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Apple Q2 Results

119 points by css 7y ago

deleted 7y ago
[deleted]
mikece 7y ago
"Apple no longer reports iPhone, iPad, and Mac unit sales numbers..." Probably because they only care about revenue and profits these days, not innovation and products. Apple didn't get to where they are by optimizing the supply chain but by coming up with incredible products that everyone HAD to have. I bought an iPhone last spring because it was the least-bad option in my opinion; if the Librem 5 is a flop I don't know what I'll get when my current phone dies because I will NOT buy a phone that unlocks by FaceID.
- jjtheblunt 7y ago
  You can turn FaceID off.
  - r00fus 7y ago
    TouchID still has less lag - and I can auth/unlock from my pocket. FaceID is great for my aging parents who have calloused hands, but I still prefer TouchID.
    - mixmastamyk 7y ago
      Can ya still turn TouchID off? (haha)
      - saagarjha 7y ago
        You can not register any fingerprints, yes.
    - zaroth 7y ago
      I much prefer FaceID. It seems faster not slower for me than TouchID was, I like that it enables a full frontal screen, and I love not having a home button. I also really like when my kids steal my phone and try to get it to unlock by holding it up to me and I can make funny faces at it so it won’t. But maybe that’s just me. And to anticipate the follow-on to that, if a true adversary is holding my phone and it hasn’t been hard-locked through power-off of rapid click sequence, then I’ve already lost, whether it’s TouchID or FaceID.
      - mft_ 7y ago
        I find FaceID worse than TouchID, in a couple of ways: 1. It's very common both at work and at home that the iPhone is flat on a table and I want to quickly unlock it to check something. Previously, snaking a finger out was sufficient; now, I have to deliberately pick it up, look at it, and then swipe upwards. (It's also much more conspicuous in meetings.) 2. FaceID seems to struggle (i.e. fail to unlock, or delay the unlock) more often than TouchID - it seems quite sensitive to the angle it's held at as it scans my face.
        bcatanzaro 7y ago
        Another problem is that you don't get to control the start of a FaceID scan. Many apps that I use (mostly for banking) have some non-deterministic loading procedure that can take from 1-20 seconds. At some point, the load completes and the app initiates a FaceID scan. If you're not holding the phone at the right angle at that moment, the scan fails. Then it falls back to a passcode. It's a terrible user experience. They should give me the chance to push a button after I've gotten the phone in the right position before initiating the scan. Or they should give me the chance to retry the scan if I wasn't ready. As it is, they expect me to hold my phone rigidly for a non-deterministic amount of time in order to use FaceID.
        macintux 7y ago
        Interesting point. Definitely worth noting that’s the apps’ fault: my primary banking app waits for me to trigger FaceID.
    - jen20 7y ago
      Out of interest do you live somewhere which is never cold enough to require gloves?
- oflannabhra 7y ago
  They actually state why they don't report unit sales numbers: they aren't meaningful now that the iPhone is no longer opening in new markets, the mobile phone market has reached maturity, and the number that is meaningful for their business growth is active devices. I'm not going to defend Apple's reasons for crafting their message to Wall Street, but to say that they only care about revenue and profits, but not innovation or products, just doesn't follow from sales number reporting (or from their other actions, in my opinion).
- baoha 7y ago
  Can we just stop with the 'Apple stopped innovating' propaganda, the same thing can be said about any big corps, be it Google/FB/Netflix/... Innovation doesn't just mean creating new products (the Airpod is one of Apple's killer product by the way), improving current products used by millions of people while keeping them coming back to buy more and more is not easy, this is also counted as innovation in my book.
- ancorevard 7y ago
  Because the number is the wrong metric for measuring the health of their products and customers. Unfortunately, the financial analysts have been so intensely focused on unit metrics to the point that they can't seem to grasp the true reality and condition of the company. As a result, Apple had to go so far as to: 1) State that their goal is to make their devices last longer. 2) Stop giving unit numbers. Still, I anticipate it will take years before financial analysts to internalize the true nature of this beast. See: http://www.asymco.com/2018/09/13/lasts-longer/ http://www.asymco.com/2018/09/13/lasts-longer/
  - saagarjha 7y ago
    Any company that publicly claimed that their goal was to make devices that have a shorter lifetime would be raked over the coals, FWIW.
  - eertami 7y ago
    >1) State that their goal is to make their devices last longer. Either a lie or they don't know what the word 'goal' means after shipping their devices with high failure rate keyboards?
- scarface74 7y ago
  Well, seeing that their Apple Watch business is the size of a F200 company. I think they are doing well. Also, if you compare their revenue mix and knowing Apple you know they are running each part profitably, they are doing much better than Google who after all of these years is still just an ad company. https://sixcolors.com/images/content/2019/financials-2019-4-3-1.png https://sixcolors.com/images/content/2019/financials-2019-4-...
