“We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth,” said Tim Cook, Apple’s CEO. “Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline.”
“Our strong business performance drove revenue growth in each of our geographic segments, net income of $11.5 billion, and operating cash flow of $14.5 billion,” said Luca Maestri, Apple’s CFO. “We returned almost $25 billion to investors through our capital return program during the quarter, including $20 billion in share repurchases.”
Apple provided the following guidance for its fiscal 2018 fourth quarter:
revenue between $60 billion and $62 billion
gross margin between 38 percent and 38.5 percent
operating expenses between $7.95 billion and $8.05 billion
other income/(expense) of $300 million
tax rate of approximately 15 percent before discrete items
Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock. The dividend is payable on August 16, 2018 to shareholders of record as of the close of business on August 13, 2018.
iPhone X: All screen. Introducing Face ID so you can unlock with a look. A11 Bionic, the most powerful and smartest chip ever in a smartphone. Radically new cameras with Portrait Lighting. Wireless charging, animojis and augmented reality. Meet iPhone X. Say hello to the future. Learn more at http://apple.co/2f2ujYA
Things the iPhone Helped Destroy | The New York Times:
Video published on Sep 12, 2017: Since it was introduced 10 years ago, the iPhone has been a great disrupter, heralding an end to everything from paper maps to small talk. Here’s a (slightly) tongue-in-cheek look at all the things this ubiquitous gadget has laid to waste.
Tech Review (TR 2017-09-02)--Domain Mondo's weekly review of tech news: Features • 1) Apple Event Sept 12: New iPhones, Apple Watch & Apple TV, 2) China & Cryptocurrency, 3) Amazon Alexa + Microsoft Cortana, 4) Investing: US GDP, $AAPL, Uber IPO, Intel $INTC, Sprint $S Short, Disney $DIS Dinosaur ABC TV, Forecast of Doom?, 5) ICYMI Tech News: Google & EU Antitrust, US DOJ Probes Uber, Hurricane Harvey and Weather Prediction Models.
3) Amazon Alexa + Microsoft Cortana: "Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ: MSFT) announced ... Alexa will [later this year] be able to talk to Cortana, and Cortana will be able to talk to Alexa. You will be able to turn to your Echo device and say, “Alexa, open Cortana,” or turn to your Windows 10 device and say, “Cortana, open Alexa.” Alexa customers will be able to access Cortana’s unique features like booking a meeting or accessing work calendars, reminding you to pick up flowers on your way home, or reading your work email – all using just your voice. Similarly, Cortana customers can ask Alexa to control their smart home devices, shop on Amazon.com, interact with many of the more than 20,000 skills built by third-party developers, and much more."--Amazon Press Release Aug. 30, 2017.
4) Investing
US revised second-quarter GDP up 3.0% vs 2.7% rise expected | cnbc.com: "The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years. There are signs that the momentum was sustained at the start of the third quarter. Gross domestic product [GDP] increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said."
Uber IPO is 18-36 months away says new Uber CEO Khosrowshahi--WSJ.com.
Intel $INTC | SeekingAlpha.com: Intel's Moat Is No Joke, And AMD Should Be Worried: "... Intel's immense R&D budget gives it a moat the market is forgetting. The company trades cheap, carries a solid yield and offers significant growth potential ..."
What made the rain in Hurricane Harvey so extreme?WashingtonsBlog.com: A combination of unusuallyhigh rain rates and long duration resulted in a very large area with 30 to 45 inches of rain in a few days "... One final remarkable aspect of Hurricane Harvey’s rainfall is how accurate numerical weather predictionmodels – and the human forecasters who use them to make official forecasts – were at highlighting the incredible precipitation accumulations. Medium-range forecast models at least a week in advance were showing Harvey stalling out along the Texas coast and producing extreme rainfall ..." See also: Don’t get duped: How to avoid post-Harvey charity scams | WGNO.com.
