is still living in the 20th century anyways. Maybe that's contributing.
- abraca 10y agoI'm glad Apple has some competition with Android. I made the switch to Android after I got multiple "dud" iPhone 6's which stopped working after a few days.
- hcps-longleotc 10y agoOkay so...my class is doing the test now but ms.james just send me a email saying that we not suppose to do the test so...do i stop my kids and just do some other work or do i just let them finish the test and then not put it in the grade book but just put it in for credit work space,what do i do im so....lost rn help me plz
- Rockerczy 10y agoAppointing process optimizer Tim Cook was the biggest mistake of Steve Jobs
- InclinedPlane 10y agoApple incapable of breaking the laws of thermodynamics and physics by continuing uninterrupted growth forever. Film at 11.
- deleted 10y ago[deleted]
- partiallypro 10y agoSales faltering...just wait until the margins dip. Hardware margins the size Apple has enjoyed are incredibly rare and never have lasted with any company, period. Their hardware margins are on par, or even above many software vendors, which is just unsustainable. It's a great product, but the upgrade cycle is lengthening, and margins are going to fall. Same happened to the PC, same started to happen with the tablet, and the same will happen to the phone market.
- adventured 10y ago> Hardware margins the size Apple has enjoyed are incredibly rare and never have lasted with any company, period Intel has routinely maintained gross profit margins of 60%+ for decades on its microprocessor sales. Their hardware margins put Apple to shame.
- john_reel 10y agoIsn’t it closer to 30% when you factor in the cost it takes to build a fab? I remember reading something about that.
- zyngaro 10y agoThe most innovative thing Apple can do now to reverse the course of things is to decrease their outrageously high prices (especially in Europe) and phase out these ridiculous 16GB models.
- reubenswartz 10y agoFor me, the main reason to upgrade phones is to get a better camera, so I can take better pictures of my kids. Other than that, most of the features are "nice to have". Don't get me wrong, I like Touch ID, I like the big screen of the plus (but not the size and slipperiness of the phone), but nothing has been a compelling upgrade, other than camera improvements. In many ways, this is a credit to Apple doing a great job. On the other hand, the real challenge with driving iOS upgrades is software. There's no killer app that requires the latest hardware, unless you care about games and maybe a few drawing apps on the iPad.
- r00fus 10y agoDunno about you, but TouchID is indispensable to me. I would not buy another phone without it (or something as secure). With TouchID + strong alphanumeric password, I can be secure in my person. My data is far more valuable than just the hunk of metal and glass it resides on. I think Apple should do an expansion of their 2008 iFund, but writ bigger (and maybe focused on the watch and apple TV).
- mdorazio 10y agoOut of curiosity, in what way do you feel TouchID makes your phone more secure than just a password? Someone could steal a glass you've touched along with your phone and unlock it with a bit of effort. From a technical standpoint, the only thing TouchID adds in terms of security is preventing someone from peering over your shoulder at a passcode as you enter it, but a would-be thief is more probably far more concerned with selling the hardware than ransoming your data. And if they want your data, iCloud and other services are the real weakpoint.
- coldtea 10y ago>Out of curiosity, in what way do you feel TouchID makes your phone more secure than just a password? Someone could steal a glass you've touched along with your phone and unlock it with a bit of effort. Well, quite a lot more effort. I don't want my data/photos/etc to fell pray to a phone thief -- or a guy that finds the phone after I dropped in a cafe. And Touch ID does that fine. The "fingerprint on glass" scenario you mention concerns dedicated people targeting my data especially -- which is not something I realistically care about. If such people were after my data, they could also use a crowbar and beat me till I tell them my secrets... >but a would-be thief is more probably far more concerned with selling the hardware than ransoming your data. Yes, and I am more concerned about my data than about the hardware -- after all at that point it is already in the thief's hands.
- williesleg 10y agoTim Cook needs to step down. He's not the right guy to run that ship.
- ThomPete 10y agoApple still have $233,000,000,000 in the bank. More than the federal reserve, more than Google, Microsoft, and Facebook combined. They could buy their way out of this I am pretty sure.
- tcoppi 10y agoBuy their way out of it? How? They obviously don't have anything profitable to invest their excess cash in, since it is either sitting in the bank or going to stock buybacks or dividend increases.
- ThomPete 10y agohttp://www.marketwatch.com/story/apple-hints-at-big-acquisition-to-cure-growth-ills-2016-04-26 http://www.marketwatch.com/story/apple-hints-at-big-acquisit...
- tcoppi 10y agoYeah, because Beats has been working out so well for them. If they could get something to improve their cloud services competitiveness vs Google, maybe something like Dropbox, I could see that helping them long-term. Otherwise I don't think anything they could acquire would be anything more than a play at becoming a conglomerate ala GE at this point, there simply aren't many companies with a proven core product out there that can help Apple get out of this mess, except by expanding outward. Not that there is anything wrong with being a conglomerate, Alphabet/Google is basically on its way to becoming one too, and GE is wildly profitable, I just don't see Apple playing well in that space. They need to concentrate on something.
- ThomPete 10y agoIt worked fine for MS. I think Apple have no where to go than to buy companies. In fact most of their revolutionary products were products or technologies they bought. It's typical apple strategy, they are just worth so much now that it's hard to see their acquisitions as anything but a drop in the water. Until now I guess. They could buy Twitter, they could buy Box (or dropbox) or some other cloud solution, they could buy Stripe, they could buy Slack, they could buy so many companies and use their size to leverage those into something truly groundbreaking. So I don't think it's that far out.