- rkho 7y ago
  > Apple didn't get to where they are by optimizing the supply chain but by coming up with incredible products that everyone HAD to have Apple's supply chain used to have some really bad inventory turnover numbers. Unsold inventory would literally sit in warehouses depreciating in value, costing the company lots of money. You might be interested in reading this piece on Tim Cook's changes to the supply chain: https://money.cnn.com/2008/11/09/technology/cook_apple.fortune/index.htm https://money.cnn.com/2008/11/09/technology/cook_apple.fortu... It's either misguided or completely dishonest for you to assert that Apple's supply chain management plays second fiddle to its products when it comes to their success as a company.
- georgespencer 7y ago
  > Probably because they only care about revenue and profits these days, not innovation and products Apple seems, to me at least, to have more conviction that innovation and fantastic products lead to revenue and profits than any company operating in the consumer hardware space today. And there are plenty of comparatively awesome companies who innovate and invest in breakthrough products (Google, Tesla… Microsoft(!)). They likely no longer split out those product categories for several reasons: 1. Their financial results are news in the mainstream media, and their customers read the mainstream media. If the ASP of an iPhone rises to $1,000 and grows revenue whilst offsetting a contraction in unit sales, it's great news for Apple and its investors, and likely not a sign of anything other than a maturing market -- but it won't be reported as anything other than stagnation or doom and gloom by the mainstream media. 2. Apple's future, and maybe the future, is not in one-off transactions. We've seen most professional and a lot of consumer software move towards subscription pricing steadily over the last decade. Hardware is going to go the same way, and Apple is preparing for that. Persuading people to stay in their ecosystem (NB not "locking people in" -- it's pretty easy to "leave" the Apple ecosystem) is going to be a combination of hardware, software, and services, and customers will be paying some sort of blended subscription which includes hardware and software. It's predictable, steady revenue for them, and it obviates the need for stupid "how many units did you ship hurr durr" conversations.
- deleted 7y ago
  [deleted]
r00fus 7y ago
AAPL up by 10pts (~5%) afterhours as of this comment timestamp. Is this purely due to the dividend announcement?
- vesrah 7y ago
  Partially, along with beating expected EPS by $0.09 and expected revenue by 400MM.
- teej 7y ago
  EPS beat estimates by 4%, $2.46 vs $2.36.
- thtthings 7y ago
  Dividend announcement doesn't make stocks go up. They actually go down by the amount of dividend.
  - robryan 7y ago
    After the dividend record date, before it they do go up by a similar amount to the dividend of it wasn’t already priced in at all.
  - deleted 7y ago
    [deleted]
- Bahamut 7y ago
  I wonder if stock buybacks is part of it.
minimaxir 7y ago
From the financial statements, revenue from Wearables, Home, and Accessories was up 30% vs the last year. There wasn't a huge release this quarter (aside from the AirPods refresh which was at the edge of the March 30th cutoff), so I wonder why it went up so much.
- Despegar 7y ago
  Watch and AirPods are early in the S curve of adoption and have clear product market fit and no viable competitors. It's clearly inflecting higher.
  - Godel_unicode 7y ago
    AirPods have plenty of viable competitors. They also sound bad, and aren't water-resistant to speak of. Their main competitive advantage is they come in Apple white and are conspicuous enough that people see them. Add in that they were near the end of the release cycle and it's definitely weird how much they went up.
    - __blockcipher__ 7y ago
      I think this is a totally naive viewpoint. Despite the memes, Airpods aren't just a mere status symbol (and as status symbols they are very poor ones, which I think is the whole joke about airpods => rich). What makes them incredible is their seamlessness. They do have occasional bluetooth fuckery but they felt like the first wireless earbuds that just worked^TM.
      - Godel_unicode 7y ago
        This is a very common take from people who have never used Bluetooth headphones before. I've had several sets of Bluetooth headphones and earbuds in the past, and they've been the same type of "just works" experience for me. Except better sound quality, and frequently water resistant. If you like the AirPods then that's great for you, but stop pretending they're some fantastic innovation over what came before, or that they've kept up with what's come out since.
joobus 7y ago
> The Company posted quarterly revenue of $58 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10 percent. So they are shrinking, not growing.
- ancorevard 7y ago
  Remove China from their numbers, and they are growing. China's economy is still cratering.
  - mtw 7y ago
    It's more like Huawei and Oppo are winning vs Apple https://www.cnn.com/2019/02/14/tech/huawei-smartphones-china/index.html https://www.cnn.com/2019/02/14/tech/huawei-smartphones-china...
    - rgbrenner 7y ago
