
Apple Reports Fourth Quarter Results - hw
https://www.apple.com/newsroom/2018/11/apple-reports-fourth-quarter-results/
======
s3r3nity
Wow - Services grew 27% year-on-year to $10bn! For comparison, AWS made about
$6.8bn in Q3.

That's bananas. And it's more than just Apple Music / iCloud storage; it's the
"ecosystem lock-in" and the glue that keeps folks from bouncing away from
Apple hardware.

Congrats to the team!

~~~
FireBeyond
"Congrats to the team" for their effective "ecosystem lock-in"?

Congrats to them for effecting a 30% tax?

"Please sir, may I have another?"

~~~
Gorbzel
Congrats for actually creating an ecosystem worth using.

~~~
drb91
...for some people, for some ends.

~~~
lucisferre
Yeah, we get it, people who don't use Apple products exist. Not particularly
relevant to the discussion though.

~~~
drb91
It’s still worth noting that apple does not meet every need if people are
making carte blanche value statements.

~~~
inscionent
Very true. The comment that started this branch just derailed the conversation
by mocking apple developers/users, but if phrased as the first part of your
statement, could have been useful discourse.

~~~
drb91
I think the conversation was derailed plenty by offering congratulations to
people for successfully making money.

------
thecosas
Some pretty good charts here: [https://sixcolors.com/post/2018/11/reminder-
apple-financial-...](https://sixcolors.com/post/2018/11/reminder-apple-
financial-results-released-today/)

Interested to see Asymco's take. He was super close on the vast majority of
his predictions for this quarter according to his Twitter account
([https://twitter.com/asymco](https://twitter.com/asymco)).

Q1 looks like it's going to be bananas, especially with iPhone XR, new iPad
Pros, new Macs, etc.

~~~
krrrh
An interesting counterpoint is that the stock is down ~5% in after hours
trading on weak Q1 guidance. Apple’s guidance is always pretty conservative
though, and the market hasn’t gotten used to it.

~~~
synaesthesisx
The market isn't always very intelligent - these are absolutely incredible
numbers IMO

~~~
Analemma_
The market is reacting to the announcement that Apple will no longer break out
unit sales. Analysts hate having less information, and (rightfully, IMO) see
it as a sign that sales growth is over.

~~~
FighterMafia
*unit sales growth

------
yeldarb
What's up with them no longer reporting units going forward?

Did anyone catch on the call whether they will still report revenue and ASP by
product? If so, can't we get units by taking revenue/ASP?

If not... holy cow, they just became a whole lot more opaque. Revenue by
product line seems extremely important in making an investment decision.

~~~
muhneesh
I don't think they disclose revenue per SKU (e.g. XS, XS Max XR) - you would
need sales by SKU / ASP to get unit sales

~~~
yeldarb
Of course.

But will they say “$xx billion iPhone revenue, $y billion iPad revenue, $z
billion Mac revenue” or “$(xx+y+z) products revenue” next quarter?

~~~
muhneesh
They will still disclose sales by device segment

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bluedino
Tim knows what he’s doing, keeping the Mac prices a couple hundred dollars
higher than we’d like.

~~~
aphextron
He knows they can charge anything. When the iPhone X dropped at $999, even as
a total iOS person with the money to afford it I scoffed. But I knew they
would sell like crazy. Apple has a brand beyond any company's wildest
imaginations. It could be $2k and people would still want the latest iPhone no
matter what, if not just to be seen with it.

~~~
aczerepinski
I certainly don't care about being seen with a cool phone, but for somebody
like me who doesn't want Google tracking my every move, I don't see any
alternative to iPhones. So yes, they can charge whatever they want and I don't
have a choice.

~~~
caymanjim
You don't think Apple is tracking your every move too?

~~~
jacobolus
No, they are not. When customers set up a phone Apple presents clear choices
about the use of Location Services, Siri, etc., and various types of tracking
can be easily turned on or off at any time in the settings. Most people opt in
to some amount of tracking, e.g. for getting map directions, and using the
internet inherently involves sending data around, but they are all optional.
Applications must explicitly request customer permission at runtime to track
location, look at contact info, etc., and Apple takes action against apps
which collect customer information without authorization or abuse it.

Both first-party location/data tracking by Google, and underhanded tracking by
third-party apps on Android are pervasive, and more difficult to keep tabs on
/ opt out of.