- deleted 10y ago[deleted]
- Geojim 10y agoCut prices on their ageing cash cow, or start flogging that faltering horse? Smart money's on the latter. Kinda painful to re-watch the Apple II moment while android ambles off into the sunset with all the users....
- fataliss 10y agoSweet, time to buy more. I was holding off since it was obvious that prices over 100$/share without any new products to excite the imagination of traders with no technology background wasn't going to last forever. It' always interesting to me how wall street lacks any depth in their analysis. Direct sales and revenues are basically the only metrics they look at. Which is fine for a small company but when you are looking at a 700B company, spending 8B a year in R&D being that shortsighted is almost funny.
- dvhh 10y agoIn weird analogies, I think the 5S is the Apple's playstation 2 ( good enough for everything and really really no incentive to upgrade except for the enthusiasts ).
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- tn13 10y agoWell there will always be regression to mean. I wonder what is the case with their App revenue.
- dschiptsov 10y agoIt is probably end of the era moment, like the end of PC back in 2005. Personal Computer is nothing special and even status/luxury brands does not make real difference. PC is mere cheap commodity. Now there is moment when smartphone is just a phone. Apple or any other brand - does not make real difference. Some, say, MicroMax or Huawey Android stuff is about $150, and it gives you everything, except 3D. It is just a phone.
- known 10y agoI'm happy with my iPhone 4S
- reuven 10y agoMy wife has an iPhone 4. She's not a technical person; she just wants a phone and some apps. She has no interest in upgrading. Moreover, her iPhone 4 was the first smartphone in our family. Since she got her phone (and stuck with it), I've gone through at least four or five phones -- always because they broke, not because I was interested in upgrading. So I'm guessing that while there are lots of Apple gotta-have-the-latest people out there, most people just want a phone that works. And if Apple's hardware and software quality are good (or even half-good), then people will just keep using their old phones. Which means that Apple will continue to sell phones, but the number of people who will buy or upgrade each year will shrink, at least to some degree. It should also be noted that Apple is still very profitable! It's just less profitable than it was last year.
- yeureka 10y agoI hope the lack of growth in hardware sales makes the company improve their services and lower their hardware prices instead of trying to increase hardware replacement rates via shorter life cycles.
- Ayaz 10y agoUntil some months ago, I had a factory unlocked iPhone 5 which I used for 2+ years. I had no reason to switch to a more recent model, other than the (at times) nagging need for the finger-print lock. Then, out of the blue, the battery on my iPhone began to malfunction, in that, it would only let the phone stay on for a couple of minutes unless it was plugged constantly to a power source. I bought an iPhone 6S, space gray, factory unlocked at around $650 (excluding tax). I sent my iPhone 5 back to Apple for a recycle. They gave me $200 in iTunes gift money. So, all in all, I got a new iPhone 6S for $450 (excluding tax).
- hasan459 10y agowhy sales drop?
- epalmer 10y agoI just upgraded from being a long time iPhone user to a nexus6p and an delighted. Most of the UI makes more sense to me. The camera is amazing and the integration with Google apps as first class apps is a positive. Being able to voice command the device without a power cord plugged in is an added benefit. I can't imagine going back to iPhones.
- adav 10y agoApple's probably just biding its time with the iPhone while it works to soup-up the Apple Watch - add cellular, more power, more battery, smaller package. I reckon the iPhone (and maybe iPad) will transition into just a dumb accessory screens. My thinking is that this follows the trend: Desktop (power on your desk) -> Laptop (power in your bag) -> Smartphone (power in your pocket) -> Watch? (power on your person)
- mrmondo 10y agoEvery year I see a similar post over hyped a few months before a new major model is released. Then it won't be long before I see a post stating Apple's sales and stock are at an all time high. I swear this happens every year.
- erikj 10y agoI wonder if Apple is going to find a new market with the potential for massive growth any time soon. So far smartwatches don't seem to be such a market.
- greedo 10y agoThe Apple watch outsold the iPhone in it's first year, so a bit premature to write it off.
- Corrado 10y agoI've said this before but I think it's because my socks are most definitely still on my feet, and have been for the last several years. Apple used to come up with new, distinctive, products that had me gasping for air and figuratively knocking my socks off. Not anymore. I don't want to say it's because of the loss of Jobs but it sure seems that way. I really like Tim but he seems like a production guy instead of a product guy. Come on Apple, where are the revolutionary products of yesteryear? 3D displays? AR/VR technology? Home automation? iPod headphones? Voice recognition (ala Alexa)? I used to look to Apple for a glimpse of the future; not anymore. :(
- talmand 10y agoSo, does this mean we shall start seeing "the iPhone is dead" click-bait articles like we see with other similar tech products when their sales slump for various reasons?
- mark_l_watson 10y agoI have been a happy Android user for years but was planning on switching to an iPhone next time for compatibility with my iPads. I changed my mind because of the Google Fi service. I can get a compatible phone for $200, and I project my monthly service plan would be less than half than my Verizon plan, given my usage patterns. I do worry that Google might drop the Fi service, or change the features/cost in the future though.
- circa 10y agoI'm not surprised at all. I don't get why people are. Anyone who wants one, pretty much has one at this point. Those who have them within the past few years are most likely happy with them. The bubble won't exactly burst but it will decrease.