      "Demand for the Chinese tech company's [Huawei] devices is red hot even though the country's overall market for smartphones is shrinking." That's the second sentence in your link. And it says Oppo grew at 1.1% (in 2018q4)-- that's not exactly winning. Xiaomi plummeted 28%, even more than apple. There's clearly more going on than a simple competition between apple and Huawei. https://www.engadget.com/2019/03/13/smartphone-sales-china-plummet/ https://www.engadget.com/2019/03/13/smartphone-sales-china-p... More recent data shows Oppo and Vivo are struggling to increase sales too. Huawei is the only company growing in the Chinese market. 2019q1 data: https://www.canalys.com/newsroom/canalys-huawei-gains-record-34-of-chinas-declining-smartphone-market https://www.canalys.com/newsroom/canalys-huawei-gains-record...
      - caycep 7y ago
        How much to factor in official/unofficial state subsidies in Huawei financial performance?
    - ancorevard 7y ago
jedberg 7y ago
Based on the after hours results, it looks like this might push them just over a market cap of 1 trillion again, which if I'm not mistaken would make them the only company currently over $1T. Edit: Apparently MSFT closed at exactly $1T today, so tomorrow shall be interesting.
- news_hacker 7y ago
  Microsoft is over $1T since a few days ago...
  - ojbyrne 7y ago
    Microsoft didn’t actually close at $1 T until today.
- Analemma_ 7y ago
  MSFT closed at exactly 1T to two decimal places today, and is up slightly in after-hours trading, but this would be the first time we’ve had two 1T companies at the same time.
  - bgdnyxbjx 7y ago
    After all these years, it’s still Apple and Microsoft at the top. Crazy.
naaaaak 7y ago
Macs brought in more money than iPads. Despite being neglected, sold with defective keyboards, and macOS being maintained with a skeleton crew for years. “The iPad is the clearest expression of our vision of the future of personal computing.” — Tim Cuck The Mac is still stronger despite Apple's constant neglect and self-sabotage. Mac, not iPad, is the future of personal computing. That iOS becomes more and more macOS-like proves it.
FPGAhacker 7y ago
Share repurchasing of that magnitude doesn't seem like a good sign to me. I am interpreting that as meaning they could not find anything better to do with that money. If they were problem free and executing perfectly, maybe that would make sense. But that's hardly the case.
- kitotik 7y ago
  This is not a new strategy[0] for Apple or in general. “That is a reduction of 21 percent in shares outstanding since 2013. What’s that mean? It means all other things being equal, the company’s earnings per share are 21 percent higher than they would have been had it not done the buybacks.“ [0] https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-monster.html https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-mon...
gigatexal 7y ago
They’re fine. But stock buybacks and dividends are a waste. I’d rather that money (I’m a shareholder with not enough shares to matter but oh well) be used to purchase companies like a Netflix (too late now of course) or a Disney (also too late) or making bigger purchases to control more of their supply chain like buying a Qualcomm or increase the R&D budget by double maybe. 75B in buybacks just juices the EPS numbers. It’s the exact same BS that IBM has been doing to keep wall street happy. And it seems very un-Apple. I’d rather Apple take a more cold stance toward shareholders like Steve did and just act like the company was constantly in the verge of failing and keep making bigger bets (having huge piles of cash helps with that and they still do it just I don’t care about a dividend! Find me the next thing better than an iPhone)
- __blockcipher__ 7y ago
  I disagree. Apple is a very capital efficient company and already spends a tremendous amount on R&D. Just like the concept of the mythical man-month, the marginal utility of investing additional money in r&d goes down as r&d spend goes up. Or to put it a simpler way, Apple is running out of effective avenues to invest their money. The correct move in that situation is to return the capital to shareholders, and stock buybacks are the most tax-efficient way to do so, with the added benefit that if the stock is undervalued (and Apple's certainly has been in the last few years relative to free cash flow), then the shareholders get an "extra" return on top of that. Don't get me wrong, Apple should absolutely invest in R&D...which they do. They're not pinching pennies, except in situations like the keyboard fiasco, not including adapters etc - but that's a separate issue. Absolutely the worst thing they could do is just go acquiring companies that don't actually fit with their business model. Remember that it takes human effort (meaning cognitive expenditure) to run a business, and getting side-tracked with non-critical businesses is absolutely antithetical to that. If/when Apple does find a company that has something unique for their situation, then they do acquire them.
  - gigatexal 7y ago
    I will concede the point on the tax efficency of stock buy backs. But where I find we are in disagreement is in the purchasing of companies. An apple with Netflix and Disney would make Apple TV+ a whole lot better out of the gate than otherwise. Netflix has proven it can do original content and Disney's back catalog (now that they've bought Fox) is too big to laugh at. Owning Qualcomm would be immediately accretive to EPS given how important they are to the industry and would ensure that any modem needing components would be easily sourced. And you're right about the keyboard fiasco, what the heck went wrong there? In any case I am still very bullish overall on Apple and I can't wait for ARM based Macs.
toxictroller 7y ago
They should buy Tesla, could be too late now though.

