15 ms·

Apple Reports Second Quarter Results

55 points by ucha 9y ago

IBM 9y ago
Big narrative violations: Mac units up 4% year over year, revenue up 14% year over year. Last quarter it was up 1% and 7%. In contrast Surface revenue was down 26% year over year. Other products (which include Apple Watch and AirPods) revenue was up 31% year over year. Tim Cook just said on the call that Apple Watch sales doubled year over year.
- jsight 9y ago
  It is interesting that Apple Watch sales are starting climbing. I have definitely noticed a lot more of them on appearing on wrists during the past 6 months.
  - vannevar 9y ago
    I think they may be benefiting from the fitness device trend in a somewhat unexpected way: everyone is getting used to wearing an ugly-looking wrist device, or seeing them on other people, so the fashion barrier is not as steep as it was a couple of years ago. My original thought about the watch was that it was going to need to get smaller and a lot better-looking before it really caught on, but maybe not...
    - eric_h 9y ago
      The fact that the second revision of the watch is actually bigger than the first makes this all quite surprising.
      - 4rt 9y ago
        i guess it makes it more visible. apple products are very expensive and everybody knows that now, not just computery people.
        charlesdm 9y ago
        Most mechanical watches are a magnitude more expensive than an Apple watch and tend to be smaller and not flashy at all. If you want to impress others.. don't wear an Apple watch. But if you like it as a watch, go for it!
    - Steko 9y ago
      I see more watches but still question whether it's 'really caught on'. I don't have a fashion objection but for me the basic functionality of waiting for the face to light up is close to a dealbreaker and the convenience of Apple Pay seems to be moving backward as I'm forced to use my PIN and sign in all sorts of places I used to be able to just wave my phone at.
      - lparry 9y ago
        > the convenience of Apple Pay seems to be moving backward as I'm forced to use my PIN and sign in all sorts of places I used to be able to just wave my phone at. This is a rant against how you imagine things work, instead of how they actually work. I put my watch on in the morning and it is automatically unlocked the next time I unlock my phone with touch id. From this point on, the pin is never required. Apple Pay is just a double click on the long button, no pin entry as you've imagined if the watch is unlocked, which is true unless you've only just put on the watch. waiting for the face to light up however, is a legit complaint. It really sucks that there's not even an option for "always on" that you could use while working out, as it's a pain in the ass to be running and want to check your current pace and find that wrist-flick detection failed so you're staring at an off instead of getting the data you wanted and getting back to looking where you're going quickly again.
        TomSawyer 9y ago
        He's talking about having to enter the PIN for his debit card into the POS keypad.
        bogositosius 9y ago
        How can a retailer ask for a PIN number on an Apple Pay transaction? They don't even know what account the money actually comes from, since Apple Pay only gives them a one-time use number for that single transaction. So how can they verify a PIN number in that context?
        9y ago
    - perseusprime11 9y ago
      It is not as bad as you think in terms of fashion. I had a lot of people compliment me as I wear my Apple watch with a tan leather suede strap.
    - TomSawyer 9y ago
      I've witnessed this phenomenon multiple times. 1. Person buys or is gifted a Fitbit because it's inexpensive 2. Person retrains themselves to wear something on their wrist 3. Person is convinced that fitness tracking is beneficial 4. Person is fed up with the low quality of their Fitbit or it has out right fallen apart 5. Person buys an Apple Watch
      - eldavido 9y ago
        I have no reason to believe this is going to happen, but I wish Timex would buy Fitbit. FIT's market cap is right around a billion these days, which is affordable for a large, public company. Fitbit = good software, good product DNA, garbage manufacturing, in need of better distribution. Timex = great manufacturing, can't make software to save their lives, used to competing in a high-volume, low-margin retail environment
