16 ms·

Apple Reports Record First Quarter Results

286 points by chollida1 7y ago

chollida1 7y ago
Notes: - for first time seeing analysts excited about other products, watch and airpods as being real drivers of bottom line revenue!!! - interesting note from Bloomberg tech reporter "Apple’s new revenue strategy isn’t a bad one. It’s, basically, sell the customer an iPhone every three to five years, and make a bunch of money in the years between by selling them a new Apple Watch or AirPods (which only last about three years tops before you need a new pair -- batteries!) and services. If a user subscribes to all of Apple’s services for two years straight, that’s about equal to revenue from a new iPhone. So in those cases, if that user doesn’t buy a new iPhone for a couple years, it’s not a big deal." - apples done so well lately that the average analysts has a target price 5% below what apple is currently trading at - they manufacture iphones 400 km from the center of the coronavirus outbreak, see if this is mentioned, also about 18% of apple revenue so China matters - want to see what their effective tax rate is Numbers: - stocks almost back to record highs before reporting, after reporting it shot way past!! - 1Q Revenue is $91.8B vs estimates of $88.38B!!!!!! - 1Q EPS is $4.99 vs estimates of$4.56!!!!! - wearables was $10 vs $7.3 last year( apple just continues to create $10+ billion dollar business every 3-5 years. Use to be that only MSFT could do that and GOOG spent heavily trying to do that - iphone revenue for 1Q is $55.97 - service revenue for 1Q is $12.72 - declines in both mac($7.1 vs $7.4 last year) and iPad sales($6 vs %6.7 last year) - iphone sales up everywhere except Japan Numbers that really impress - Cash/Equivalents have doubled from last year, that funds a lot of money loosing streaming shows - keeping in mind they bought back $37B in stock this year - almost $100B in term debt Supply Chain: - Qurvo up 1% - Skyworks up 1% - Cirrus up 3%
- hindsightbias 7y ago
  Reality doesn’t matter, the naysayers will be dumping again on APPL very shortly. 33 Quarters since SJ died, it’s over!
- pbreit 7y ago
  "sell the customer an iPhone every three to five years" Aren't lots of people on monthly plans now with "free" annual upgrades?
  - __abc 7y ago
    I'm on this plan (the zero interest loan plan designed to drive an annual upgrade) and it isn't exactly free. The loan is absolutely zero interest, but I get ~$200 in fees when I upgrade from AT&T. It's enough where I didn't upgrade from the X to the 11. I have also since switched to Google Fi and don't know if that same fee exists with them ....
    - RandallBrown 7y ago
      What fees are you getting from AT&T? I've been a part of the iPhone upgrade plan since it started and haven't been charged any fees by AT&T.
      - jedieaston 7y ago
        He’s talking about the fees associated with AT&T’s lease plan, not Apple’s.
        yungstevejobs 7y ago
        No. AT&T started charging an upgrade fee, regardless if you went through a 3rd party or not. This started in 2018 iirc.
      - pastor_elm 7y ago
        line access and sim card fee?
    - enos_feedler 7y ago
      $200 sounds a bit insane. Is this across many devices on a multi-device shared plan? AT&T charges me $40-$50 each time I upgrade the device. Anything > $0 still seems silly, but $200!
- aguyfromnb 7y ago
  >1Q EPS is $4.99 vs estimates of$4.56!!!!! I'm constantly reading on HN about the deceiving nature of stock buybacks on earnings. Is this not an example? Net income was down year-over-year on "record" per share earnings.
  - cmdli 7y ago
    I wonder. If you're an investor, all you really care about is how much your shares are earning you. If the amount of earnings per share goes up, then the value of that share also goes up.
    - adventured 7y ago
      > all you really care about is how much your shares are earning you Properly you care about more than that: you want to know how the business is faring; the thing that actually has to support the EPS. You want to know that you're not watching a dwindling scenario, where you're losing the business and the buybacks are getting you just a bit more than treading water. That's where EPS juicing can be a dangerous camouflage. If juicing EPS with buybacks comes at the cost of longer term growth, it's a disaster for long-term shareholding. Incorrect capital allocation sinks a lot of ships. IBM, as one infamous example, played (is playing) an aggressive financial engineering game where they were seeing their business contract every quarter for years, yet juiced EPS through buybacks. It did absolutely nothing for the stock, which hasn't moved in ten years (Adobe is now worth more than IBM + the former Red Hat, ouch). All those profits shoveled into buybacks and it did nothing to drive consequential returns for shareholders. If shareholders are lucky they've yielded three or four percent per year the past decade, with inflation + buybacks + dividends (while a lot of other prominent tech companies have generated epic returns in that time). It could have gone into building a better cloud business which would have provided growth, which would have rewarded them with a PE ratio that isn't a dismal 13 (Apple has a multiple 2x that with very modest growth). In four or five years AWS will be as large as IBM's entire business (it's already nearly as profitable now). Shareholders have seen some EPS boost while the business gradually vanishes out from under them. Is it more likely that IBM's profits were better spent on buying shares back or driving business growth? You could have rolled up a massive cloud business for $50 billion in acquisitions between 2008-2018 (and ideally not stupidly paid twice what Red Hat was actually worth, near the peak of a stock market bubble).
- bamboozled 7y ago
  So great news for the environment and relatability. What a joke. Seems like Apple is making money from creating disposable rubbish and trashing the Earth. Maybe I’m wrong and they recycled all? I hope this is the case.
  - KarlKemp 7y ago
    Longer buying cycles on the phones would be quite beneficial. And Apple has quite a good track record on longevity compare to others, in notebooks for example. They also lead on recycling, and were among the first to reduce and eliminate a bunch of toxins from their processes, and to aggressively cut back on packaging. In perspective (to Elon Musk‘s products, for example) Airports are completely irrelevant, as long as they are not powered by enriched uranium: they are just too small.
    - bamboozled 7y ago
      Yes but it sounds like their strategy is changing to having things which are disposable in the middle of these cycles to make extra revenue. That's the uncool part.
    - Polylactic_acid 7y ago
