
Apple Reports Record First Quarter Results - chollida1
https://www.apple.com/newsroom/2020/01/apple-reports-record-first-quarter-results/
======
chollida1
Notes:

\- for first time seeing analysts excited about other products, watch and
airpods as being real drivers of bottom line revenue!!!

\- interesting note from Bloomberg tech reporter "Apple’s new revenue strategy
isn’t a bad one. It’s, basically, sell the customer an iPhone every three to
five years, and make a bunch of money in the years between by selling them a
new Apple Watch or AirPods (which only last about three years tops before you
need a new pair -- batteries!) and services. If a user subscribes to all of
Apple’s services for two years straight, that’s about equal to revenue from a
new iPhone. So in those cases, if that user doesn’t buy a new iPhone for a
couple years, it’s not a big deal."

\- apples done so well lately that the average analysts has a target price 5%
below what apple is currently trading at

\- they manufacture iphones 400 km from the center of the coronavirus
outbreak, see if this is mentioned, also about 18% of apple revenue so China
matters

\- want to see what their effective tax rate is

Numbers:

\- stocks almost back to record highs before reporting, after reporting it
shot way past!!

\- 1Q Revenue is $91.8B vs estimates of $88.38B!!!!!!

\- 1Q EPS is $4.99 vs estimates of$4.56!!!!!

\- wearables was $10 vs $7.3 last year( apple just continues to create $10+
billion dollar business every 3-5 years. Use to be that only MSFT could do
that and GOOG spent heavily trying to do that

\- iphone revenue for 1Q is $55.97

\- service revenue for 1Q is $12.72

\- declines in both mac($7.1 vs $7.4 last year) and iPad sales($6 vs %6.7 last
year)

\- iphone sales up everywhere except Japan

Numbers that really impress

\- Cash/Equivalents have doubled from last year, that funds a lot of money
loosing streaming shows

\- keeping in mind they bought back $37B in stock this year

\- almost $100B in term debt

Supply Chain:

\- Qurvo up 1%

\- Skyworks up 1%

\- Cirrus up 3%

~~~
pbreit
"sell the customer an iPhone every three to five years"

Aren't lots of people on monthly plans now with "free" annual upgrades?

~~~
__abc
I'm on this plan (the zero interest loan plan designed to drive an annual
upgrade) and it isn't exactly free.

The loan is absolutely zero interest, but I get ~$200 in fees when I upgrade
from AT&T. It's enough where I didn't upgrade from the X to the 11.

I have also since switched to Google Fi and don't know if that same fee exists
with them ....

~~~
reaperducer
_I get ~$200 in fees when I upgrade from AT &T_

Ouch. Maybe it's your plan?

When I upgrade iPhones (financed through Apple) on AT&T, the fee is $35.

"Line activation fee" or some such lie. Why do I have to pay a fee to activate
a line that's already active?

~~~
majormajor
How do you get hit with this fee? I've not done any financing, but I've
updated iPhones several times on Tmobile (2013-2016) and Verizon (2018-2019)
without even having to tell the carrier...

~~~
lotsofpulp
If you use the Apple upgrade program, all the mobile networks charge an
activation fee.

The only way to avoid the activation fee is to swap the SIM by yourself, I
think.

~~~
scarface74
We didn't get an activation fee from T-mobile. We also didn't swap the sim.

~~~
lotsofpulp
Maybe I'm wrong about Tmobile, I can't find anything via searching about it,
but Verizon and ATT of course charge it. I thought I had heard Sprint and
Tmobile do too since the SIM comes with the phone and they have an excuse to
charge, but they might be nicer than Verizon and ATT.

------
jandrewrogers
The astounding thing about Apple is not the scale at which they operate,
though that is impressive. It is the rate at which they still grow revenue
concurrent with insane profitability and revenue diversification at that
scale. Incredible business execution.

Their slow creep into healthcare is a particularly interesting longterm play,
due to the size of the market if nothing else.

~~~
ardit33
I was playing indoor soccer, and I noticed one of the opposing players had an
apple watch on. I wanted to complain the ref about it (jewelry and wearables
are not allowed during games), but then I realized that at least 1/3rd of the
players had some kind of watch (including my teammates).

You didn't see them during games a couple of years ago... so I guess they
opened a new market and people are used to them.

~~~
outoftheabyss
You have a ref for indoor soccer? And rules on what you can wear? Indoor
soccer to me was always just a casual affair, besides the odd tasty tackle and
fall out

~~~
stevehawk
A lot of educational leagues have refs and rules on attire. For instance,
every rec basketball league I've ever been in banned shorts with pockets
because of the risk of defenders snagging/dislocating/breaking fingers and had
rules on finger nail length to reduce incidental scratches.

