iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
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Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#2The key numbers from the Press Release:
The Company posted quarterly revenue of $50.6 billion and
quarterly net income of $10.5 billion, or $1.90 per diluted
share. These results compare to revenue of $58 billion and
net income of $13.6 billion, or $2.33 per diluted share, in
the year-ago quarter. Gross margin was 39.4 percent compared
to 40.8 percent in the year-ago quarter. International sales
accounted for 67 percent of the quarter’s revenue.
So not really a surprise from what they announced at previous quarter.
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#3The expectation was $2.00 EPS, Apple reported $1.90. AAPL is down in after-hours trading right now, at 95.91 from 104.35 at market close (as of 5:20 PM).
This is a significant earnings report as it's the first to break 13 years of continuous growth. Revenue was down 13%.
• Q2 EPS: $1.90, down 22% YoY, versus expectations of $1.99
• Q2 revenue: $50.6 billion, down 13% YoY, versus expectations of $52 billion
• Gross margin: 39.4% versus 40.8% last year and expectations of 39.47%
• iPhone unit sales: 51.2 million, down 17% YoY, versus expectations of 50.7 million
• iPhone ASP: $644.25, down 2% YoY, versus $651 expected
• iPad unit sales: 10.2 million, down 19% YoY, versus expectations of 9.4 million
• Mac unit sales: 4.03 million, down 11% YoY, versus expectations of 4.6 million
• Q3 revenue guidance: $41 billion and $43 billion, versus expectations of $47.35 billion
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#4I run a repair shop. We've repaired over 3,000 Apple devices for customers. We are always chatting with our customers, so we get a ton of feedback from them about what they're doing with their phones.
We hear a few things consistently:
1) Providers have switched from "free upgrades every 2 years" to a plan cost and a monthly phone cost, so people now really know how much their phone costs--and many would rather save the $30 a month than upgrade their phone. This started with T-Mobile a few years ago and now is how most phone plans work. This is having a huge impact on people's desire to buy new phones.
2) iPhone 5/5C/5S users have no desire to upgrade to a larger phone. The SE is going to solve some of this, but it'll more likely be a scenario of "I dropped my 5S in the toilet and it's completely dead, so I'll upgrade to a SE instead of dealing with the hassle of finding a legit used 5S." I don't expect to see a huge push toward the SE from current iPhone 5 users.
3) Repairs are so cheap, so easy and so effective. It's $79 for us to fix an iPhone 5/5C/5S screen right now, and we can fix it in less than 30 minutes typically. No reason to upgrade when your old one works just fine and you can get it fixed cheaply.
Interestingly, the SE screen is 1:1 compatible with the 5S screen, so the SE is coming out of the gate being cheap and easy to repair as well. I'm typically recommending the SE if people really want a new phone.
We also ask customers about 3D Touch (the new feature on the 6S/6S+) and if they're using it if they have a 6S. 99% of people have no idea what it is or how to use it. They bought a 6S/6S+ because it was pink. Yep, most of the 6S phones we see are rose gold, and that seems to be the #1 factor driving sales of that line. If they don't care about the pink and ask me what phone I recommend, I recommend buying a refurbished 6 over any of the 6S line. (We don't sell phones, so I have no horse in that race at all.)
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#5Are we past peak-smartphone or is this just noise from model release schedules?
It took PCs 20+ years to get good enough, smartphones managed the same in much less than 10 it seems.
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#6I run a repair shop. We've repaired over 3,000 Apple devices for customers. We are always chatting with our customers, so we get a ton of feedback from them about what they're doing with their phones. We hear a few things consistently: 1) Providers have switched from "free upgrades every 2 years" to a plan cost and a monthly phone cost, so people now really know how much their phone costs--and many would rather save…
(Lots of interesting data; upvoted.)
> It's $79 for us to fix an iPhone 5/5C/5S screen right now
Interesting, since I have a 5s with a broken screen glass that I haven't bothered getting fixed yet. :)
It used to be quite a bit more, I think? Have you figured out how to separate the glass (etc) from the actual display, or have replacement display+glass packages just gotten cheaper?
(If you are replacing the display - is there any significant performance difference between the stock display and the replacement display?)
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#7Are we past peak-smartphone or is this just noise from model release schedules? It took PCs 20+ years to get good enough, smartphones managed the same in much less than 10 it seems.
yet for the most part PCs dropped significantly in price but smartphones seem to be holding the 400+ range which is still woefully overpriced for most of the phone buying populace because not only are you putting out 400 bucks but usually under obligation to send forty to eighty more a month. That is a good chunk of the the lower and middle classes.
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#8For any exponential function comes time when its growth cannot be sustained. Smartphones are boring and mature, we haven't had killer app in ages - welcome to the PC market of 2007.
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#9Are we past peak-smartphone or is this just noise from model release schedules? It took PCs 20+ years to get good enough, smartphones managed the same in much less than 10 it seems.
yet for the most part PCs dropped significantly in price but smartphones seem to be holding the 400+ range which is still woefully overpriced for most of the phone buying populace because not only are you putting out 400 bucks but usually under obligation to send forty to eighty more a month. That is a good chunk of the the lower and middle classes.
I think you're forgetting to include Androids when you address "smartphones" as a whole...
Re: iPhone Sales Drop, and Apple’s 13-Year Surge Ebbs
#10So anyone thinking planned obsolesce might move itself up the Apple priority list? Their per quarter revenue is still massive, but Wall Street always expects more. At its current rate of stock buy back, Apple could buy back all of its stocks and go private in a few years. They could rid themselves of market fluctuations in regard to stock and pump out products while continuing making the ridiculous amounts or revenue and overcome the need to take shortcuts for the sake of Wall Streets obsession with non-stop growth.