UPDATE August 20, 2015: People are giving up on Apple Music survey says – 48% of “free trial” users stopped using it while only 11 percent of iOS users have tried the streaming service so far, according to MusicWatch and The Verge via @verge #Apple $AAPL
UPDATE (July 26, 2015): Why the iPhone matters to Apple - Business Insider (Jul. 26, 2015): "... Apple's stock tanked globally ... People are clearly worried that Apple's 'golden goose' is in trouble ... there was one key metric that fell below Wall Street's expectations: The number of iPhone units sold ..." (emphasis added) UPDATE: July 23, 2015: Apple Music is described as a "nightmare"--Apple Music is a nightmare and I’m done with it: "At some point, enough is enough. That time has come for me—Apple Music is just too much of a hassle to be bothered with. Nobody I’ve spoken at Apple or outside the company has any idea how to fix it, so the chances of a positive outcome seem slim to none." (read more at the link above) UPDATE July 21, 2015: Bloomberg reports today Apple Poised for $50 Billion Loss of Stock Market Value: "The biggest technology rally since October was knocked cold, as disappointing earnings reports punished Microsoft Corp. and left Apple Inc. in danger of its worst-ever loss of market value. Five days after Google Inc.’s earnings sparked the largest one-day increase in market capitalization, computer and software shares are tumbling ... Apple, the world’s most valuable company, dropped 6.7 percent, a slump that would wipe more than $50 billion from its value... Apple slid in late trading after iPhone shipments for the fiscal third quarter and the company’s revenue forecast for the current period missed analysts’ projections, raising questions over whether demand for the device has peaked. If the stock sinks that much in regular trading, the hit to market cap would be the second-biggest in the company’s history, after a $59.6 billion drop on Jan. 24, 2013." Check after-hours trading on NASDAQ: AAPL UPDATE (July 20, 2015): Skepticism remains about the Apple Watch - The New York Times (July 19, 2015)-"... lack of support from Facebook — and from other popular app makers like Snapchat and Google, which also have few if any apps for Apple Watch — underscores the skepticism that remains in the technology community about the wearable device ..." (emphasis added)
UPDATE (July 9, 2015): The Chilling Thing Gartner Just Said ...| Wolf Street: "MarketWatch reported that [Apple Watch] sales, based on data from Slice, might have plunged 90% since that week, to fewer than 20,000 watches a day, and on some days fewer than 10,000. “The value of a smartwatch for the average user is still not compelling enough,” explained IT research and advisory company Gartner in its report on worldwide electronic device shipments." Gartner Says Worldwide Device Shipments to Grow 1.5 Percent, to Reach 2.5 Billion Units in 2015:The mobile phone market growth rate is expected to slow down to 3.3 percent growth in 2015. "The global market has been affected by a weaker performance in China. We have witnessed fewer and fewer first time buyers in China, a sign that the mobile phone market in there is reaching saturation. 2005-2015 Search Trends: Blue-AppleWatch; Red-iPod; Orange-iPad; Green-iPhone; Purple-AppleMusic. Source: Search Terms via GoogleTrends (data as of July 5, 2015; forecast shown as dashed lines)
2015 Search Terms: Blue-AppleWatch; Red-iPod; Orange-iPad; Green-iPhone; Purple-AppleMusic.
Source: GoogleTrends (data as of July 5, 2015)
So far in 2015, Apple Watch and Apple Music rank with Apple's almost goneiPod in search trends--iPhone (green line) still a very popular search term--but for how long? See: Domain Mondo: The Problem With Apple $AAPL (June 8, 2015) andSafari is the new IE | Read the Tea Leaves: "In recent years, Apple’s strategy towards the web can most charitably be described as “benevolent neglect.” Although performance has been improving significantly with JSCore and the new WKWebView, the emerging features of the web platform – offline storage, push notifications, and “installable” webapps – have been notably absent on Safari" (emphasis added). Of course we really won't know about Apple Music until after the free three-month trial period is over, although some music industry insiders are already calling it a failure.