      Apples Macbooks are the leading the way for creating mountains of needless waste. We had multiple sent back because of their horrible keyboards failing repeatedly. And unlike on other brands where you could pop off a key and remove the whole keyboard without any tools, Macbooks have the keyboard secured with about 90 rivets so unless you want to spend hours and hours plucking out rivets and then threading the holes, the entire bottom case becomes useless which has glued to it the trackpad, speakers and battery. How environmentally friendly! Recycling is a corporate greenwashing tactic to make it seem like you can buy endless product and do the planet a favor because someone in china burned off all the non metals and grabbed the remaining aluminum.
      - aloer 7y ago
        Don’t you think Apple will recycle every MacBook top case that is sent back? Whether as refurbished or in material, either way it’s probably very efficient or they would lose so much more on all these free repairs
- deleted 7y ago
  [deleted]
- mtgx 7y ago
  > which only last about three years tops before you need a new pair -- batteries!which only last about three years tops before you need a new pair -- batteries! Needing a new battery should be the absolute LAST reason you would want to replace your electronic device, not only in the sense that the customer is getting screwed this way through planned obsolescence, but also because this only makes the problem of electronic waste so much worse. You should be able to replace the battery in your phone, watch, remote, electric car, and really every single device. I don't care said device would be slightly thicker because of it, the companies will innovate around that eventually. It's far from a good enough reason to create devices without replaceable batteries. I find this to be one of the most anti-consumer features a company can add to their products.
- ksec 7y ago
  A lot of these were expected? Still good to see it now as fact. I have jokingly made the prediction on in 2016 that Apple will reach 1B iPhone User by 2020, turns out we are very close judging from the 1.5B Active Base. iPhone in Japan - For those not aware iPhone has 80%+ Market Share in Japan ( Usage, not Sales ). And majority of iPhone user prefer smaller handset, that is the iPhone 4.7" or smaller like the iPhone SE size. So Apple hasn't really had any update for that market in 2019. Another point was Japan has passed a law that ban the subsidise phone selling with carriers. Making the cost of iPhone higher. Face ID is also not as well liked comparatively speaking, so replacement cycle are longer. But Mac not so Good. I only posted this yesterday[1]. Basically more Mac users are leaving the platform. The Churn rate is possibly the highest in the past 10 years. I am not sure if this is because casual users are generally leaving the PC platform as a whole, or they are leaving to Windows or Linux. [1] https://news.ycombinator.com/item?id=22170080 https://news.ycombinator.com/item?id=22170080
OrangeMango 7y ago
Mac sales drop is fair small - 3% or so. The iPad saw a drop of 12% or so. Fairly significant.
- thetinguy 7y ago
  No new iPad Pro in 2019
  - OrangeMango 7y ago
    You are probably right. The thing is, if Apple wants to drive more iPad sales, they really need to open up what it is allowed to do. iPads from 5+ years ago are still great for almost anything but the most intense games. I have the 9.7" iPad Pro, which is something like 3 years old by now. I have no reason to upgrade. Swift Playgrounds is a great app and has a built-in compiler. It's very nearly an IDE at this point. On my iPad, it compiles slowly and really eats the battery. But I don't really care; it's just a toy app. If Apple were to allow things compiled in Swift Playgrounds to be run, say, via the Shortcuts app (in any shortcut I created), I'd be excited to start really developing code on the iPad, and I'd want to buy a new iPad to enable that.
    - scarface74 7y ago
      And this is why techno-geeks don't get Apple. Apple "opening up" the iPad by allowing people to compile code, wouldn't even move the needle.
      - IggleSniggle 7y ago
        It might. I'd argue that the original success of iPhone is very symbiotic with the developer community it grabbed. There was a latent hunger from software creators to make mobile software, but no decent platform to develop for. Making techno-geeks happy can move the needle for the whole ecosystem (it can also be a huge waste of time, depending on what you hope to achieve...Oculus is a great example of the masses not following the energy despite massive excitement and development efforts by techno-geeks).
jandrewrogers 7y ago
The astounding thing about Apple is not the scale at which they operate, though that is impressive. It is the rate at which they still grow revenue concurrent with insane profitability and revenue diversification at that scale. Incredible business execution. Their slow creep into healthcare is a particularly interesting longterm play, due to the size of the market if nothing else.
- ardit33 7y ago
  I was playing indoor soccer, and I noticed one of the opposing players had an apple watch on. I wanted to complain the ref about it (jewelry and wearables are not allowed during games), but then I realized that at least 1/3rd of the players had some kind of watch (including my teammates). You didn't see them during games a couple of years ago... so I guess they opened a new market and people are used to them.
  - ska 7y ago
    fitness monitors have really started to shift this, I think.
  - outoftheabyss 7y ago
    You have a ref for indoor soccer? And rules on what you can wear? Indoor soccer to me was always just a casual affair, besides the odd tasty tackle and fall out
    - emiliobumachar 7y ago
      There are professionals, championships and all.
    - gramakri 7y ago
      it's called futsol
    - stevehawk 7y ago
      A lot of educational leagues have refs and rules on attire. For instance, every rec basketball league I've ever been in banned shorts with pockets because of the risk of defenders snagging/dislocating/breaking fingers and had rules on finger nail length to reduce incidental scratches.
onetimemanytime 7y ago
Wow! AAPL has been buried so many times, only to surprise people. $91,000,000,000 in sales over 3 months, we're almost talking about real money :)
keyle 7y ago
I'm happy for apple, but I'm annoyed at 'service' growing. The free plan offering hasn't increased as far as I know, and the devices require more and more icloud backup space, so why would you be surprised in an increase of 'service' revenues?
- reaperducer 7y ago
  The devices don't require any iCloud backup space. You are free to back up your device on your local machine. Or if you want to live dangerously, you don't have to turn on iCloud backups at all. In fact, you don't have to turn on iCloud, period.
  - dangero 7y ago
    They are blocking competition in backups and cloud storage using private apis that would bring the cost down.