------
kotrunga
Just a little sad to see how much value they put into the iPhone and services
while iPad and Mac software is lacking. Obviously, they're making money, and
that's their goal. However, I think sales could be boosted for the iPads and
Macs if they increased the quality of the software for those devices.

Great example explanation within here:
[https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_...](https://daringfireball.net/2020/01/the_ipad_awkwardly_turns_10)

~~~
mooreds
Do you think it'd make sense to spin off the mac business, or is it too
integrated (with the app store)?

~~~
wtmt
It might make sense to assign the Mac to a dedicated team at the top executive
level who’s only responsibility is to grow and update the Mac line. Except for
MacBook Pro and the iMac, which seem to get some sort of periodic updates, the
Mac mini and Mac Pro don’t get enough attention. The Mac mini hasn’t seen any
updates since the latest update was launched in 2018. We’ll have to see how
the brand new Mac Pro fares in the next two years to get a sense of Apple’s
commitment to its entire Mac lineup.

~~~
tonyedgecombe
I'm not sure that is a huge problem for the Mac Mini, it was released in late
2018 so we are only at about 18 months now. We are long past the stage where
every new operating system version demanded new hardware.

~~~
lostlogin
New hardware would be great, particularly in the Mini. It has more CPU than
anything else that size that I can find and with an internal power supply. The
lack of compelling upgrades made by Intel seems to be the main problem.

The Hades Canyon Nucs come close, but are larger, have a power brick and are
not my taste in design. But the 2x nic, graphics, storage options and price
are compelling.

Bring on ARM.

~~~
amdavidson
I don't see where you're making the case that they need to update.

They're better than anything you can find in the bracket that you place them
in.

Sure, everything can always be better but I don't see much market pressure
forcing it.

------
40acres
Apple finally decided to start capturing some of the value add of the iPhone
itself (App store fees are solid revenue I suppose but a tiny fraction of the
overall potential value of an iPhone) and now somehow an unstoppable force has
gotten even more successful. I don't think I've ever seen such a tentpole
product. No doubt in my mind that Apple will be the one takes AR and possibly
VR to the next level.

~~~
WalterBright
> I don't think I've ever seen such a tentpole product.

Microsoft DOS and then Windows.

~~~
brantonb
The head of Windows and Office used to joke at the all hands meetings about
making 120% of the company’s profits.

------
raydev
12% drop for the iPads. Unsurprising.

The people who want the lower end of the price range are still perfectly happy
with their 5-7 year old iPads. Top of the line suffers in that most people in
that market are probably fine or even better off with a MacBook Air/Pro, and
they may even save a few dollars instead of buying a Smart Keyboard/folio.

Related to the 10 year anniversary: the iPad should be so much more capable
than it is. I don't think the people behind shipping the first iteration are
happy with its current state a decade later.

~~~
chooseaname
I just bought a mini 5. Not sure what end it sits on, but it’s great. So fast.

~~~
tyre
What do you use it for?

~~~
SenHeng
I also just got the mini5 to replace my mini4. I use it mostly for reading,
web surfing when outside, calendar stuff, tasks management, sketching.

Main reason I got the mini5 despite its similarity to the mini4 is that I
wanted to use the pencil while sketching.

Come to think of it, I probably use it more than my iPhone.

~~~
leokennis
Is the 5 appreciatively faster than the 4?

I use a Mini 4 now and it’s fine, but compared to my iPhone 11 feels a lot
slower.

~~~
mcphage
Yeah, the iPad mini 4 has an A8 processor, and the mini 5 came out several
years later, with an A12 processor.

------
mindfulhack
And they haven't even re-revolutionised computers again by putting their
incredible low-nanometer and can-be-fanless A-series chips into their Mac
line-up. That's coming up this year.

I am very impressed and hope they've put their MacBook hardware defects era
behind them. Typing this on an awesome 16-inch MBP.

~~~
jasondclinton
Source for the A chips in Mac line-up?