119 points by css 7y ago

deleted 7y ago

[deleted]

"Apple no longer reports iPhone, iPad, and Mac unit sales numbers..." Probably because they only care about revenue and profits these days, not innovation and products. Apple didn't get to where they are by optimizing the supply chain but by coming up with incredible products that everyone HAD to have. I bought an iPhone last spring because it was the least-bad option in my opinion; if the Librem 5 is a flop I don't know what I'll get when my current phone dies because I will NOT buy a phone that unlocks by FaceID.

jjtheblunt 7y ago
You can turn FaceID off.
- r00fus 7y ago
  TouchID still has less lag - and I can auth/unlock from my pocket. FaceID is great for my aging parents who have calloused hands, but I still prefer TouchID.
  - mixmastamyk 7y ago
    Can ya still turn TouchID off? (haha)
    - saagarjha 7y ago
      You can not register any fingerprints, yes.
  - zaroth 7y ago
    I much prefer FaceID. It seems faster not slower for me than TouchID was, I like that it enables a full frontal screen, and I love not having a home button. I also really like when my kids steal my phone and try to get it to unlock by holding it up to me and I can make funny faces at it so it won’t. But maybe that’s just me. And to anticipate the follow-on to that, if a true adversary is holding my phone and it hasn’t been hard-locked through power-off of rapid click sequence, then I’ve already lost, whether it’s TouchID or FaceID.
    - mft_ 7y ago
      I find FaceID worse than TouchID, in a couple of ways: 1. It's very common both at work and at home that the iPhone is flat on a table and I want to quickly unlock it to check something. Previously, snaking a finger out was sufficient; now, I have to deliberately pick it up, look at it, and then swipe upwards. (It's also much more conspicuous in meetings.) 2. FaceID seems to struggle (i.e. fail to unlock, or delay the unlock) more often than TouchID - it seems quite sensitive to the angle it's held at as it scans my face.
      - bcatanzaro 7y ago
        Another problem is that you don't get to control the start of a FaceID scan. Many apps that I use (mostly for banking) have some non-deterministic loading procedure that can take from 1-20 seconds. At some point, the load completes and the app initiates a FaceID scan. If you're not holding the phone at the right angle at that moment, the scan fails. Then it falls back to a passcode. It's a terrible user experience. They should give me the chance to push a button after I've gotten the phone in the right position before initiating the scan. Or they should give me the chance to retry the scan if I wasn't ready. As it is, they expect me to hold my phone rigidly for a non-deterministic amount of time in order to use FaceID.
        macintux 7y ago
        Interesting point. Definitely worth noting that’s the apps’ fault: my primary banking app waits for me to trigger FaceID.
  - jen20 7y ago
    Out of interest do you live somewhere which is never cold enough to require gloves?
oflannabhra 7y ago
They actually state why they don't report unit sales numbers: they aren't meaningful now that the iPhone is no longer opening in new markets, the mobile phone market has reached maturity, and the number that is meaningful for their business growth is active devices. I'm not going to defend Apple's reasons for crafting their message to Wall Street, but to say that they only care about revenue and profits, but not innovation or products, just doesn't follow from sales number reporting (or from their other actions, in my opinion).
baoha 7y ago
Can we just stop with the 'Apple stopped innovating' propaganda, the same thing can be said about any big corps, be it Google/FB/Netflix/... Innovation doesn't just mean creating new products (the Airpod is one of Apple's killer product by the way), improving current products used by millions of people while keeping them coming back to buy more and more is not easy, this is also counted as innovation in my book.
