Horace Dediu: "How accurate is Apple’s Guidance? Over the last 23 quarters the average error has been 2.63% (measuring from top of guidance range)." [0]
What's surprising is the absence of extreme overshoot. I think smartphone market has matured enough.
[1] https://www.bloomberg.com/news/articles/2018-04-30/apple-res...
Numbers:
- Q Rev. $51.5B to $53.5B, Est. $51.4B
- Q2 2018 revenue of $61 billion, equaling analyst's estimates. That's 16 percent growth from a year ago. It's the fastest year over year expansion since 2015
- Apple sold 52 million iPhones in the second quarter, compared to 50.1 million units in the year-ago quarter. This represents year-over-year 3 percent unit growth and 14 revenue growth
- services revenue up 31 percent from a year ago and 8 percent from the preceding three months.
- Quarter over quarter, iPhone sales fell 32 percent in terms of units and 38 percent in terms of revenue. The average selling price was $728 per phone compared with an average estimate of $740.
- The iPad made gains from a year ago. Apple sold 2 percent more in the second quarter from a year ago with a 6 percent revenue gain. It sold fewer Mac computers compared with a year ago and revenue was flat.
- other revenue, watch, pay, tv, etc Revenue was up 38 percent from a year ago.
- Cash at end of 2Q $267.2 billion vs $285.1 billion q/q
- est. 3Q operating expenses $7.7 billion to $7.8 billion
- est. 3Q tax rate about 14.5%
Commentary:
- apple store now has 270 million paying subscribers - that's 100 million more than a year ago.
- - In a note to investors, Morgan Stanley said it expects Apple to hike its capital return program by $150 billion to a total of $450 billion in returns by 2020. This would be up from the $300 billion program announced last year, which was expected to run through March-2019. Apple is also expected to up its quarterly dividend to 0.945 cents per share, up from the current 63 cents, according to Morgan Stanley.
- Apple was the largest non-financial issuer of U.S. investment-grade bonds last year.
and from Jon Elichman this was intersting
Number of iPhones sold in Q2:
Q2 2018: 52.2 million
Q2 2017: 50.8 million
Q2 2016: 51.2 million
Q2 2015: 61.2 million
Q2 2014: 43.7 million
Q2 2013: 37.4 million
Q2 2012: 35.1 million
Q2 2011: 18.6 million
Q2 2010: 8.8 million
Q2 2009: 3.8 million
Q2 2008: 1.7 million
That has to be wrong. They were at 40 million a few months ago.
Worth pointing out 2015 was the last super cycle, which was the iPhone 6 and 6 Plus, Apple sold 74.5 million iPhones during the first quarter of fiscal 2015 year.
So in terms of unit in two Quarter combined, 2015 still sold more unit.
Personally i am not too happy with China's growth.
They still got more profit from selling fewer units due to highe ASP.
1. By boosting the value of already granted RSUs, both vested and unvested.
2. By augmenting the pool of shares that can be issued to employees as RSUs.
[Remember, the objective of stock buybacks is to buy back shares on the open market and retire them, increasing the % ownership of each shareholder (and thereby the intrinsic value of the security) correspondingly].
[[Or you can view it as the company holding the shares for the shareholders, mathematically it's the same]]
I think what Apple needs are some barbarians at the gates. Something which challenges them to be greater than they are, rather than sitting back on their laurels. I continue to be surprised that they don't step into the cloud computing pool. There are some solid advantages to having a cloud infrastructure that you can use to deploy new initiatives at scale.
I also wish they would spin out their computer business (Macbook, Ma Pro, Mac Mini, iMac) into its own division. While I chided Google for creating Alphabet, having your own identity can sharpen your focus if it is done well. It would also let them decide where they wanted to go with some of the legacy product lines.
To me, one of the core strengths of Apple is integration of all its devices, and it seems to me that creating separate divisions competing with each other would risk undermining this integration.
In the late 90s, I heard hair raising stories of how various divisions at Sun were operating at cross purposes due to a myoptic focus on their own balance sheets. I believe you worked there. In your opinion, were the competing divisions a strength or a weakness of Sun?
From where I could watch, Sun's biggest issue was that they forgot they were a systems company and started trying to be a components company. They had also pretty much become completely afraid of 'open' systems at that point. Playing tricks on competing SPARC computer companies, screwing up the OS portability, etc.
https://venturebeat.com/2016/03/17/apple-cloud-project-mcque...
They also has their own CDN.
[1] http://fortune.com/2017/02/21/apple-data-center-project-isab...
I'm past ready for the loving embrace of cradle-to-grave iCloud awesomeness.
Why can't I backup my macOS devices to iCloud?
Why can't I send iCal invites via iMessages?
I don't want to reconfig my email clients (et al) on each device.
Whatever 1Password does for me, I want built-in, and better.
