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> 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

by 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
    True, local Chinese Android phones are increasing their market share in China, while foreign phones like Samsung and Apple etc. are shrinking. However, the overall smartphone market is shrinking in China. The economy there is not doing well.
- saagarjha 7y ago
  Removing China for a company that depends strongly on sales in China may not be a very sound analysis.
  - ancorevard 7y ago
    If you want to find root cause, you need to dissect that one number. Without breaking out China vs non-China you would have concluded that Apple is slowing down/customers unhappy/products unattractive. This would have been the wrong conclusion for the non-China world. You don't treat the world as one unified market.
  - bunnycorn 7y ago
    Where does Apple "depends strongly" in China. Sure is important for the iPhone, but it's not important for the iPad, Mac and Services.
    - saagarjha 7y ago
      Apple depends strongly on iPhone.
      - scarface74 7y ago
        And that's why they are trying to diversify revenue...
      - bunnycorn 7y ago
        After a 30% drop in units sold (Independent data from IDC 1), Apple revenue was only hit by 5% in revenue 2. 1 https://www.macrumors.com/2019/04/30/apple-36-million-iphones-shipped-q1-2019/ https://www.macrumors.com/2019/04/30/apple-36-million-iphone... 2 https://www.apple.com/newsroom/2019/04/apple-reports-second-quarter-results/ https://www.apple.com/newsroom/2019/04/apple-reports-second-...
  - toasterlovin 7y ago
    Yeah, but "sales are down because the 2nd largest economy in the world is tanking" is very different from "sales are down across the board because people don't want to buy our products as much".
- hangonhn 7y ago
  Uh... have you checked the news lately? https://www.wsj.com/articles/china-growth-beats-expectations-thanks-to-humming-factories-11555469337 https://www.wsj.com/articles/china-growth-beats-expectations... "China’s economic growth held to a 6.4% rate in the first three months of the year as factory production picked up significantly amid signs authorities worked forcefully to stabilize business following months of weakness." If Apple isn't doing well in China it isn't because of the economy.
  - RcouF1uZ4gsC 7y ago
    > amid signs authorities worked forcefully to stabilize business The concern with China is that they might work so forcefully to stabilize business that people report numbers that look good even if they are not entirely true.
  - deleted 7y ago
    [deleted]
  - tonyedgecombe 7y ago
    Nobody believes the official figures coming out of China.
- MuffinFlavored 7y ago
  > China's economy is still cratering. What's it going to take for China to not crater and how far out is that horizon?
  - adventured 7y ago
    They have to accept a more normalized - ie slow - rate of economic growth. They have to switch from the non-stop stimulus & extreme debt based approach, to allowing organic growth to mostly take over. They've been riding an unsustainable approach since the great recession mess tanked the global consumer. Simply put, they have to switch to a sustainable model for their economy. It's a painful process, made worse by the choices of delay that they've previously made. It's also not uncommon. The US nearly got thrown into a depression by the stupidity of the Fed trying to avoid a recession after 9/11 and the stock market crash post dotcom bubble. You can try to dodge reality, usually though it'll just compound the painful price you pay later. In China's case, the potential price is best represented by what has happened to Japan through their previous attempts to dodge economic reality (via debt, keeping zombie corporations alive, etc). China's organic rate of growth would be very low (for