      - brlewis 9y ago
        I work for but don't speak for Fitbit. I bet all the times you witnessed that phenomenon it was a Fitbit Charge HR. The 2016 and 2017 Fitbit trackers (Blaze, Alta, Charge 2, Flex 2, Alta HR) have way fewer issues with manufacturing quality.
    - icanhackit 9y ago
      The magnetic Milanese loop is perfect for taking the sting out of a watch that you need to take off regularly to charge. I can take it off or put it on in around 2 seconds. I've never owned a watch so easy to put on or remove. It's up there with the magsafe (RIP) and detachable cover for the iPad with ease of use. I <3 magnets.
    - jsight 9y ago
      I agree, I definitely think that is part of it.
  - mrtksn 9y ago
    Same. I think people are starting to figure out what it is and that it's not just a toy for geeks. I definitely see it much more on women than men.
  - skc 9y ago
    I see them quite a bit now so they are definitely a smash hit, but I still find that all I ever see people actually do with them is wear them.
  - jsz0 9y ago
    The watchOS 3 update was a game changer for the Watch. So much so that it makes me wonder if the dock UI was supposed to be in watchOS 1 and had to be scrapped at the last minute. If you look back at the original watchOS UI it's sort of like using an iOS device without SpringBoard. Everything was there but it was missing a center of gravity to tie everything together.
- csomar 9y ago
  Not saying that the new macbook pro is worse than the previous one. But having more sales doesn't have to do with a better product. The brand, network of sellers, marketing and product fit are more important.
  - pilsetnieks 9y ago
    None of those things have changed much, compared to last year.
- logicallee 9y ago
  >Big narrative violations: Could you rephrase that? It's interesting but I don't understand the words you introduce it with (that I just quoted). What does that mean?
  - 6nf 9y ago
    My interpretation: 'The narrative' over the last 6 months was that the new Macbook Pro is no longer a 'pro' level device and as a result 'pro' users everywhere are switching to other brands which means bad sales results for Apple. But today's numbers show increased sales instead, so 'the narrative' was flawed.
    - teaneedz 9y ago
      I didn't see exact numbers or returns for MBPs. Satisfaction is another thing. If alternatives are worse, a purchase is not necessarily from a satisfied customer.
  - zwily 9y ago
    Lots of stories in the past year about how the new MacBook Pros are awful and nobody will buy them. That's "the narrative", exaggerated a little, and it doesn't seem to be the case.
deleted 9y ago
[deleted]
nodesocket 9y ago
The Board approved a 10.5% increase to the Apple's quarterly dividend, and has declared a dividend of $0.63 per share of common stock, payable on May 18, 2017 to shareholders of record as of the close of business on May 15, 2017. Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow.
- tcoppi 9y ago
  > Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow. Or means that they have nothing else productive to do with their cash.
  - charlesdm 9y ago
    They just have massive cash reserves. They could spend $50bn on R&D for new products, and still have plenty left.
  - nodesocket 9y ago
    Typically this is not true. When public companies buy their own stock, this is considered a very positive signal. Apple could do most anything they want (including buying most any company) with their cash hoard.
    - golfer 9y ago
      Not necessarily. IBM has had 20 consecutive quarters of declining revenue [1]. They continue to buy back stock, adding $3B to their repurchase program last year. They've bought back stock furiously since 1999 [2]. It's a defensive measure to reduce the share float, and thereby juice EPS. [1] https://www.bloomberg.com/news/articles/2017-04-18/ibm-misses-estimates-in-20th-straight-quarterly-revenue-decline https://www.bloomberg.com/news/articles/2017-04-18/ibm-misse... [2] https://seekingalpha.com/article/3977909-ibm-bought-155-billion https://seekingalpha.com/article/3977909-ibm-bought-155-bill...