~~~
threeseed
Lots of suspicion because of the move to force App Store apps to have Bitcode
enabled for submission. This would allow them to potentially transpile x86
apps for ARM:

[https://lowlevelbits.org/bitcode-
demystified/](https://lowlevelbits.org/bitcode-demystified/)

Also as we've seen with iPad Pro + AWS M6G instances the performance is now
there to power desktops.

~~~
scarface74
This is not true. It would not allow them to transpile between architectures.

This myth was dispelled by no less than Chris Lattner on ATP.

Even though he did later admit that he wasn’t completely being honest. Part of
the purpose of the bitcode requirement for the Watch was that Apple knew that
they would be shipping a 64 bit chip for the Watch two years later.

[https://atp.fm/205-chris-lattner-interview-
transcript](https://atp.fm/205-chris-lattner-interview-transcript)

 _Bitcode is not [12:30] a magic solution, though. You can 't take a 32-bit
app, for example, and run it on a 64-bit device. That kind of portability
isn’t something that Bitcode can give you, notably because that is something
that's visible in C. As you're writing C code, you can write #ifdef pointer
size equals 32, and that’s something that Bitcode can't abstract over. It's
useful for very specific, low-level kinds of enhancements, but it isn't a
panacea that makes everything [13:00] magically portable.

John Siracusa: The same thing I would assume for architecture changes,
especially if there was an endian difference, because endianness is visible
from the C world, so you can't target different endianness?

Chris Lattner: Yep. It's not something that magically solves all portability
problems, but it is very useful for specific problems that Apple's faced in
the past._

~~~
threeseed
All of the OSX apps are 64-bit.

And ARM I believe has runtime-selectable endianness.

~~~
scarface74
He wasn’t saying that the only difficulty in using bitcode was translating
from 32 bit to 64 bit and endianness but just thst was one of the issues.

------
achow
I was confused why this is Q1 2020 results and not Q4 2019 result (since sales
figure is till Dec 28 2019).

 _Non-Standard Quarters_

 _For a variety of reasons, some public companies will use a non-standard or
non-calendar quarterly reporting system. For example, Walmart 's first quarter
is February, March, and April; Apple Inc's Q1 is October, November, and
December; Microsoft Corporation's Q1 is July, August, and September._

[https://www.investopedia.com/terms/q/quarter.asp](https://www.investopedia.com/terms/q/quarter.asp)

------
OrangeMango
Mac sales drop is fair small - 3% or so. The iPad saw a drop of 12% or so.
Fairly significant.

~~~
_bxg1
Surprising (concerning?) that Mac sales didn't go _up_ , given the release of
the Mac Pro and the MBP 16", both of which were poised to inject new life into
the line.

~~~
pastor_elm
16" pros are not popular. Nobody wants to lug that thing around. The Mac Pro
is just too expensive. I know people who used to buy Mac Pros and were forced
to get iMacs.

~~~
whycombagator
As someone who has been wanting to buy a MBP for several years, the 16" MBP is
the best laptop they've made since the 2015 MBP.

That being said, I agree with you. It's too large.

There's also still a lot of stuff I don't care for (bezel size, massive
trackpad, still has an underwhelming keyboard, lack of port diversity,
touchbar), but it's decent enough for me to pull the trigger if it were in a
smaller package.

They gave us the esc key back, and moved away from the butterfly mechanism,
etc. If it was just in a form factor similar to that of comparable
dell/lenovos (<= 14"), I'd buy one and I feel like I'm not the only one.

That being said, I also echo the price concerns. You can easily spec out a 16"
to over $3k - that's a lot for a laptop.

~~~
_bxg1
> It's too large.

For what it's worth, it's actually slightly smaller on every dimension than
the 15" 2015 MBP, even with the extra diagonal-inch of screen space:

    
    
      358.9 mm × 247.1 mm × 18.0 mm
    

vs

    
    
      357.9 mm x 245.9 mm x 16.2 mm
    

Anyway, I'm sure the keyboard updates will make it to the 13" soon.

------
jungletime
I've never owned an iPhone, but after the numerous usability problems I've had
with my Samsung S10e phone. I think I'll be switching too next cycle.

~~~
beagle3
I'm on my 3rd iPhone now (3G -> 4S -> 6S) in 12 years. Some people like to
upgrade their phone every couple of years, and that's fine - but some don't --
and no Android is useful for these people.

My >5 year old 6S runs the latest-and-greatest OS 13 revision, it is still
smooth and useful and does essentially everything I need. It's slower than a
new model, has a much lesser camera, and the NFC is useful exclusively for
Apple pay. But it's still perfectly useful for me for now.

Usability is subjective, and you may like iOS more, or not - but longevity is
objective. If you want to stay secure and able to run latest apps (some of
which are becoming essential for some of us - e.g. taxi hailing apps in
various jurisdictions), you have to upgrade your Android every 2 years, or
your iPhone every 5.

~~~
lorenzhs
Not to nitpick, but the 6s was released in the autumn of 2015, so it's over 4
but not 5 years old. Don't get me wrong though, I'm also still really happy
with my iPhone 7. I think I'd like the new cameras a lot, but that's not worth
the price of upgrading for me. I think I'll get a new battery soon, then I
should be good for another two years.