    - reaperducer 7y ago
      They're blocking competition by allowing you to back up to your own computer?
      - OldHand2018 7y ago
        The Files App on iOS can connect to any SMB share. Just make a shortcut that runs periodically: take everything in the "recent" folder, compress it, name it the current date, and copy it to a SMB share of your choice.
      - ReverseCold 7y ago
        iCloud backs up when you plug in your phone at night without any configuration. Requirements to back up to your own computer include... - Owning a computer - Plugging your phone into your computer - Having iTunes always running (if it's not a Mac) Additionally, Apple provides a very convenient API where you can store files and have it show up on related devices after calling a sync function. Many apps which store user data use this, and it requires iCloud if you want to sync between Mac and iOS or iOS to iOS. It's a very common pattern, some popular apps that use it: GoodNotes, Studies, Notability, WhatsApp, Linea, and every Apple-made app.
40acres 7y ago
Apple finally decided to start capturing some of the value add of the iPhone itself (App store fees are solid revenue I suppose but a tiny fraction of the overall potential value of an iPhone) and now somehow an unstoppable force has gotten even more successful. I don't think I've ever seen such a tentpole product. No doubt in my mind that Apple will be the one takes AR and possibly VR to the next level.
- scrumbledober 7y ago
  Are they currently working on VR?
  - dplgk 7y ago
    Yes
- WalterBright 7y ago
  > I don't think I've ever seen such a tentpole product. Microsoft DOS and then Windows.
  - brantonb 7y ago
    The head of Windows and Office used to joke at the all hands meetings about making 120% of the company’s profits.
iknowalot 7y ago
They stopped publishing how many units of each model of iPhone they sell, that's a major investor red flag.
- cdolan 7y ago
  They stopped detailing their exact Mac and iPad sales too, so I dont see the problem. I realize iPhone is an amazing amount of their revenue, but they are transitioning to a services and accessory business built around iPhone. It’s less important exactly what model iPhone you have, in my opinion.
  - mrscottson 7y ago
    Well, they should let that (units sold) number decline on the public disclosures... Reducing investor visibility into a publicly traded company when numbers start turning negative is a huge flaming red flag.
    - scarface74 7y ago
      No company announces hardware sells volumes. Well, I think the console makers do.
      - mrscottson 7y ago
        Wrong, I followed Apple earnings reports for years, they always provided unit sold numbers. Post a link proving your false claim.
      - mrscottson 7y ago
        "AAPL will stop reporting unit sales for iPhone, iPad, and Mac beginning the December quarter..." Live blog: Apple’s fiscal Q4 2018 earnings call https://9to5mac.com/2018/11/01/aapl-live-blog-fy18-q4/ https://9to5mac.com/2018/11/01/aapl-live-blog-fy18-q4/
        scarface74 7y ago
InterestBazinga 7y ago
Tim Cook has added $1 trillion dollars to Apple's market cap since he took over. Apple's ability to sell a new IPhone every year is honestly the stuff of legends, it almost defies logic but they keep on executing it. It is a bit interesting to see misses from Macs, IPads and services. Which tells you Apple is still very much an iphone story.
- dillonmckay 7y ago
  If Macs could be financed and upgraded like phones, that would be interesting to see.
  - InterestBazinga 7y ago
    Isnt Apple financing available for Macs?
    - tmpz22 7y ago
      Yes. A lot of the diehards over at /r/apple let slip occasionally how they are always financing the latest and greatest. Which is absurd to me especially for the mac product lines where you are overpaying by thousands for an outdated machine [1]. And the estimate of 3 year lifecycle for wearables like the watch and airpods seems overly optimistic. My airpods are a year old and the battery dwindles in about an hour or two before needing charging, my watch is bricked after 7 months. When the current debt bubble pops it'll be interesting if it effects Apple revenue as hard as it will the college debt / car debt markets. [1]: https://www.youtube.com/watch?v=mIB389tqzCI https://www.youtube.com/watch?v=mIB389tqzCI
      - favorited 7y ago
        > watch is bricked after 7 months Don't they have a 1-year warrantee?
      - realdlee 7y ago
        I still have a series 0 Apple watch that works fine and is used everyday. How is your watch not working?
kotrunga 7y ago
Just a little sad to see how much value they put into the iPhone and services while iPad and Mac software is lacking. Obviously, they're making money, and that's their goal. However, I think sales could be boosted for the iPads and Macs if they increased the quality of the software for those devices. Great example explanation within here: https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_10 https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_...
- mooreds 7y ago
  Do you think it'd make sense to spin off the mac business, or is it too integrated (with the app store)?
  - threeseed 7y ago
    It's integrated with everything e.g. Airdrop, Continuity, Handoff, iCloud Drive/Sync, Messages, Sidecar etc. And clearly the investment with Catalyst means they see the future as unified iOS/OSX apps.
    - ethbro 7y ago
      At minimum, it's integrated in the GM sense. In that by offering a product (even an inferior one) for every customer need, you smother your competitors by denying them market share.
  - wtmt 7y ago
    It might make sense to assign the Mac to a dedicated team at the top executive level who’s only responsibility is to grow and update the Mac line. Except for MacBook Pro and the iMac, which seem to get some sort of periodic updates, the Mac mini and Mac Pro don’t get enough attention. The Mac mini hasn’t seen any updates since the latest update was launched in 2018. We’ll have to see how the brand new Mac Pro fares in the next two years to get a sense of Apple’s commitment to its entire Mac lineup.
    - tonyedgecombe 7y ago
raydev 7y ago
12% drop for the iPads. Unsurprising. The people who want the lower end of the price range are still perfectly happy with their 5-7 year old iPads. Top of the line suffers in that most people in that market are probably fine or even better off with a MacBook Air/Pro, and they may even save a few dollars instead of buying a Smart Keyboard/folio. Related to the 10 year anniversary: the iPad should be so much more capable than it is. I don't think the people behind shipping the first iteration are happy with its current state a decade later.
- chooseaname 7y ago
  I just bought a mini 5. Not sure what end it sits on, but it’s great. So fast.
  - tyre 7y ago
    What do you use it for?