      - 9y ago
csomar 9y ago
Is this below market expectations? It seems that the stock is down 2% in after hours trading.
- Esau 9y ago
  I've been watching this for years and, frequently, Apple stock value goes down after the company announces it has met or exceeded expectations. I have no idea why this happens.
  - jostmey 9y ago
    Someone told me that market behavior is anticipatory. Makes sense I guess. So everyone must be assuming that because expectations are up now (because of new stuff), that they will be down next quarter (no new stuff coming)?
  - smileysteve 9y ago
    > I have no idea why this happens. Buy the rumour, sell the news
- Steko 9y ago
  AAPL just fell to where it was early yesterday. People bought it hoping for blowout numbers and stock going crazy and then sell off when it doesn't happen.
- nodesocket 9y ago
  The announcement and call was simply "mhew..." as expected. Nothing really happening until the next quarter. The drop in after hours again is tiny compared to the run-up in the last three months $AAPL has had.
- reacharavindh 9y ago
  Could it be because of a news[1] that iPhone8 may be delayed until 2018, and they would try to see a iPhone &s that would look like the 7 instead? [1] https://www.theverge.com/circuitbreaker/2017/5/2/15518898/apple-iphone-8-rumor-delay-2018-oled-manufacturing-7s-deutsche-bank https://www.theverge.com/circuitbreaker/2017/5/2/15518898/ap...
ChuckMcM 9y ago
It is amazing to think about Apple in terms of its size and influence on computing compared to IBM. And that makes me wonder who is going to replace Apple 30 years from now, or if Apple will have a 100+ year run like IBM has. I hope they get a chance to repatriate their cash hoard.
- eldavido 9y ago
  I've thought about this a lot, and here's my .02 on the matter. If you look at politics now, there's a decidedly anti-elitist trend. This is why Trump got elected. I felt the movie "Hell or High Water" portrayed the ex-Bay Area/other "creative class" cities' zeitgeist really well. There are just a huge number of people struggling to get by, trying to make their mortgage payments, in tons of debt. At the same time, I find Snap fascinating. Anecdotally, it seems to appeal to young people, people bored working low-end jobs, and others I wouldn't call "rich". And despite the CEO's dumb comments about "a social network for rich people", there's a raw, back-to-basics, "for normal people" feel they've worked hard to cultivate. I think that if Apple isn't careful, they could be seen as an elitist, out-of-touch, "rich person" phone company. Like, "this is the phone for people who drive E-Class Mercedes. I want a phone for people who drive a truck, drink Miller, and watch football". I could totally see this happening if the Asian Android manufacturers keep nipping at their heels. At some point, phones are going to hit saturation in terms of how much new functionality people care about. And I think there will be a space for a device that's further downmarket, more affordable, and not as aspirational/elitist as an iPhone. It would be a phone that does about 80% of what an iPhone does today, GPS, video calls, camera, good battery life, etc., but without some of the really "gadgety" recent stuff on the iPhone, like 3D touch. I also think that if computing overall moves to more of a conversational/message-oriented paradigm, it's going to cause the form factor of phones to change a lot, and become more "invisible" in favor of simpler devices, or even a pair of headphones that talk directly to a mobile network. The other thing to keep in mind, history shows incumbent tech companies aren't "replaced", they're just outgrown by new ones. IBM is _still_ selling mainframes, just not PCs or mobile phones. So the more likely case is, some new thing comes up and has even broader appeal than Apple products. Granted, it's hard to see how that could happen with their sales volumes, but that's what history suggests.
ihuman 9y ago
MacStories has nice graphs comparing this quarter to past quarters: https://www.macstories.net/news/apple-q2-2017-results-529-billion-revenue-508-million-iphones-89-million-ipads-sold/#twitter-widget-7 https://www.macstories.net/news/apple-q2-2017-results-529-bi...