~~~
beagle3
You are right. only 4 1/3 so far. got it in sep or oct 2015, the first week it
became available (and had the bad battery ...).

------
InterestBazinga
Tim Cook has added $1 trillion dollars to Apple's market cap since he took
over.

Apple's ability to sell a new IPhone every year is honestly the stuff of
legends, it almost defies logic but they keep on executing it.

It is a bit interesting to see misses from Macs, IPads and services. Which
tells you Apple is still very much an iphone story.

~~~
Aperocky
> Apple's ability to sell a new iPhone every year

Anecdotally, it happens to me because the old one broke/discharge battery at
alarming rate/charging port stops working/home button (back when it was
physical) stuck

I'm much more satisfied with the mac line sans the immovable blocks
masquerading as keyboard.

EDIT: I owned 5 iPhones over 10 years, so it's not yearly. My iPhone 4 lasted
5 years, the rest are not so fortunate.

~~~
whynotminot
What're you doing to your iPhones? I end up holding on to mine for 3+ years
each because I can't kill the damn things and it feels so unnecessarily
extravagant to upgrade more often.

~~~
favorited
Follow-up– if all these problems are necessitating yearly upgrades, why aren't
you getting your phones fixed under their 1-year warrantee? Batteries, stuck
buttons/switches, charging ports, etc. should all be covered.

------
alexnewman
congrats

------
tomThom
cold, almost want to get the razor out and get myself some wool here.

------
onetimemanytime
Wow! AAPL has been buried so many times, only to surprise people.
$91,000,000,000 in sales over 3 months, we're almost talking about real money
:)

------
vsareto
Does Apple ever have any chance of breaking into the enterprise space and
start taking some of the Active Directory marketshare? Maybe a cloud IAM +
productivity suite solution?

~~~
scarface74
Why would they want to? They are already well entrenched in the part of the
enterprise they want to be in - the mobile device market.

The AD market is not exactly hugely profitable and it takes enterprise sales
people to push it. That’s not the type of business Apple wants to be in.

------
nishantvyas
if apple were to be a nation state, it will be one of the top 20 trillion
dollar economy... insane and amazing...
[https://en.wikipedia.org/wiki/Trillion_dollar_club](https://en.wikipedia.org/wiki/Trillion_dollar_club)

~~~
MagnumOpus
Revenue is more comparable to GDP - it being a flow metric. On that measure
Apple's $260bn puts it around #44.

~~~
nishantvyas
got it. thanks.

------
keyle
I'm happy for apple, but I'm annoyed at 'service' growing.

The free plan offering hasn't increased as far as I know, and the devices
require more and more icloud backup space, so why would you be surprised in an
increase of 'service' revenues?

~~~
reaperducer
The devices don't _require_ _any_ iCloud backup space. You are free to back up
your device on your local machine.

Or if you want to live dangerously, you don't have to turn on iCloud backups
at all.

In fact, you don't have to turn on iCloud, period.

~~~
iamdamian
For my purposes, I get by without a phone backup. I store most data on my NAS
or in iCloud (supposed to be E2E encrypted), so when I do get a new iPhone or
iPad ever few years, the only data I've lost is my system config. It's a
little bit of a pain to reconfigure, sure, but local backups to iTunes are
much more of a pain (and always seem to break for me).

I would love to use iCloud Backup, but my understanding is that as soon as you
do, everything that was E2E encrypted (because you're using iCloud services)
immediately becomes visible to Apple.

~~~
intopieces
>but local backups to iTunes are much more of a pain (and always seem to break
for me).

I recommend iMazing [0]. Very well executed local backups over WiFi.

[0].

~~~
sah2ed
Looks like you forgot to include the link to iMazing:

[https://imazing.com/store](https://imazing.com/store)

------
iknowalot
They stopped publishing how many units of each model of iPhone they sell,
that's a major investor red flag.

~~~
ogre_codes
If you don't invest in companies that don't release hardware unit sales, your
options are rather limited since the following companies don't provide that
data either:

Dell, HP, Microsoft, Amazon, Google, Samsung, LG... etc etc

Red Flags everywhere

~~~
m10i
That's interesting how publicly traded companies are not required to release
these numbers. I wonder if that's always been the case?

~~~
Traster
Why would it _not_ be the case? The important thing to report to investors is
the financials. The last thing you want to do as a company is advertise to
your competitors exactly which of your products are failing and which are
succeeding. Also, it would be insane if companies had to report "Unit sales"
do they have to report iPhone 7/8/9/X? Or 7/8/9/X + different colours? How
about X vs X+? Do you need to know iPhone X+ White 64GB sales?