And Apple stock? The picture doesn't look pretty since the June 8th Apple WWDC 2015 keynote (June 8th was the launch date of Apple Music; Apple Watch launched April 24, 2015):
Apple stock AAPL since Apple Music launch of June 8, 2015. Chart source: google.com
Apple stock AAPL was at $132.65 the day before Apple Watch launched, a price it hasn't seen since--
the launch of two major products and Apple stock is down! Chart source: google.com
Tim Cook is a supply chain guy. Jony Ive is a hardware design guru. As noted in Domain Mondo's first post in this series, Apple is falling behind in technology. At some point, consumers will start to notice, if they haven't already. Note: As noted above, this is the second in a series of articles on Apple, its products and services, and AAPL stock (disclaimer at the bottom of this web page and here.)
June 22 -- Bloomberg Businessweek's Paul Barrett reports on how Taylor Swift forced Apple to back away from an earlier decision not to pay royalties for songs played on its new streaming-music service during a three-month free trial. He speaks on “Bloomberg Markets.”
3rd UPDATE: Apple iPhone sales and revenue significantly declined in the quarter ending in March, 2015, as compared to the previous quarter--statistic source further below at iPhone UPDATE. 2nd UPDATE: June 16, 2015, see:Record labels attack Apple deals that would leave them 'completely screwed' - Telegraph UPDATE June 10, 2015: Apple Music, a new music streaming service discussed further below, is now the subject of antitrustinvestigations--It was reported this morning in the Wall Street Journal and Seeking Alpha that both the Attorney General (AG) of New York and of Connecticut are now investigating whether deals made by Apple for its new music service violated Antitrust laws. Apparently this joint investigation is probing whether Apple pressured music labelsor whetherthe labels conspired with Apple and one another against popular freemium services such as Spotify in order to favor Apple Music. New York AG Eric Schneiderman and Connecticut AG George Jepsen were among a group of attorneys generals who in 2013 sued Apple for "conspiring to raise the prices of e-books" for which Apple agreed to pay a $450 million settlement.
UPDATE June 9, 2015, 1PM EDT (US): Can Apple Music Lure Customers Away From Spotify?Technalysis Research President Bob O'Donnell discusses Apple's Worldwide Developers Conference with Bloomberg's Angie Lau on Bloomberg Asia's "First Up" in the video above.
Apple WWDC15 message - source: apple.com
Apple: "Live stream of Apple's WWDC 2015 keynote address, viewable in Safari and on Apple TV — Our live broadcast begins at 10 a.m. PDT. Follow along and share your favorite moments from today's #AppleLive event. Live streaming video requires Safari 6.0.5 or later on OS X v10.8.5 or later; Safari on iOS 6.0 or later." (emphasis added) source: http://www.apple.com/live/2015-june-event/
Of course, one can just do what Domain Mondo did--watch the whole thing (Apple WWDC15 Keynote) LIVE at twit.tv, via a Chrome browser running on a Win7 laptop.
Screenshot of Apple stock 30 minutes into Apple WWDC 2015 Keynote (source: google.com)
check current price here
The problem with Apple? It's falling behind. Things may "look" good today, but underneath, the "rot" has begun--for background reference read The Innovator's Dilemma--
Apple Watch? IT’S A LOUSY WATCH: "I’m completely flummoxed how Apple screwed up so bad. Really makes me believe the company is doomed. Because there’s no Steve Jobs, there’s no VISIONARY, no one to say what’s right or wrong, when to go or stop."--Bob Lefsetz
Apple Music? Apple is "strong-arming" (quote from Leo Laporte) its Beats music streaming onto iPhone and iPad users--will strong-arming succeed?--Apple Streaming - Lefsetz:"If Apple were all-powerful, iTunes Radio would have killed Pandora ... the public has no loyalty. It abandoned MySpace for Facebook… advertising and promotion don’t win online, it’s all word of mouth for excellent products. Instagram and Snapchat were not sold by hype. Why does everybody believe that a big press story will put Apple streaming over the top?"--In other words, musictoday is all about YouTube, Spotify, free or freemium online and paid LIVE.