ancorevard 7y ago
Because the number is the wrong metric for measuring the health of their products and customers. Unfortunately, the financial analysts have been so intensely focused on unit metrics to the point that they can't seem to grasp the true reality and condition of the company. As a result, Apple had to go so far as to: 1) State that their goal is to make their devices last longer. 2) Stop giving unit numbers. Still, I anticipate it will take years before financial analysts to internalize the true nature of this beast. See: http://www.asymco.com/2018/09/13/lasts-longer/ http://www.asymco.com/2018/09/13/lasts-longer/
- saagarjha 7y ago
  Any company that publicly claimed that their goal was to make devices that have a shorter lifetime would be raked over the coals, FWIW.
- eertami 7y ago
  >1) State that their goal is to make their devices last longer. Either a lie or they don't know what the word 'goal' means after shipping their devices with high failure rate keyboards?
scarface74 7y ago
Well, seeing that their Apple Watch business is the size of a F200 company. I think they are doing well. Also, if you compare their revenue mix and knowing Apple you know they are running each part profitably, they are doing much better than Google who after all of these years is still just an ad company. https://sixcolors.com/images/content/2019/financials-2019-4-3-1.png https://sixcolors.com/images/content/2019/financials-2019-4-...
rkho 7y ago
> Apple didn't get to where they are by optimizing the supply chain but by coming up with incredible products that everyone HAD to have Apple's supply chain used to have some really bad inventory turnover numbers. Unsold inventory would literally sit in warehouses depreciating in value, costing the company lots of money. You might be interested in reading this piece on Tim Cook's changes to the supply chain: https://money.cnn.com/2008/11/09/technology/cook_apple.fortune/index.htm https://money.cnn.com/2008/11/09/technology/cook_apple.fortu... It's either misguided or completely dishonest for you to assert that Apple's supply chain management plays second fiddle to its products when it comes to their success as a company.
georgespencer 7y ago
> Probably because they only care about revenue and profits these days, not innovation and products Apple seems, to me at least, to have more conviction that innovation and fantastic products lead to revenue and profits than any company operating in the consumer hardware space today. And there are plenty of comparatively awesome companies who innovate and invest in breakthrough products (Google, Tesla… Microsoft(!)). They likely no longer split out those product categories for several reasons: 1. Their financial results are news in the mainstream media, and their customers read the mainstream media. If the ASP of an iPhone rises to $1,000 and grows revenue whilst offsetting a contraction in unit sales, it's great news for Apple and its investors, and likely not a sign of anything other than a maturing market -- but it won't be reported as anything other than stagnation or doom and gloom by the mainstream media. 2. Apple's future, and maybe the future, is not in one-off transactions. We've seen most professional and a lot of consumer software move towards subscription pricing steadily over the last decade. Hardware is going to go the same way, and Apple is preparing for that. Persuading people to stay in their ecosystem (NB not "locking people in" -- it's pretty easy to "leave" the Apple ecosystem) is going to be a combination of hardware, software, and services, and customers will be paying some sort of blended subscription which includes hardware and software. It's predictable, steady revenue for them, and it obviates the need for stupid "how many units did you ship hurr durr" conversations.
deleted 7y ago
[deleted]