Of course, the main people tracking your every move with any phone are the
phone company, anyone the phone company is selling or providing your data to,
and anyone operating a device which can trick your cell modem into connecting
to it (“stingrays”).

------
nappy
This reminds me acutely of Jobs' criticism of Apple during the the
Sculley/Spindler years: that the company got incredibly greedy and extracted
as much value from its customers as possible, without fully delivering on that
value.

~~~
rgovostes
On the services side of things, I pay Apple $8.50/mo for storage (split
between family members, so really much less than that) for all of my photos
and documents, and $7/mo for unlimited music (taking advantage of available
discounts).

For hardware, an iPhone XR is only $30 more than a Galaxy S9, and though it's
not quite an even comparison hardware-wise, that $30 difference buys you about
5 years of software updates, a suite of great creativity and productivity
apps, servers that sync and back up, etc. (You can probably get some of that
list from Google or Samsung, in exchange for your privacy.)

They could shrink their margins and have plenty, sure, but I'm not convinced
that it's really such a bad deal for customers.

~~~
bob_theslob646
>that $30 difference buys you about 5 years of software updates, a suite of
great creativity and productivity apps,

5 years of software updates? Can you post a source on that?

~~~
H4CK3RM4N
iOS 12 supports the 5s, which was released in 2013.

~~~
rgovostes
Right. Moreover, they announced at this September's iPhone announcement that
they would be supporting devices for longer, as part of their environmental
impact reduction efforts.

------
bdcravens
I thought Apple was going to crumble because they no longer considered the
needs of developers? /s

~~~
ryanwaggoner
Oh, for sure. The Pro users pissed off about the touchbar and lack of user-
replaceable memory are the canary in the coalmine, you’ll see! Apple might be
taking in billions per week now, but when all those Pro users stop telling
their friends to buy Mac, it’s all over!

------
adventured
$59.5b in net income ($70.9b in operating income) for the last four quarters,
staggering.

Their annual sales of $265b puts them ahead of the GDP of countries such as
Portugal, New Zealand, Egypt and Finland.

~~~
hop
.7 billion per day, mind blowing.

~~~
mikestew
One might say they're raking it in, but I do wonder how many people with rakes
it would take to rake up 0.7 billion dollars per day. Top of my head says, "a
small city". (Alright, back-of-the-napkin whizzes...)

~~~
why_only_15
To make the number as big as we can, we can use pennies. $700M/day = $8101/s =
810,100 pennies @ 2.5g per = 2025kg or 2 metric tons of pennies per second. I
honestly have no idea how many pennies a person can rake per second. Pennies
are pretty small, so maybe a few thousand at a time with a special rake? I'm
imagining that you would have to rake these pennies 100 meters at about 1
meter per second (average walking speed 1.4 - having to rake pennies), so we
would have to be raking at any given time 100 seconds worth of pennies (=81M).
If a given person can rake a few thousand at a time, then that's about 40,000
people, approximately a small city

------
nodesocket
> Apple will stop reporting how many iPhones, Macs and iPads it sells each
> quarter, beginning with the December quarter, Apple CFO Luca Maestri said on
> the company’s earnings call Thursday.

> "If you look at our net income during the last three years, if you look at
> our stock price in the last three years, there’s no correlation to the units
> sold in any given period."

As a shareholder, this strikes me as a bit strange and concerning. Why stop
reporting how many of each product you sold? It suggests that moving forward
sales and business is going to decline and they are trying to be more opaque
and hide this fact.

~~~
IBM
It will force the market to stop viewing them as a hardware company like Dell
or HP and instead view them as the ecosystem company they are. That's why
they're doing it.

------
genie514
I wonder at what price people will consider switching from iOS to Android.
Seems like they sold an incredible number of iPhones at ASPs higher than
analyst predictions.

~~~
Synaesthesia
What Apple has realised is there is an entire class of people who simply don’t
mind paying $70 a month or whatever it costs to have a new iPhone, even though
they’re not competitive in price, it doesn’t matter, and so Apple gets to make
these huge profits.

~~~
anthonybsd
>even though they’re not competitive in price

Explain to me how having the fastest silicone in the business is not
"competitive" in price? I mean if you are the top dog, you kinda get to set
the stage, no?

~~~
DerekL
You mean “silicon”, not “silicone”. (Or maybe you do mean “silicone”?)

~~~
anthonybsd
Right you are, silicon. Thank you. Not caulking material :)

------
vizzah
AAPL just lost it's 1 trillion market cap. Ouch.