Other Apple Services? You can get freeor cheaper, and usually superior, services from Google, Facebook, Amazon, et al, orpay a premium for the Apple brand and its often inferior services--e.g., Apple maps.
Apple App Store?--very profitable today but native apps are so yesterday--that is why Apple is abandoning its iTunes music store for its streaming service (see Apple Music above).
iPhone? Apple's Crown Jewel today but for how much longer? Voice service is in the process of moving to 4G LTE (VoLTE)--soon all phones will work anywhere with any carrier with just one chip for everything--voice and data. Expect Amazon to give away free phones to its Prime Customers. Google is not far behind.
UPDATE: Statistic: Apple's iPhone sales declined by over 10 million units, and its iPhone revenue declined by over 10 billion dollars, in its most recently reported quarter (ending in March, 2015), as compared to the previous quarter.
Affirmed Networks CEO Hassan Ahmed and Estimize CEO Leigh Drogen discuss Apple's second-quarter earnings with Bloomberg's Alix Steel and Cory Johnson on "Street Smart," April 27th.
Products discussed: iPhone, Apple Watch, MacBook, iPad
"We’re now halfway through fiscal 2015 and our year to date results have been simply staggering. We sold over 135 million iPhones, 34 million iPads, and 10 million Macs in the first six months of the year. Our revenue has grown by 28% to over $132 billion, net income has increased 36% to over $31 billion, and EPS has grown by 44%."--Apple's (AAPL) CEO Tim Cook on Q2 2015Results - Earnings Call Transcript | Seeking Alpha
Apple - Press Info - Apple Reports Record Second Quarter Results: "April 27, 2015—Apple® today announced financial results for its fiscal 2015 second quarter ended March 28, 2015. The Company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. These results compare to revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share, in the year-ago quarter. Gross margin was 40.8 percent compared to 39.3 percent in the year-ago quarter. International sales accounted for 69 percent of the quarter’s revenue. The growth was fueled by record second quarter sales of iPhone® and Mac® and all-time record performance of the App Store℠..."
Apple is providing the following guidance for its fiscal 2015 third quarter:
revenue between $46 billion and $48 billion
gross margin between 38.5 percent and 39.5 percent
operating expenses between $5.65 billion and $5.75 billion
"…. [Our] focus has been on trying our very best to develop a product that is beautiful and useful on. I mean quite honestly when we started work on the iPhone, the motivation there was ... we wanted a better phone. When we worked on the watch the motivations were completely different. We happen to love watches … collected mechanical watches for many years … it was because we saw that the risk was a fabulous place for technology and so the motivation was very different … I think you know the wrist is and has always been for literally hundreds if he is one of the best places on the body to to put an object … we can only imagine even how much we upgrade our phones this is going to need an upgrade … How do you think most people are going to use the new watch?People will use it for very different reasons. To some people it will be … the health and fitness capabilities and … other people have been really intrigued by some of the perhaps more intuitive, more personal ways of communicating with other people that wear the watch. I see this is one of the first times that we could make some assumptions that somebody else has this product intimately connected with them for most of the day. You can't make that assumption with the phone and so you can actually communicate … you can actually communicate in some new ways and I think this is just the beginning. But I think we've had some very encouraging feedback … we chose that material [gold] because we loved it and we didn't just buy off the shelf -- we developed our own gold and we love these attributes and how it felt … in the real world sadly so many objects, so much a manufactured environment testifies to carelessness ... something that was built to a price point or to a schedule … But you know there's no doubt that you are now producing things that may be more desirable than traditional luxury to consumers particularly the younger consumers, don't you think that's cool? I don't know, we'll see. I think that what I do know … our intent has remained the same and is consistent, which has been to try and take what is remarkable technology in terms of its capability and its utility and to make it more and more personal and that's what we're trying to do ... I hope people will like the watch and will find it a personal and beautiful … product …"