    - SenHeng 7y ago
      I also just got the mini5 to replace my mini4. I use it mostly for reading, web surfing when outside, calendar stuff, tasks management, sketching. Main reason I got the mini5 despite its similarity to the mini4 is that I wanted to use the pencil while sketching. Come to think of it, I probably use it more than my iPhone.
      - leokennis 7y ago
        Is the 5 appreciatively faster than the 4? I use a Mini 4 now and it’s fine, but compared to my iPhone 11 feels a lot slower.
        mcphage 7y ago
        Yeah, the iPad mini 4 has an A8 processor, and the mini 5 came out several years later, with an A12 processor.
vsareto 7y ago
Does Apple ever have any chance of breaking into the enterprise space and start taking some of the Active Directory marketshare? Maybe a cloud IAM + productivity suite solution?
- scarface74 7y ago
  Why would they want to? They are already well entrenched in the part of the enterprise they want to be in - the mobile device market. The AD market is not exactly hugely profitable and it takes enterprise sales people to push it. That’s not the type of business Apple wants to be in.
alexnewman 7y ago
congrats
mindfulhack 7y ago
And they haven't even re-revolutionised computers again by putting their incredible low-nanometer and can-be-fanless A-series chips into their Mac line-up. That's coming up this year. I am very impressed and hope they've put their MacBook hardware defects era behind them. Typing this on an awesome 16-inch MBP.
- jasondclinton 7y ago
  Source for the A chips in Mac line-up?
  - butterthebuddha 7y ago
    This from Feb 2019: https://www.tomshardware.com/news/apple-mac-arm-cpus-2020-intel,38668.html https://www.tomshardware.com/news/apple-mac-arm-cpus-2020-in...
  - mindfulhack 7y ago
    Informative YT video covering the significance of it: https://www.youtube.com/watch?v=r1hnTKrbq2I https://www.youtube.com/watch?v=r1hnTKrbq2I
  - jeromegv 7y ago
    None, pure guess.
    - wtmt 7y ago
      With Apple’s secrecy, it may not be easy to get a source for certain product developments. But it’s a guess that one could wager on, since Apple values complete control over its design, components, etc. Relying on Intel, while a lot better than how it was relying on PowerPC, has forced Apple to work with Intel’s delayed schedules for newer processors and to wait for the right ones for different device classes (mobile vs. desktop). In the same vein that Apple is now working on designing and building its own modem chips (with the Qualcomm agreement being a stop gap thing), I’m sure (as are thousands of others) that Apple has been working on an ARM based Mac for some years. It’s just a matter of getting enough performance to use it on a low end MacBook and getting the related details on the software side (porting x64 apps to it with lesser effort) ironed out.
nishantvyas 7y ago
if apple were to be a nation state, it will be one of the top 20 trillion dollar economy... insane and amazing... https://en.wikipedia.org/wiki/Trillion_dollar_club https://en.wikipedia.org/wiki/Trillion_dollar_club
- fauigerzigerk 7y ago
  No, that's not a valid comparison. Market cap and GDP are completely different measures. The US GDP is ~$21 trillion, but that's not its market cap, it's just one year's worth of production. You can't buy the USA for $21 trillion.
- MagnumOpus 7y ago
  Revenue is more comparable to GDP - it being a flow metric. On that measure Apple's $260bn puts it around #44.
  - nishantvyas 7y ago
    got it. thanks.
jungletime 7y ago
I've never owned an iPhone, but after the numerous usability problems I've had with my Samsung S10e phone. I think I'll be switching too next cycle.
- sidcool 7y ago
  I recently bought a mid-range Nokia phone with Stock android. I wasn't expecting too much, but I am pleasantly surprised. It's stable and robust with good battery life.
- leokennis 7y ago
  I have used both. The main thing you’ll gain by switching to iOS is smoothness. It’s strange, but 0 frame drops and totally smooth non-jerky animations make a lot of difference. When I’m navigating my iPhone with swipes, it’s like I’m conducting an orchestra. On an Android it’s more like I’m opening cabinets and drawers who’s hinges need some lubricant.
- beagle3 7y ago
  I'm on my 3rd iPhone now (3G -> 4S -> 6S) in 12 years. Some people like to upgrade their phone every couple of years, and that's fine - but some don't -- and no Android is useful for these people. My >5 year old 6S runs the latest-and-greatest OS 13 revision, it is still smooth and useful and does essentially everything I need. It's slower than a new model, has a much lesser camera, and the NFC is useful exclusively for Apple pay. But it's still perfectly useful for me for now. Usability is subjective, and you may like iOS more, or not - but longevity is objective. If you want to stay secure and able to run latest apps (some of which are becoming essential for some of us - e.g. taxi hailing apps in various jurisdictions), you have to upgrade your Android every 2 years, or your iPhone every 5.
  - mtgx 7y ago
    Yes, definitely one of the biggest failures of the Android "ecosystem". Google has figured it out somewhat (3 years of updates), but even that's not enough. Most phones are actually used for 4-5 years, even if a single person doesn't use them for that long (only 2-3 years). But those phones still end-up with someone else. Software updates should definitely account for that. I would dare say a law should be made to ensure that an electronic device should be supported for 80%+ of its typical life (again, not to be confused with how long a single individual uses that specific product, as it can have multiple owners during its life cycle). It's also why electronic devices that don't have replaceable batteries should also be made illegal. It's a cheap trick for companies to add batteries that don't last that long as a indirect planned obsolescence. It's just that it's very difficult to prove that they did it on purpose, as they can just say "we were just trying to lower costs when choosing the shit quality battery". And that's why it would be much better to have a law for replaceable batteries. OEMs can still add their shit batteries to devices if they want, but at least customers can replace them.
tomThom 7y ago
cold, almost want to get the razor out and get myself some wool here.
achow 7y ago
I was confused why this is Q1 2020 results and not Q4 2019 result (since sales figure is till Dec 28 2019). Non-Standard Quarters For a variety of reasons, some public companies will use a non-standard or non-calendar quarterly reporting system. For example, Walmart's first quarter is February, March, and April; Apple Inc's Q1 is October, November, and December; Microsoft Corporation's Q1 is July, August, and September. https://www.investopedia.com/terms/q/quarter.asp https://www.investopedia.com/terms/q/quarter.asp