them, versus the recent past). Strip out the fake numbers, then reduce the stimulus efforts to mostly emergency circumstances, and you'd see something more typical like 2% to 3% GDP growth. That's obviously unacceptable to the government authorities. The Chinese Government is trying to both delay and buffer that process, of dropping from the previously fast rates of growth to the rates you see in more developed nations. I think they fully understand it's inevitable. They want to minimize the social disharmony of it, for the purpose of retaining their power. The fear of revolution is always present. They're trading future stagnation for present buffering of the downside to dropping rapidly from high growth to slow growth (they'll worry about the consequences of that trade later). China faces the not enviable situation of ending up with a mature, slow growth economy, while still having hundreds of millions of people in near third world poverty. I think that's impossible for them to avoid given the scale of their population, the present phase that it's in in terms of transition, and typical rates of more normal organic economic expansion (whether domestically or in the global economy). How do you explain to 500 million extremely poor people that the best days of growth are permanently over and they'll never get to become well-off like the lucky ~10% that were in the right places in eastern China 20-30 years ago and got to ride the easy boom? To maintain that fantasy (that everyone will get to participate, even though the party is already over), you need to project extremely high rates of growth. Traditional service economies with their far slower growth can never deliver on that.
- ksec 7y ago
  >China's economy is still cratering. Except Huawei manage a 30%+ growth in its own region.
hbcondo714 7y ago
Source: https://www.sec.gov/Archives/edgar/data/320193/000032019319000063/a8-kexhibit991q220193302019.htm https://www.sec.gov/Archives/edgar/data/320193/0000320193190...
mythz 7y ago
On 1 quarter YoY basis, their core iPhone business saw a plateau slowdown of -17.3% ($31B). iPad saw 21.5% growth ($4.9B) and their newest categories Wearables (Watch/Airpods) saw a 30% jump ($5.13B) whilst their Service Revenue increased 16.2% ($11.45B). Despite their Apple News+, Apple Card, Apple Arcade and Apple TV+ services/subscription revenues not having kicked in yet so I'd expect they'll return to overall revenue/profit growth next year when all their revenue centers are operating on full cylinders.
- bunnycorn 7y ago
  It also depends on China/US relations.
- dmix 7y ago
  > Wearables (Watch/Airpods) saw a 30% jump ($5.13B) They generate $5 billion in revenue on their Watches and Airpods alone? What a crazy good business they have.
  - vbezhenar 7y ago
    I think it's sales. So their watches sell almost like macs. No wonder they don't really care about computers. No growth potential for computers, but very few people bought watches, so much more potential to grow.
    - brlewis 7y ago
      We don't know how well their watches sell. The headphones+watches number is surely dominated by headphones.
      - kylecazar 7y ago
        I can only support your comment anecdotally (perhaps actual figures have been published somewhere), but the majority of my circle has purchased airpods. They're the only Apple product I love. I don't know any current watch wearers, although many purchased one when initially released.
amelius 7y ago
Just wait until they replace credit cards.
- what_ever 7y ago
  I don't think that will happen. And I hope I hope it doesn't happen as I don't have an iPhone.
coldtea 7y ago
Yeah, they are doomed.
__blockcipher__ 7y ago
But their EPS is still doing great to do well-executed share repurchases (stock buybacks). They've been diversifying their revenue/profit stream with their services push for quite some time now, and continue to do so.