r00fus 7y ago

AAPL up by 10pts (~5%) afterhours as of this comment timestamp. Is this purely due to the dividend announcement?

vesrah 7y ago
Partially, along with beating expected EPS by $0.09 and expected revenue by 400MM.
teej 7y ago
EPS beat estimates by 4%, $2.46 vs $2.36.
thtthings 7y ago
Dividend announcement doesn't make stocks go up. They actually go down by the amount of dividend.
- robryan 7y ago
  After the dividend record date, before it they do go up by a similar amount to the dividend of it wasn’t already priced in at all.
- deleted 7y ago
  [deleted]
Bahamut 7y ago
I wonder if stock buybacks is part of it.

minimaxir 7y ago

From the financial statements, revenue from Wearables, Home, and Accessories was up 30% vs the last year. There wasn't a huge release this quarter (aside from the AirPods refresh which was at the edge of the March 30th cutoff), so I wonder why it went up so much.

Despegar 7y ago
Watch and AirPods are early in the S curve of adoption and have clear product market fit and no viable competitors. It's clearly inflecting higher.
- Godel_unicode 7y ago
  AirPods have plenty of viable competitors. They also sound bad, and aren't water-resistant to speak of. Their main competitive advantage is they come in Apple white and are conspicuous enough that people see them. Add in that they were near the end of the release cycle and it's definitely weird how much they went up.
  - __blockcipher__ 7y ago
    I think this is a totally naive viewpoint. Despite the memes, Airpods aren't just a mere status symbol (and as status symbols they are very poor ones, which I think is the whole joke about airpods => rich). What makes them incredible is their seamlessness. They do have occasional bluetooth fuckery but they felt like the first wireless earbuds that just worked^TM.
    - Godel_unicode 7y ago
      This is a very common take from people who have never used Bluetooth headphones before. I've had several sets of Bluetooth headphones and earbuds in the past, and they've been the same type of "just works" experience for me. Except better sound quality, and frequently water resistant. If you like the AirPods then that's great for you, but stop pretending they're some fantastic innovation over what came before, or that they've kept up with what's come out since.

joobus 7y ago

> The Company posted quarterly revenue of $58 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10 percent. So they are shrinking, not growing.

ancorevard 7y ago
Remove China from their numbers, and they are growing. China's economy is still cratering.
- mtw 7y ago
  It's more like Huawei and Oppo are winning vs Apple https://www.cnn.com/2019/02/14/tech/huawei-smartphones-china/index.html https://www.cnn.com/2019/02/14/tech/huawei-smartphones-china...
  - rgbrenner 7y ago
    "Demand for the Chinese tech company's [Huawei] devices is red hot even though the country's overall market for smartphones is shrinking." That's the second sentence in your link. And it says Oppo grew at 1.1% (in 2018q4)-- that's not exactly winning. Xiaomi plummeted 28%, even more than apple. There's clearly more going on than a simple competition between apple and Huawei. https://www.engadget.com/2019/03/13/smartphone-sales-china-plummet/ https://www.engadget.com/2019/03/13/smartphone-sales-china-p... More recent data shows Oppo and Vivo are struggling to increase sales too. Huawei is the only company growing in the Chinese market. 2019q1 data: https://www.canalys.com/newsroom/canalys-huawei-gains-record-34-of-chinas-declining-smartphone-market https://www.canalys.com/newsroom/canalys-huawei-gains-record...
    - caycep 7y ago
      How much to factor in official/unofficial state subsidies in Huawei financial performance?
  - ancorevard 7y ago

jedberg 7y ago

Based on the after hours results, it looks like this might push them just over a market cap of 1 trillion again, which if I'm not mistaken would make them the only company currently over $1T. Edit: Apparently MSFT closed at exactly $1T today, so tomorrow shall be interesting.