286 points by chollida1 7y ago

Notes: - for first time seeing analysts excited about other products, watch and airpods as being real drivers of bottom line revenue!!! - interesting note from Bloomberg tech reporter "Apple’s new revenue strategy isn’t a bad one. It’s, basically, sell the customer an iPhone every three to five years, and make a bunch of money in the years between by selling them a new Apple Watch or AirPods (which only last about three years tops before you need a new pair -- batteries!) and services. If a user subscribes to all of Apple’s services for two years straight, that’s about equal to revenue from a new iPhone. So in those cases, if that user doesn’t buy a new iPhone for a couple years, it’s not a big deal." - apples done so well lately that the average analysts has a target price 5% below what apple is currently trading at - they manufacture iphones 400 km from the center of the coronavirus outbreak, see if this is mentioned, also about 18% of apple revenue so China matters - want to see what their effective tax rate is Numbers: - stocks almost back to record highs before reporting, after reporting it shot way past!! - 1Q Revenue is $91.8B vs estimates of $88.38B!!!!!! - 1Q EPS is $4.99 vs estimates of$4.56!!!!! - wearables was $10 vs $7.3 last year( apple just continues to create $10+ billion dollar business every 3-5 years. Use to be that only MSFT could do that and GOOG spent heavily trying to do that - iphone revenue for 1Q is $55.97 - service revenue for 1Q is $12.72 - declines in both mac($7.1 vs $7.4 last year) and iPad sales($6 vs %6.7 last year) - iphone sales up everywhere except Japan Numbers that really impress - Cash/Equivalents have doubled from last year, that funds a lot of money loosing streaming shows - keeping in mind they bought back $37B in stock this year - almost $100B in term debt Supply Chain: - Qurvo up 1% - Skyworks up 1% - Cirrus up 3%

hindsightbias 7y ago
Reality doesn’t matter, the naysayers will be dumping again on APPL very shortly. 33 Quarters since SJ died, it’s over!
pbreit 7y ago
"sell the customer an iPhone every three to five years" Aren't lots of people on monthly plans now with "free" annual upgrades?
- __abc 7y ago
  I'm on this plan (the zero interest loan plan designed to drive an annual upgrade) and it isn't exactly free. The loan is absolutely zero interest, but I get ~$200 in fees when I upgrade from AT&T. It's enough where I didn't upgrade from the X to the 11. I have also since switched to Google Fi and don't know if that same fee exists with them ....
  - RandallBrown 7y ago
    What fees are you getting from AT&T? I've been a part of the iPhone upgrade plan since it started and haven't been charged any fees by AT&T.
    - jedieaston 7y ago
      He’s talking about the fees associated with AT&T’s lease plan, not Apple’s.
      - yungstevejobs 7y ago
        No. AT&T started charging an upgrade fee, regardless if you went through a 3rd party or not. This started in 2018 iirc.
    - pastor_elm 7y ago
      line access and sim card fee?
  - enos_feedler 7y ago
    $200 sounds a bit insane. Is this across many devices on a multi-device shared plan? AT&T charges me $40-$50 each time I upgrade the device. Anything > $0 still seems silly, but $200!
aguyfromnb 7y ago
>1Q EPS is $4.99 vs estimates of$4.56!!!!! I'm constantly reading on HN about the deceiving nature of stock buybacks on earnings. Is this not an example? Net income was down year-over-year on "record" per share earnings.
- cmdli 7y ago
  I wonder. If you're an investor, all you really care about is how much your shares are earning you. If the amount of earnings per share goes up, then the value of that share also goes up.
  - adventured 7y ago
    > all you really care about is how much your shares are earning you Properly you care about more than that: you want to know how the business is faring; the thing that actually has to support the EPS. You want to know that you're not watching a dwindling scenario, where you're losing the business and the buybacks are getting you just a bit more than treading water. That's where EPS juicing can be a dangerous camouflage. If juicing EPS with buybacks comes at the cost of longer term growth, it's a disaster for long-term shareholding. Incorrect capital allocation sinks a lot of ships. IBM, as one infamous example, played (is playing) an aggressive financial engineering game where they were seeing their business contract every quarter for years, yet juiced EPS through buybacks. It did absolutely nothing for the stock, which hasn't moved in ten years (Adobe is now worth more than IBM + the former Red Hat, ouch). All those profits shoveled into buybacks and it did nothing to drive consequential returns for shareholders. If shareholders are lucky they've yielded three or four percent per year the past decade, with inflation + buybacks + dividends (while a lot of other prominent tech companies have generated epic returns in that time). It could have gone into building a better cloud business which would have provided growth, which would have rewarded them with a PE ratio that isn't a dismal 13 (Apple has a multiple 2x that with very modest growth). In four or five years AWS will be as large as IBM's entire business (it's already nearly as profitable now). Shareholders have seen some EPS boost while the business gradually vanishes out from under them. Is it more likely that IBM's profits were better spent on buying shares back or driving business growth? You could have rolled up a massive cloud business for $50 billion in acquisitions between 2008-2018 (and ideally not stupidly paid twice what Red Hat was actually worth, near the peak of a stock market bubble).
bamboozled 7y ago
So great news for the environment and relatability. What a joke. Seems like Apple is making money from creating disposable rubbish and trashing the Earth. Maybe I’m wrong and they recycled all? I hope this is the case.
- KarlKemp 7y ago
  Longer buying cycles on the phones would be quite beneficial. And Apple has quite a good track record on longevity compare to others, in notebooks for example. They also lead on recycling, and were among the first to reduce and eliminate a bunch of toxins from their processes, and to aggressively cut back on packaging. In perspective (to Elon Musk‘s products, for example) Airports are completely irrelevant, as long as they are not powered by enriched uranium: they are just too small.
  - bamboozled 7y ago
    Yes but it sounds like their strategy is changing to having things which are disposable in the middle of these cycles to make extra revenue. That's the uncool part.
  - Polylactic_acid 7y ago
    Apples Macbooks are the leading the way for creating mountains of needless waste. We had multiple sent back because of their horrible keyboards failing repeatedly. And unlike on other brands where you could pop off a key and remove the whole keyboard without any tools, Macbooks have the keyboard secured with about 90 rivets so unless you want to spend hours and hours plucking out rivets and then threading the holes, the entire bottom case becomes useless which has glued to it the trackpad, speakers and battery. How environmentally friendly! Recycling is a corporate greenwashing tactic to make it seem like you can buy endless product and do the planet a favor because someone in china burned off all the non metals and grabbed the remaining aluminum.
    - aloer 7y ago
      Don’t you think Apple will recycle every MacBook top case that is sent back? Whether as refurbished or in material, either way it’s probably very efficient or they would lose so much more on all these free repairs
deleted 7y ago
[deleted]
mtgx 7y ago
> which only last about three years tops before you need a new pair -- batteries!which only last about three years tops before you need a new pair -- batteries! Needing a new battery should be the absolute LAST reason you would want to replace your electronic device, not only in the sense that the customer is getting screwed this way through planned obsolescence, but also because this only makes the problem of electronic waste so much worse. You should be able to replace the battery in your phone, watch, remote, electric car, and really every single device. I don't care said device would be slightly thicker because of it, the companies will innovate around that eventually. It's far from a good enough reason to create devices without replaceable batteries. I find this to be one of the most anti-consumer features a company can add to their products.
ksec 7y ago
A lot of these were expected? Still good to see it now as fact. I have jokingly made the prediction on in 2016 that Apple will reach 1B iPhone User by 2020, turns out we are very close judging from the 1.5B Active Base. iPhone in Japan - For those not aware iPhone has 80%+ Market Share in Japan ( Usage, not Sales ). And majority of iPhone user prefer smaller handset, that is the iPhone 4.7" or smaller like the iPhone SE size. So Apple hasn't really had any update for that market in 2019. Another point was Japan has passed a law that ban the subsidise phone selling with carriers. Making the cost of iPhone higher. Face ID is also not as well liked comparatively speaking, so replacement cycle are longer. But Mac not so Good. I only posted this yesterday[1]. Basically more Mac users are leaving the platform. The Churn rate is possibly the highest in the past 10 years. I am not sure if this is because casual users are generally leaving the PC platform as a whole, or they are leaving to Windows or Linux. [1] https://news.ycombinator.com/item?id=22170080 https://news.ycombinator.com/item?id=22170080