APPLE 2Q REV. $61.1B, EST. $60.9B
APPLE REPORTS NEW $100B BUYBACK PROGRAM, BOOSTS DIVIDEND BY 16%
APPLE 2Q IPHONE UNITS SOLD 52.2M, EST. 52.3M
1. iPhones units sold stalled for 3 years in a row. This means the company need to seek every year some trick to earn more from each phone. It is not obvious if they'll be able to do for a long time.
2. Top Android devices are improving and Google Pixel 2 is really an incredible device that is making some iOS users switching. I've no data but my nerd friends are doing this a lot, and sometimes what you see in the nerd-sphere in a few years happens in the normal market.
3. They are struggling at competing in the space of the biggest ecosystems around phones. Cloud, computational photography, assistant.
1. They have grown since last 2nd quarter, and are still pulling in ridiculous profits.
2. No one is buying the Pixel, they will probably sell 5 million this year if lucky. Less than 1/10 what Apple sold in this quarter alone. The S9 has also been struggling.
3. Cloud has grown.
"Nerds" are the group most adept at switching back and forth so your anecdote really isn't useful in the slightest. And the numbers really don't show a systemic move back to Android.
Also this group may be trend-setters because it does happen sometimes. But far more often it doesn't. Otherwise we would've seen everyone cancel Facebook, use Bitcoin for all payments and vote for Bernie Sanders.
> They are struggling at competing in the space of the biggest ecosystems around phones. Cloud, computational photography, assistant.
iMessages is a killer platform that only exists on iOS. iCloud simply just works for most people storing photos and backing up their devices. Portrait Mode has been a key marketing differentiator in the photography space. And whilst Siri isn't as good as Alexa/Google Assistant in some areas it is better in others.
They don’t tell you the longevity of devices. From what I see, iPhones are cutting off the oxygen from android. My kids school is what use as a reference... literally 80/20 iPhone to non iPhone. The SE and used phones make it more attractive than throwaway androids that are un-upgradable.
Enterprises, same thing. I talk to a few companies/gov with an aggregate total of probably 200k phones. 95% iPhone.
Google is amazing at services. But the OEM bullshit, carrier concessions are hurting them. My guess is that they will make a Chrome phone to fix that. Google Photos alone is a killer app when they do that.
After half a year of this, I'm quite happy. The competition will have to make some miracles to make me want to change back.
However, I think there is a compelling future where the iPhone is the heart of a constellation of devices that we use everyday. Actually, that is not even the future, that is the present. The sheer power of the devices in our pockets is only just now being realized.
In such a world, Apple is poised to have significant competitive advantages over others. That is, hardware and software integration. The next 5-10 years are going to be as exciting as the original smartphone revolution.
I think the past two to three years they have been way too distracted with Apple Park, arguably the biggest Apple product since the iPhone. I think next two to three years will be important to show if they could really steer well without Steve. But I am already not liking their touchbar and quality issues on mac and FaceID, notch on iPhone X
However, the experience of the Samsung Galaxy S8 (which was just to get me familiar with the platform while I looked for a better phone) was incomprehensibly poor. People keep telling me that it's Samsungs software that's crappy but it's really unacceptable for a flagship phone to be this crappy.
Yeah, those sound sketchy to me too. Perhaps you could switch to the non-laggy non-malwareinfested non-garbage android phones.
At least Google isn't making your phone laggy on purpose! (too soon?)
Joking aside, there are a lot of sketchy, crappy Android devices, but there are also some decent ones (e.g. straight from Google). I suspect you've only been exposed to the crappy ones.
4.No other growth drivers in sight after the failure of apple watch to become huge.
Apple Watch is the number one smart watch.
It sold 8 millions unit last quarter (a rise of 10.3%) and represents about half of all smart watch sales. You would have to be deluded to think that it isn't anything other than a huge success.
1. iphone is a mature product.
2. no onvious new groundbreaking product releases on the horizon (a watch is not it).
3. desktops are dying, and their replacements, the ipads, are stagnating.
4. intel screwed them with processor roadmaps intel had no hopes of meeting (cannonlake, anyone?)
5. no longer visionary on the future of computing (seem to be chasing all the flavors of the month lately).
6. services growth is a lagging indicator on the health of the ecosystem (or walled garden, if you prefer).
7. product and design mishaps all over (dongles, broken keyboards, homepod's a dud so far).
8. waning customer loyalty (customers are staying with apple not from excitement but from apathy in the space)
9. the low hanging fruit in ubiquitous, mobile and personal computing have been plucked (just the hard stuff remains).
i'm not suggesting all is lost, but from my vantage point outside the company, it's concerning. airpods and the pencil seem most promising in the short term to me. airpods hold the promise of voice computing (if siri could get her act together), and the pencil promises to be the first techology to truly kill off paper, but neither of those hold any certainty.
Siri needs improving, though, no question.
How very convenient that you seem to think you can handwave away the ridiculously huge growth in services by saying it's a lagging indicator. No chance at all that it could be partly due to new and more compelling services offerings (music, icloud)?
You sound almost as confident as the 'analysts' who predicted a down quarter with a failing and cancelled iPhone X.