~~~
philjohn
Share price going down after market when an earning release drops is hardly
new.

------
ksec
I wish Apple brings their iPhone Upgrade Program to outside US and Apple Cash
to Outside US as well.

------
chrisdhoover
Bless this thread. May the gods of RSUs shine a bright light of good fortune.

------
askaboutit
We can all thank googles incredibly lack of privacy for Apple iOS success. I’m
sure most people use an iPhone because it’s simple and because the value on
privacy is greater.

Other Android vendors should sue google for ruining any chances of actual
competition.

~~~
saagarjha
I think most people use iOS because they prefer it. The fact that iOS
generally values privacy more is an added benefit.

------
brooklyntribe
And of course AH, AAPL crashing, down -14 already.

~~~
jballanc
"Buy on the rumor, sell on the news" is a tradition for Apple's Quarterly
reports going back to at _least_ 2004 (by my own memory).

------
samfisher83
I guess even if the phone sales stay flat they can raise the price and get
more revenue/profits. This would a great economic experiment. How inelastic
are iphone sales.

------
readitone
From years i am speculating about this thing: Apple is a service company.
Computers/Tablets/Phones everything is just a locked box for profit. I don't
mind profit at all. But clearly in my view so much money can be used to
deliver something outstanding for a reasonable price. The Apple tax from the
past was: More money for highest quality of hardware and software and
unrivaled reliability. I loved this and not only used their products, i was
evangelist for the brand. The Apple of today is a service company: The Apple
tax is abomination and in my view disrespectful toward users. Slowing down
hardware update cycles, making obvious bad design decision, locking down Mac
Os step by step and blending it with iOS (there is no Mac Os software
division). So shareholders are happy, management is happy, users are .... The
fact that i can migrate to Ubuntu Mate after years of using Mac OS X speaks
enough. I intend to evangelize the Open Source and Linux to the max. Software
is the key to the Future of Human Kind and the idea that some monopolistic
company wants control is ugly and old-fashioned. So if Apple wants to redeem
them selves in the eyes of professionals here are some recommendations: Stop
over-hyping every product. Understand that iOS is companion os. Stop 30
percent tax on developers, make reliable hardware again, fix Mac Book
Keyboard, again fix it now. Stop overpricing the iPhone. But wait, who cares
about this, obviously nobody. So sorry for my rant...

~~~
charlesism

        The Apple of today is a service company
    

No, they're a company who are nervous about where their growth will come from.
They aspire to be a "Services" company, but unfortunately they aren't much
good at it (see the usual list of failures. eg: Maps, Siri, etc). But
"Services" is a nice murky bucket into which they can sweep various kinds of
revenue, and still appear to be innovating.

Do you remember this news story? [https://www.cnbc.com/2017/08/14/google-
paying-apple-3-billio...](https://www.cnbc.com/2017/08/14/google-paying-
apple-3-billion-to-remain-default-search--bernstein.html)

The key quote being "Google's licensing fees make up a large bulk of Apple's
services business"

~~~
ryanwaggoner
Actually, the key takeaway is that some analyst last year thought they were
paying $3 billion. They’re making $10 billion on services now. Hardly seems
that concerning, especially given the growth and the fact that you have no
idea what Google is paying them. I also fail to see how a huge and rapidly
growing services segment indicates that they’re no longer innovating.
Especially given their total dominance and revenue growth in their other
categories.

Your comments all over this thread kinda just make it seem like you have an ax
to grind against Apple.

~~~
charlesism

       Your comments all over this thread kinda just make it seem like you have an ax to grind against Apple. 
    

I'll assume you're not really interested in debating my motivations for
posting here. That sounds like a good way to just get into a petty internet
argument.

Other than that, you make some good points.

No, I don't see Apple innovating in ways that matter to me, to be honest. Of
course, that's a messy argument. They have changed plenty of things since SJ
passed. Those products appeal to many people. So I don't know how to quantify
it. They've certainly made a lot of money, so there's that.

As for services and Apple's focus on it: is it helping anybody? It doesn't
help me. Instead I get nag screens and advertisements I didn't used to get. I
get pushed to a "subscription model" I don't want. I get second rate versions
of Spotify, Google Maps.

And I've seen Apple evolve from eWorld through iTools through dotMac,
MobileMe, iCloud... I'm not the only person whose mouth those services left
with a bad taste.

If Apple truly is, first and foremost, a "services company" as the OP
pondered, then I think they _really_ have their work cut for them.