OrangeMango 7y ago

Mac sales drop is fair small - 3% or so. The iPad saw a drop of 12% or so. Fairly significant.

thetinguy 7y ago
No new iPad Pro in 2019
- OrangeMango 7y ago
  You are probably right. The thing is, if Apple wants to drive more iPad sales, they really need to open up what it is allowed to do. iPads from 5+ years ago are still great for almost anything but the most intense games. I have the 9.7" iPad Pro, which is something like 3 years old by now. I have no reason to upgrade. Swift Playgrounds is a great app and has a built-in compiler. It's very nearly an IDE at this point. On my iPad, it compiles slowly and really eats the battery. But I don't really care; it's just a toy app. If Apple were to allow things compiled in Swift Playgrounds to be run, say, via the Shortcuts app (in any shortcut I created), I'd be excited to start really developing code on the iPad, and I'd want to buy a new iPad to enable that.
  - scarface74 7y ago
    And this is why techno-geeks don't get Apple. Apple "opening up" the iPad by allowing people to compile code, wouldn't even move the needle.
    - IggleSniggle 7y ago
      It might. I'd argue that the original success of iPhone is very symbiotic with the developer community it grabbed. There was a latent hunger from software creators to make mobile software, but no decent platform to develop for. Making techno-geeks happy can move the needle for the whole ecosystem (it can also be a huge waste of time, depending on what you hope to achieve...Oculus is a great example of the masses not following the energy despite massive excitement and development efforts by techno-geeks).

jandrewrogers 7y ago

The astounding thing about Apple is not the scale at which they operate, though that is impressive. It is the rate at which they still grow revenue concurrent with insane profitability and revenue diversification at that scale. Incredible business execution. Their slow creep into healthcare is a particularly interesting longterm play, due to the size of the market if nothing else.

ardit33 7y ago
I was playing indoor soccer, and I noticed one of the opposing players had an apple watch on. I wanted to complain the ref about it (jewelry and wearables are not allowed during games), but then I realized that at least 1/3rd of the players had some kind of watch (including my teammates). You didn't see them during games a couple of years ago... so I guess they opened a new market and people are used to them.
- ska 7y ago
  fitness monitors have really started to shift this, I think.
- outoftheabyss 7y ago
  You have a ref for indoor soccer? And rules on what you can wear? Indoor soccer to me was always just a casual affair, besides the odd tasty tackle and fall out
  - emiliobumachar 7y ago
    There are professionals, championships and all.
  - gramakri 7y ago
    it's called futsol
  - stevehawk 7y ago
    A lot of educational leagues have refs and rules on attire. For instance, every rec basketball league I've ever been in banned shorts with pockets because of the risk of defenders snagging/dislocating/breaking fingers and had rules on finger nail length to reduce incidental scratches.

onetimemanytime 7y ago

Wow! AAPL has been buried so many times, only to surprise people. $91,000,000,000 in sales over 3 months, we're almost talking about real money :)

keyle 7y ago

I'm happy for apple, but I'm annoyed at 'service' growing. The free plan offering hasn't increased as far as I know, and the devices require more and more icloud backup space, so why would you be surprised in an increase of 'service' revenues?

reaperducer 7y ago
The devices don't require any iCloud backup space. You are free to back up your device on your local machine. Or if you want to live dangerously, you don't have to turn on iCloud backups at all. In fact, you don't have to turn on iCloud, period.
- dangero 7y ago
  They are blocking competition in backups and cloud storage using private apis that would bring the cost down.
  - reaperducer 7y ago
    They're blocking competition by allowing you to back up to your own computer?
    - OldHand2018 7y ago
      The Files App on iOS can connect to any SMB share. Just make a shortcut that runs periodically: take everything in the "recent" folder, compress it, name it the current date, and copy it to a SMB share of your choice.
    - ReverseCold 7y ago
      iCloud backs up when you plug in your phone at night without any configuration. Requirements to back up to your own computer include... - Owning a computer - Plugging your phone into your computer - Having iTunes always running (if it's not a Mac) Additionally, Apple provides a very convenient API where you can store files and have it show up on related devices after calling a sync function. Many apps which store user data use this, and it requires iCloud if you want to sync between Mac and iOS or iOS to iOS. It's a very common pattern, some popular apps that use it: GoodNotes, Studies, Notability, WhatsApp, Linea, and every Apple-made app.