news_hacker 7y ago
Microsoft is over $1T since a few days ago...
- ojbyrne 7y ago
  Microsoft didn’t actually close at $1 T until today.
Analemma_ 7y ago
MSFT closed at exactly 1T to two decimal places today, and is up slightly in after-hours trading, but this would be the first time we’ve had two 1T companies at the same time.
- bgdnyxbjx 7y ago
  After all these years, it’s still Apple and Microsoft at the top. Crazy.

naaaaak 7y ago

Macs brought in more money than iPads. Despite being neglected, sold with defective keyboards, and macOS being maintained with a skeleton crew for years. “The iPad is the clearest expression of our vision of the future of personal computing.” — Tim Cuck The Mac is still stronger despite Apple's constant neglect and self-sabotage. Mac, not iPad, is the future of personal computing. That iOS becomes more and more macOS-like proves it.

FPGAhacker 7y ago

Share repurchasing of that magnitude doesn't seem like a good sign to me. I am interpreting that as meaning they could not find anything better to do with that money. If they were problem free and executing perfectly, maybe that would make sense. But that's hardly the case.

kitotik 7y ago
This is not a new strategy[0] for Apple or in general. “That is a reduction of 21 percent in shares outstanding since 2013. What’s that mean? It means all other things being equal, the company’s earnings per share are 21 percent higher than they would have been had it not done the buybacks.“ [0] https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-monster.html https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-mon...

gigatexal 7y ago

They’re fine. But stock buybacks and dividends are a waste. I’d rather that money (I’m a shareholder with not enough shares to matter but oh well) be used to purchase companies like a Netflix (too late now of course) or a Disney (also too late) or making bigger purchases to control more of their supply chain like buying a Qualcomm or increase the R&D budget by double maybe. 75B in buybacks just juices the EPS numbers. It’s the exact same BS that IBM has been doing to keep wall street happy. And it seems very un-Apple. I’d rather Apple take a more cold stance toward shareholders like Steve did and just act like the company was constantly in the verge of failing and keep making bigger bets (having huge piles of cash helps with that and they still do it just I don’t care about a dividend! Find me the next thing better than an iPhone)

__blockcipher__ 7y ago
I disagree. Apple is a very capital efficient company and already spends a tremendous amount on R&D. Just like the concept of the mythical man-month, the marginal utility of investing additional money in r&d goes down as r&d spend goes up. Or to put it a simpler way, Apple is running out of effective avenues to invest their money. The correct move in that situation is to return the capital to shareholders, and stock buybacks are the most tax-efficient way to do so, with the added benefit that if the stock is undervalued (and Apple's certainly has been in the last few years relative to free cash flow), then the shareholders get an "extra" return on top of that. Don't get me wrong, Apple should absolutely invest in R&D...which they do. They're not pinching pennies, except in situations like the keyboard fiasco, not including adapters etc - but that's a separate issue. Absolutely the worst thing they could do is just go acquiring companies that don't actually fit with their business model. Remember that it takes human effort (meaning cognitive expenditure) to run a business, and getting side-tracked with non-critical businesses is absolutely antithetical to that. If/when Apple does find a company that has something unique for their situation, then they do acquire them.
- gigatexal 7y ago
  I will concede the point on the tax efficency of stock buy backs. But where I find we are in disagreement is in the purchasing of companies. An apple with Netflix and Disney would make Apple TV+ a whole lot better out of the gate than otherwise. Netflix has proven it can do original content and Disney's back catalog (now that they've bought Fox) is too big to laugh at. Owning Qualcomm would be immediately accretive to EPS given how important they are to the industry and would ensure that any modem needing components would be easily sourced. And you're right about the keyboard fiasco, what the heck went wrong there? In any case I am still very bullish overall on Apple and I can't wait for ARM based Macs.

toxictroller 7y ago

They should buy Tesla, could be too late now though.