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Notes: - for first time seeing analysts excited about other products, watch and airpods as being real drivers of bottom line revenue!!! - interesting note fro

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!
    - lotsofpulp 7y ago
      Those activation fees for devices you own are bullshit, and I can’t believe the government allows it. $30 to do NOTHING.
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

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!
  - lotsofpulp 7y ago
    Those activation fees for devices you own are bullshit, and I can’t believe the government allows it. $30 to do NOTHING.

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