40acres 7y ago

Apple finally decided to start capturing some of the value add of the iPhone itself (App store fees are solid revenue I suppose but a tiny fraction of the overall potential value of an iPhone) and now somehow an unstoppable force has gotten even more successful. I don't think I've ever seen such a tentpole product. No doubt in my mind that Apple will be the one takes AR and possibly VR to the next level.

scrumbledober 7y ago
Are they currently working on VR?
- dplgk 7y ago
  Yes
WalterBright 7y ago
> I don't think I've ever seen such a tentpole product. Microsoft DOS and then Windows.
- brantonb 7y ago
  The head of Windows and Office used to joke at the all hands meetings about making 120% of the company’s profits.

iknowalot 7y ago

They stopped publishing how many units of each model of iPhone they sell, that's a major investor red flag.

cdolan 7y ago
They stopped detailing their exact Mac and iPad sales too, so I dont see the problem. I realize iPhone is an amazing amount of their revenue, but they are transitioning to a services and accessory business built around iPhone. It’s less important exactly what model iPhone you have, in my opinion.
- mrscottson 7y ago
  Well, they should let that (units sold) number decline on the public disclosures... Reducing investor visibility into a publicly traded company when numbers start turning negative is a huge flaming red flag.
  - scarface74 7y ago
    No company announces hardware sells volumes. Well, I think the console makers do.
    - mrscottson 7y ago
      Wrong, I followed Apple earnings reports for years, they always provided unit sold numbers. Post a link proving your false claim.
    - mrscottson 7y ago
      "AAPL will stop reporting unit sales for iPhone, iPad, and Mac beginning the December quarter..." Live blog: Apple’s fiscal Q4 2018 earnings call https://9to5mac.com/2018/11/01/aapl-live-blog-fy18-q4/ https://9to5mac.com/2018/11/01/aapl-live-blog-fy18-q4/
      - scarface74 7y ago

InterestBazinga 7y ago

Tim Cook has added $1 trillion dollars to Apple's market cap since he took over. Apple's ability to sell a new IPhone every year is honestly the stuff of legends, it almost defies logic but they keep on executing it. It is a bit interesting to see misses from Macs, IPads and services. Which tells you Apple is still very much an iphone story.

dillonmckay 7y ago
If Macs could be financed and upgraded like phones, that would be interesting to see.
- InterestBazinga 7y ago
  Isnt Apple financing available for Macs?
  - tmpz22 7y ago
    Yes. A lot of the diehards over at /r/apple let slip occasionally how they are always financing the latest and greatest. Which is absurd to me especially for the mac product lines where you are overpaying by thousands for an outdated machine [1]. And the estimate of 3 year lifecycle for wearables like the watch and airpods seems overly optimistic. My airpods are a year old and the battery dwindles in about an hour or two before needing charging, my watch is bricked after 7 months. When the current debt bubble pops it'll be interesting if it effects Apple revenue as hard as it will the college debt / car debt markets. [1]: https://www.youtube.com/watch?v=mIB389tqzCI https://www.youtube.com/watch?v=mIB389tqzCI
    - favorited 7y ago
      > watch is bricked after 7 months Don't they have a 1-year warrantee?
    - realdlee 7y ago
      I still have a series 0 Apple watch that works fine and is used everyday. How is your watch not working?

kotrunga 7y ago

Just a little sad to see how much value they put into the iPhone and services while iPad and Mac software is lacking. Obviously, they're making money, and that's their goal. However, I think sales could be boosted for the iPads and Macs if they increased the quality of the software for those devices. Great example explanation within here: https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_10 https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_...

mooreds 7y ago
Do you think it'd make sense to spin off the mac business, or is it too integrated (with the app store)?
- threeseed 7y ago
  It's integrated with everything e.g. Airdrop, Continuity, Handoff, iCloud Drive/Sync, Messages, Sidecar etc. And clearly the investment with Catalyst means they see the future as unified iOS/OSX apps.
  - ethbro 7y ago
    At minimum, it's integrated in the GM sense. In that by offering a product (even an inferior one) for every customer need, you smother your competitors by denying them market share.
- wtmt 7y ago
  It might make sense to assign the Mac to a dedicated team at the top executive level who’s only responsibility is to grow and update the Mac line. Except for MacBook Pro and the iMac, which seem to get some sort of periodic updates, the Mac mini and Mac Pro don’t get enough attention. The Mac mini hasn’t seen any updates since the latest update was launched in 2018. We’ll have to see how the brand new Mac Pro fares in the next two years to get a sense of Apple’s commitment to its entire Mac lineup.
  - tonyedgecombe 7y ago

raydev 7y ago

12% drop for the iPads. Unsurprising. The people who want the lower end of the price range are still perfectly happy with their 5-7 year old iPads. Top of the line suffers in that most people in that market are probably fine or even better off with a MacBook Air/Pro, and they may even save a few dollars instead of buying a Smart Keyboard/folio. Related to the 10 year anniversary: the iPad should be so much more capable than it is. I don't think the people behind shipping the first iteration are happy with its current state a decade later.

