Wednesday, August 1, 2018 [Tweets] [Favorites]

Apple’s Quarterly Results

Jason Snell:

Now, iPhone unit sales are still down from the days of the iPhone 6. What’s changed is that the average selling price of an iPhone is up—way up. That’s mostly thanks to the iPhone X, which has a record-breaking price tag that hasn’t seemed to matter one whit in terms of consumer acceptance.

[…]

As someone who’s interested in products, I find the focus on Services revenue to be a bit dispiriting. I get excited at the prospect of new products and seeing how consumers are accepting or rejecting products in the market. But the discussion of Services, especially in a financial context, is essentially a conversation about how Apple can grind more money out of every single person who uses an iPhone, iPad, and Mac. (At least the Other Products line, which is also growing rapidly, contains real products like AirPods and the HomePod and the Apple Watch.)

John Gruber:

I think it’s even worse than that. I think Apple’s (Cook’s?) interest in increasing revenue from Services is keeping them from doing what’s right — increasing the base iCloud storage from 5 GB to something more reasonable.

Joe Rossignol:

Apple on Tuesday reported that it sold 3.72 million Macs in its third quarter, which spanned April 1 through June 30, the fewest in any single quarter since it sold 3.47 million in the third quarter of 2010.

Marco Arment:

Years of shameless neglect at the low end, followed by years-long design flops at the high end, have their costs.

I think, and hope, that this is as bad as it gets, and we’re on our way out of this dark period of Mac hardware.

Ben Bajarin:

Macs had an odd quarter and there are good explanations as to why. I don’t expect this as a trend signal and if what I hear they have in their sleeve is correct the Mac business will be more than fine.

Juli Clover (Hacker News):

With 54.2 million smartphones shipped in the second calendar quarter of 2018, Chinese smartphone company Huawei has surpassed Apple to become the number two worldwide smartphone vendor, according to new data shared today by IDC.

This despite not selling any phones in the US.

Update (2018-08-02): Neil Cybart:

It is estimated that Apple spent $150 million to build the first iPhone in the mid-2000s. At the time, it was a significant amount of cash for Apple. Nearly ten years later, Apple finds itself spending that much money developing one show for its upcoming video streaming service.

[…]

My theory on the dramatic rise in Apple R&D expenditures is that management is becoming more ambitious. Apple's future is found in new industries. Just as Apple moved from desktops/laptops to personal music players, smartphones, and watches, the company will need to enter new industries to remain relevant.

Ryan Reith:

Not only did iPhone volumes outpace market growth this quarter, but revenue grew 20%. That is absurd for many reasons, number one being that most of the largest iPhone markets experienced an overall decline during the same period.

Dr. Drang:

By now, I’m sure you’ve already seen the many charts at MacStories and Six Colors, but I still like to post my own. It gives me a chance to try out new ways of showing the data.

[…]

Everyone has pointed out that this quarter had the worst Mac unit sales since 2010. This is true, but as you can see, the June quarter of 2013 was about as bad—3.754 million units compared to the most recent quarter’s 3.740 million. “Worst quarter since waaay back in 2010” makes for a better story.

2 Comments

People are too concern of shipping / selling units. What is the more important metrics are total iPhone users / total Smartphone users. Tim Cook reported a double digit percentage in iPhone users growth. That put Apple with close to 800M iPhone users, out of a total of close to 3000M Smartphone users. Apple already has plans to expand in its midrange, which is the rumoured iPhone with 6.1" LCD. That should be enough for Apple to fuel its iPhone user base to one billion by 2020 / 2021.

So it doesn't matter if Apple had a whole year with Zero iPhone sales, as long as its user base are not declining, you can bet they will stay within the ecosystem. The moat around iPhone and Apple ecosystem is extremely strong.

> So it doesn't matter if Apple had a whole year with Zero iPhone sales, as long as its user base are not declining, you can bet they will stay within the ecosystem

I'm not sure this is true. Not all users are created equal; somebody running an iPhone 5 today does not have the same behavioral patterns as somebody running an iPhone X.

Think of it like this: when the PS4 came out, software support for the PS3 diminished very quickly, while lots of games for the PS4 were announced, even though there were 80 million PS3 owners out there, and zero PS4 owners. While super popular casual games like Fifa still came out for the PS3, many other games did not. Why? Because people who buy a PS4 will also buy a bunch of games, while people who have had a PS3 sitting under their TV for the last five years are much less likely to do so.

Likewise, somebody owning a phone introduced in the last 12 months is much more likely to spend money on apps and accessories than somebody who bought an iPhone 5 years ago, and hasn't upgraded since then.

A whole year with zero iPhone sales would kill the market for iOS apps.

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