55 points by ucha 9y ago

IBM 9y ago

Big narrative violations: Mac units up 4% year over year, revenue up 14% year over year. Last quarter it was up 1% and 7%. In contrast Surface revenue was down 26% year over year. Other products (which include Apple Watch and AirPods) revenue was up 31% year over year. Tim Cook just said on the call that Apple Watch sales doubled year over year.

jsight 9y ago
It is interesting that Apple Watch sales are starting climbing. I have definitely noticed a lot more of them on appearing on wrists during the past 6 months.
- vannevar 9y ago
  I think they may be benefiting from the fitness device trend in a somewhat unexpected way: everyone is getting used to wearing an ugly-looking wrist device, or seeing them on other people, so the fashion barrier is not as steep as it was a couple of years ago. My original thought about the watch was that it was going to need to get smaller and a lot better-looking before it really caught on, but maybe not...
  - eric_h 9y ago
    The fact that the second revision of the watch is actually bigger than the first makes this all quite surprising.
    - 4rt 9y ago
      i guess it makes it more visible. apple products are very expensive and everybody knows that now, not just computery people.
      - charlesdm 9y ago
        Most mechanical watches are a magnitude more expensive than an Apple watch and tend to be smaller and not flashy at all. If you want to impress others.. don't wear an Apple watch. But if you like it as a watch, go for it!
  - Steko 9y ago
    I see more watches but still question whether it's 'really caught on'. I don't have a fashion objection but for me the basic functionality of waiting for the face to light up is close to a dealbreaker and the convenience of Apple Pay seems to be moving backward as I'm forced to use my PIN and sign in all sorts of places I used to be able to just wave my phone at.
    - lparry 9y ago
      > the convenience of Apple Pay seems to be moving backward as I'm forced to use my PIN and sign in all sorts of places I used to be able to just wave my phone at. This is a rant against how you imagine things work, instead of how they actually work. I put my watch on in the morning and it is automatically unlocked the next time I unlock my phone with touch id. From this point on, the pin is never required. Apple Pay is just a double click on the long button, no pin entry as you've imagined if the watch is unlocked, which is true unless you've only just put on the watch. waiting for the face to light up however, is a legit complaint. It really sucks that there's not even an option for "always on" that you could use while working out, as it's a pain in the ass to be running and want to check your current pace and find that wrist-flick detection failed so you're staring at an off instead of getting the data you wanted and getting back to looking where you're going quickly again.
      - TomSawyer 9y ago
        He's talking about having to enter the PIN for his debit card into the POS keypad.
        bogositosius 9y ago
        How can a retailer ask for a PIN number on an Apple Pay transaction? They don't even know what account the money actually comes from, since Apple Pay only gives them a one-time use number for that single transaction. So how can they verify a PIN number in that context?
        9y ago
  - perseusprime11 9y ago
    It is not as bad as you think in terms of fashion. I had a lot of people compliment me as I wear my Apple watch with a tan leather suede strap.
  - TomSawyer 9y ago
    I've witnessed this phenomenon multiple times. 1. Person buys or is gifted a Fitbit because it's inexpensive 2. Person retrains themselves to wear something on their wrist 3. Person is convinced that fitness tracking is beneficial 4. Person is fed up with the low quality of their Fitbit or it has out right fallen apart 5. Person buys an Apple Watch
    - eldavido 9y ago
      I have no reason to believe this is going to happen, but I wish Timex would buy Fitbit. FIT's market cap is right around a billion these days, which is affordable for a large, public company. Fitbit = good software, good product DNA, garbage manufacturing, in need of better distribution. Timex = great manufacturing, can't make software to save their lives, used to competing in a high-volume, low-margin retail environment
    - brlewis 9y ago
      I work for but don't speak for Fitbit. I bet all the times you witnessed that phenomenon it was a Fitbit Charge HR. The 2016 and 2017 Fitbit trackers (Blaze, Alta, Charge 2, Flex 2, Alta HR) have way fewer issues with manufacturing quality.
  - icanhackit 9y ago
    The magnetic Milanese loop is perfect for taking the sting out of a watch that you need to take off regularly to charge. I can take it off or put it on in around 2 seconds. I've never owned a watch so easy to put on or remove. It's up there with the magsafe (RIP) and detachable cover for the iPad with ease of use. I <3 magnets.
  - jsight 9y ago
    I agree, I definitely think that is part of it.
- mrtksn 9y ago
  Same. I think people are starting to figure out what it is and that it's not just a toy for geeks. I definitely see it much more on women than men.
- skc 9y ago
  I see them quite a bit now so they are definitely a smash hit, but I still find that all I ever see people actually do with them is wear them.
- jsz0 9y ago
  The watchOS 3 update was a game changer for the Watch. So much so that it makes me wonder if the dock UI was supposed to be in watchOS 1 and had to be scrapped at the last minute. If you look back at the original watchOS UI it's sort of like using an iOS device without SpringBoard. Everything was there but it was missing a center of gravity to tie everything together.
csomar 9y ago
Not saying that the new macbook pro is worse than the previous one. But having more sales doesn't have to do with a better product. The brand, network of sellers, marketing and product fit are more important.
- pilsetnieks 9y ago
  None of those things have changed much, compared to last year.
logicallee 9y ago
>Big narrative violations: Could you rephrase that? It's interesting but I don't understand the words you introduce it with (that I just quoted). What does that mean?
- 6nf 9y ago
  My interpretation: 'The narrative' over the last 6 months was that the new Macbook Pro is no longer a 'pro' level device and as a result 'pro' users everywhere are switching to other brands which means bad sales results for Apple. But today's numbers show increased sales instead, so 'the narrative' was flawed.
  - teaneedz 9y ago
    I didn't see exact numbers or returns for MBPs. Satisfaction is another thing. If alternatives are worse, a purchase is not necessarily from a satisfied customer.
- zwily 9y ago
  Lots of stories in the past year about how the new MacBook Pros are awful and nobody will buy them. That's "the narrative", exaggerated a little, and it doesn't seem to be the case.

deleted 9y ago

[deleted]

nodesocket 9y ago

The Board approved a 10.5% increase to the Apple's quarterly dividend, and has declared a dividend of $0.63 per share of common stock, payable on May 18, 2017 to shareholders of record as of the close of business on May 15, 2017. Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow.