chooseaname 7y ago
I just bought a mini 5. Not sure what end it sits on, but it’s great. So fast.
- tyre 7y ago
  What do you use it for?
  - SenHeng 7y ago
    I also just got the mini5 to replace my mini4. I use it mostly for reading, web surfing when outside, calendar stuff, tasks management, sketching. Main reason I got the mini5 despite its similarity to the mini4 is that I wanted to use the pencil while sketching. Come to think of it, I probably use it more than my iPhone.
    - leokennis 7y ago
      Is the 5 appreciatively faster than the 4? I use a Mini 4 now and it’s fine, but compared to my iPhone 11 feels a lot slower.
      - mcphage 7y ago
        Yeah, the iPad mini 4 has an A8 processor, and the mini 5 came out several years later, with an A12 processor.

vsareto 7y ago

Does Apple ever have any chance of breaking into the enterprise space and start taking some of the Active Directory marketshare? Maybe a cloud IAM + productivity suite solution?

scarface74 7y ago
Why would they want to? They are already well entrenched in the part of the enterprise they want to be in - the mobile device market. The AD market is not exactly hugely profitable and it takes enterprise sales people to push it. That’s not the type of business Apple wants to be in.

alexnewman 7y ago

congrats

mindfulhack 7y ago

And they haven't even re-revolutionised computers again by putting their incredible low-nanometer and can-be-fanless A-series chips into their Mac line-up. That's coming up this year. I am very impressed and hope they've put their MacBook hardware defects era behind them. Typing this on an awesome 16-inch MBP.

jasondclinton 7y ago
Source for the A chips in Mac line-up?
- butterthebuddha 7y ago
  This from Feb 2019: https://www.tomshardware.com/news/apple-mac-arm-cpus-2020-intel,38668.html https://www.tomshardware.com/news/apple-mac-arm-cpus-2020-in...
- mindfulhack 7y ago
  Informative YT video covering the significance of it: https://www.youtube.com/watch?v=r1hnTKrbq2I https://www.youtube.com/watch?v=r1hnTKrbq2I
- jeromegv 7y ago
  None, pure guess.
  - wtmt 7y ago
    With Apple’s secrecy, it may not be easy to get a source for certain product developments. But it’s a guess that one could wager on, since Apple values complete control over its design, components, etc. Relying on Intel, while a lot better than how it was relying on PowerPC, has forced Apple to work with Intel’s delayed schedules for newer processors and to wait for the right ones for different device classes (mobile vs. desktop). In the same vein that Apple is now working on designing and building its own modem chips (with the Qualcomm agreement being a stop gap thing), I’m sure (as are thousands of others) that Apple has been working on an ARM based Mac for some years. It’s just a matter of getting enough performance to use it on a low end MacBook and getting the related details on the software side (porting x64 apps to it with lesser effort) ironed out.

nishantvyas 7y ago

if apple were to be a nation state, it will be one of the top 20 trillion dollar economy... insane and amazing... https://en.wikipedia.org/wiki/Trillion_dollar_club https://en.wikipedia.org/wiki/Trillion_dollar_club

fauigerzigerk 7y ago
No, that's not a valid comparison. Market cap and GDP are completely different measures. The US GDP is ~$21 trillion, but that's not its market cap, it's just one year's worth of production. You can't buy the USA for $21 trillion.
MagnumOpus 7y ago
Revenue is more comparable to GDP - it being a flow metric. On that measure Apple's $260bn puts it around #44.
- nishantvyas 7y ago
  got it. thanks.

jungletime 7y ago

I've never owned an iPhone, but after the numerous usability problems I've had with my Samsung S10e phone. I think I'll be switching too next cycle.

sidcool 7y ago
I recently bought a mid-range Nokia phone with Stock android. I wasn't expecting too much, but I am pleasantly surprised. It's stable and robust with good battery life.
leokennis 7y ago
I have used both. The main thing you’ll gain by switching to iOS is smoothness. It’s strange, but 0 frame drops and totally smooth non-jerky animations make a lot of difference. When I’m navigating my iPhone with swipes, it’s like I’m conducting an orchestra. On an Android it’s more like I’m opening cabinets and drawers who’s hinges need some lubricant.
beagle3 7y ago
I'm on my 3rd iPhone now (3G -> 4S -> 6S) in 12 years. Some people like to upgrade their phone every couple of years, and that's fine - but some don't -- and no Android is useful for these people. My >5 year old 6S runs the latest-and-greatest OS 13 revision, it is still smooth and useful and does essentially everything I need. It's slower than a new model, has a much lesser camera, and the NFC is useful exclusively for Apple pay. But it's still perfectly useful for me for now. Usability is subjective, and you may like iOS more, or not - but longevity is objective. If you want to stay secure and able to run latest apps (some of which are becoming essential for some of us - e.g. taxi hailing apps in various jurisdictions), you have to upgrade your Android every 2 years, or your iPhone every 5.
- mtgx 7y ago
  Yes, definitely one of the biggest failures of the Android "ecosystem". Google has figured it out somewhat (3 years of updates), but even that's not enough. Most phones are actually used for 4-5 years, even if a single person doesn't use them for that long (only 2-3 years). But those phones still end-up with someone else. Software updates should definitely account for that. I would dare say a law should be made to ensure that an electronic device should be supported for 80%+ of its typical life (again, not to be confused with how long a single individual uses that specific product, as it can have multiple owners during its life cycle). It's also why electronic devices that don't have replaceable batteries should also be made illegal. It's a cheap trick for companies to add batteries that don't last that long as a indirect planned obsolescence. It's just that it's very difficult to prove that they did it on purpose, as they can just say "we were just trying to lower costs when choosing the shit quality battery". And that's why it would be much better to have a law for replaceable batteries. OEMs can still add their shit batteries to devices if they want, but at least customers can replace them.

tomThom 7y ago

cold, almost want to get the razor out and get myself some wool here.

achow 7y ago

I was confused why this is Q1 2020 results and not Q4 2019 result (since sales figure is till Dec 28 2019). Non-Standard Quarters For a variety of reasons, some public companies will use a non-standard or non-calendar quarterly reporting system. For example, Walmart's first quarter is February, March, and April; Apple Inc's Q1 is October, November, and December; Microsoft Corporation's Q1 is July, August, and September. https://www.investopedia.com/terms/q/quarter.asp https://www.investopedia.com/terms/q/quarter.asp