by joobus 7y ago

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
  True, local Chinese Android phones are increasing their market share in China, while foreign phones like Samsung and Apple etc. are shrinking. However, the overall smartphone market is shrinking in China. The economy there is not doing well.
saagarjha 7y ago
Removing China for a company that depends strongly on sales in China may not be a very sound analysis.
- ancorevard 7y ago
  If you want to find root cause, you need to dissect that one number. Without breaking out China vs non-China you would have concluded that Apple is slowing down/customers unhappy/products unattractive. This would have been the wrong conclusion for the non-China world. You don't treat the world as one unified market.
- bunnycorn 7y ago
  Where does Apple "depends strongly" in China. Sure is important for the iPhone, but it's not important for the iPad, Mac and Services.
  - saagarjha 7y ago
    Apple depends strongly on iPhone.
    - scarface74 7y ago
      And that's why they are trying to diversify revenue...
    - bunnycorn 7y ago
      After a 30% drop in units sold (Independent data from IDC 1), Apple revenue was only hit by 5% in revenue 2. 1 https://www.macrumors.com/2019/04/30/apple-36-million-iphones-shipped-q1-2019/ https://www.macrumors.com/2019/04/30/apple-36-million-iphone... 2 https://www.apple.com/newsroom/2019/04/apple-reports-second-quarter-results/ https://www.apple.com/newsroom/2019/04/apple-reports-second-...
- toasterlovin 7y ago
  Yeah, but "sales are down because the 2nd largest economy in the world is tanking" is very different from "sales are down across the board because people don't want to buy our products as much".
hangonhn 7y ago
Uh... have you checked the news lately? https://www.wsj.com/articles/china-growth-beats-expectations-thanks-to-humming-factories-11555469337 https://www.wsj.com/articles/china-growth-beats-expectations... "China’s economic growth held to a 6.4% rate in the first three months of the year as factory production picked up significantly amid signs authorities worked forcefully to stabilize business following months of weakness." If Apple isn't doing well in China it isn't because of the economy.
- RcouF1uZ4gsC 7y ago
  > amid signs authorities worked forcefully to stabilize business The concern with China is that they might work so forcefully to stabilize business that people report numbers that look good even if they are not entirely true.
- deleted 7y ago
  [deleted]
- tonyedgecombe 7y ago
  Nobody believes the official figures coming out of China.
MuffinFlavored 7y ago
> China's economy is still cratering. What's it going to take for China to not crater and how far out is that horizon?
- adventured 7y ago
  They have to accept a more normalized - ie slow - rate of economic growth. They have to switch from the non-stop stimulus & extreme debt based approach, to allowing organic growth to mostly take over. They've been riding an unsustainable approach since the great recession mess tanked the global consumer. Simply put, they have to switch to a sustainable model for their economy. It's a painful process, made worse by the choices of delay that they've previously made. It's also not uncommon. The US nearly got thrown into a depression by the stupidity of the Fed trying to avoid a recession after 9/11 and the stock market crash post dotcom bubble. You can try to dodge reality, usually though it'll just compound the painful price you pay later. In China's case, the potential price is best represented by what has happened to Japan through their previous attempts to dodge economic reality (via debt, keeping zombie corporations alive, etc). China's organic rate of growth would be very low (for them, versus the recent past). Strip out the fake numbers, then reduce the stimulus efforts to mostly emergency circumstances, and you'd see something more typical like 2% to 3% GDP growth. That's obviously unacceptable to the government authorities. The Chinese Government is trying to both delay and buffer that process, of dropping from the previously fast rates of growth to the rates you see in more developed nations. I think they fully understand it's inevitable. They want to minimize the social disharmony of it, for the purpose of retaining their power. The fear of revolution is always present. They're trading future stagnation for present buffering of the downside to dropping rapidly from high growth to slow growth (they'll worry about the consequences of that trade later). China faces the not enviable situation of ending up with a mature, slow growth economy, while still having hundreds of millions of people in near third world poverty. I think that's impossible for them to avoid given the scale of their population, the present phase that it's in in terms of transition, and typical rates of more normal organic economic expansion (whether domestically or in the global economy). How do you explain to 500 million extremely poor people that the best days of growth are permanently over and they'll never get to become well-off like the lucky ~10% that were in the right places in eastern China 20-30 years ago and got to ride the easy boom? To maintain that fantasy (that everyone will get to participate, even though the party is already over), you need to project extremely high rates of growth. Traditional service economies with their far slower growth can never deliver on that.
ksec 7y ago
>China's economy is still cratering. Except Huawei manage a 30%+ growth in its own region.

hbcondo714 7y ago

Source: https://www.sec.gov/Archives/edgar/data/320193/000032019319000063/a8-kexhibit991q220193302019.htm https://www.sec.gov/Archives/edgar/data/320193/0000320193190...

mythz 7y ago

On 1 quarter YoY basis, their core iPhone business saw a plateau slowdown of -17.3% ($31B). iPad saw 21.5% growth ($4.9B) and their newest categories Wearables (Watch/Airpods) saw a 30% jump ($5.13B) whilst their Service Revenue increased 16.2% ($11.45B). Despite their Apple News+, Apple Card, Apple Arcade and Apple TV+ services/subscription revenues not having kicked in yet so I'd expect they'll return to overall revenue/profit growth next year when all their revenue centers are operating on full cylinders.

bunnycorn 7y ago
It also depends on China/US relations.
dmix 7y ago
> Wearables (Watch/Airpods) saw a 30% jump ($5.13B) They generate $5 billion in revenue on their Watches and Airpods alone? What a crazy good business they have.
- vbezhenar 7y ago
  I think it's sales. So their watches sell almost like macs. No wonder they don't really care about computers. No growth potential for computers, but very few people bought watches, so much more potential to grow.
  - brlewis 7y ago
    We don't know how well their watches sell. The headphones+watches number is surely dominated by headphones.
    - kylecazar 7y ago
      I can only support your comment anecdotally (perhaps actual figures have been published somewhere), but the majority of my circle has purchased airpods. They're the only Apple product I love. I don't know any current watch wearers, although many purchased one when initially released.

amelius 7y ago

Just wait until they replace credit cards.

what_ever 7y ago
I don't think that will happen. And I hope I hope it doesn't happen as I don't have an iPhone.

coldtea 7y ago

Yeah, they are doomed.

__blockcipher__ 7y ago

But their EPS is still doing great to do well-executed share repurchases (stock buybacks). They've been diversifying their revenue/profit stream with their services push for quite some time now, and continue to do so.