tcoppi 9y ago
> Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow. Or means that they have nothing else productive to do with their cash.
- charlesdm 9y ago
  They just have massive cash reserves. They could spend $50bn on R&D for new products, and still have plenty left.
- nodesocket 9y ago
  Typically this is not true. When public companies buy their own stock, this is considered a very positive signal. Apple could do most anything they want (including buying most any company) with their cash hoard.
  - golfer 9y ago
    Not necessarily. IBM has had 20 consecutive quarters of declining revenue [1]. They continue to buy back stock, adding $3B to their repurchase program last year. They've bought back stock furiously since 1999 [2]. It's a defensive measure to reduce the share float, and thereby juice EPS. [1] https://www.bloomberg.com/news/articles/2017-04-18/ibm-misses-estimates-in-20th-straight-quarterly-revenue-decline https://www.bloomberg.com/news/articles/2017-04-18/ibm-misse... [2] https://seekingalpha.com/article/3977909-ibm-bought-155-billion https://seekingalpha.com/article/3977909-ibm-bought-155-bill...
    - 9y ago

csomar 9y ago

Is this below market expectations? It seems that the stock is down 2% in after hours trading.

Esau 9y ago
I've been watching this for years and, frequently, Apple stock value goes down after the company announces it has met or exceeded expectations. I have no idea why this happens.
- jostmey 9y ago
  Someone told me that market behavior is anticipatory. Makes sense I guess. So everyone must be assuming that because expectations are up now (because of new stuff), that they will be down next quarter (no new stuff coming)?
- smileysteve 9y ago
  > I have no idea why this happens. Buy the rumour, sell the news
Steko 9y ago
AAPL just fell to where it was early yesterday. People bought it hoping for blowout numbers and stock going crazy and then sell off when it doesn't happen.
nodesocket 9y ago
The announcement and call was simply "mhew..." as expected. Nothing really happening until the next quarter. The drop in after hours again is tiny compared to the run-up in the last three months $AAPL has had.
reacharavindh 9y ago
Could it be because of a news[1] that iPhone8 may be delayed until 2018, and they would try to see a iPhone &s that would look like the 7 instead? [1] https://www.theverge.com/circuitbreaker/2017/5/2/15518898/apple-iphone-8-rumor-delay-2018-oled-manufacturing-7s-deutsche-bank https://www.theverge.com/circuitbreaker/2017/5/2/15518898/ap...

ChuckMcM 9y ago

It is amazing to think about Apple in terms of its size and influence on computing compared to IBM. And that makes me wonder who is going to replace Apple 30 years from now, or if Apple will have a 100+ year run like IBM has. I hope they get a chance to repatriate their cash hoard.

eldavido 9y ago
I've thought about this a lot, and here's my .02 on the matter. If you look at politics now, there's a decidedly anti-elitist trend. This is why Trump got elected. I felt the movie "Hell or High Water" portrayed the ex-Bay Area/other "creative class" cities' zeitgeist really well. There are just a huge number of people struggling to get by, trying to make their mortgage payments, in tons of debt. At the same time, I find Snap fascinating. Anecdotally, it seems to appeal to young people, people bored working low-end jobs, and others I wouldn't call "rich". And despite the CEO's dumb comments about "a social network for rich people", there's a raw, back-to-basics, "for normal people" feel they've worked hard to cultivate. I think that if Apple isn't careful, they could be seen as an elitist, out-of-touch, "rich person" phone company. Like, "this is the phone for people who drive E-Class Mercedes. I want a phone for people who drive a truck, drink Miller, and watch football". I could totally see this happening if the Asian Android manufacturers keep nipping at their heels. At some point, phones are going to hit saturation in terms of how much new functionality people care about. And I think there will be a space for a device that's further downmarket, more affordable, and not as aspirational/elitist as an iPhone. It would be a phone that does about 80% of what an iPhone does today, GPS, video calls, camera, good battery life, etc., but without some of the really "gadgety" recent stuff on the iPhone, like 3D touch. I also think that if computing overall moves to more of a conversational/message-oriented paradigm, it's going to cause the form factor of phones to change a lot, and become more "invisible" in favor of simpler devices, or even a pair of headphones that talk directly to a mobile network. The other thing to keep in mind, history shows incumbent tech companies aren't "replaced", they're just outgrown by new ones. IBM is _still_ selling mainframes, just not PCs or mobile phones. So the more likely case is, some new thing comes up and has even broader appeal than Apple products. Granted, it's hard to see how that could happen with their sales volumes, but that's what history suggests.

ihuman 9y ago

MacStories has nice graphs comparing this quarter to past quarters: https://www.macstories.net/news/apple-q2-2017-results-529-billion-revenue-508-million-iphones-89-million-ipads-sold/#twitter-widget-7 https://www.macstories.net/news/apple-q2-2017-results-529-bi...