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Apple First Quarter Results (apple.com)
81 points by Bahamut 75 days ago | hide | past | favorite | 93 comments

One thing which is not appreciated enough about Apple is how magnificent its Return on Capital is. Its net profit margin hover over 20% and compared to another company Amazon which also has posted over a $100 billion revenue in a single quarter but Amazon's net profit margin is around 5%. I would say Apple is in a league of its own!

They also bought-back several hundred million shares. Most tech companies are slowly diluting share holders with their quarterly RSUs, while Apple is continually shrinking their overall outstanding share count.

The main question is, do you believe they can keep it up, and I for one do. Their eco-system gets stronger every year.

I think they can keep it up - their services revenue growth has been pretty spectacular over the last few quarters, and with more people at home due to COVID their new Apple Fitness thing is going to take off.

Also to keep in mind is that their profit margin on services is higher compared to their devices. Hence I'm assuming the upward growth of its net profit margin in coming years along with increasing revenue. Lots of upside for AAPL imo.

>The main question is, do you believe they can keep it up, and I for one do.

The beauty of buying back shares is that you don't need to "keep it up" as much, because you're not beholden to shareholders as much...

Why do you say they're less beholden to shareholders? Regardless of how much they buy back, shareholders still own 100% of the company.

>Why do you say they're less beholden to shareholders? Regardless of how much they buy back, shareholders still own 100% of the company.

Apple buying shares doesn't make the rest of the shareholders have 100% of the company. It makes having 100% - what_apple_bought%. They would still own 100% of the outstanding stocks, but those stocks don't represent 100% of the company's equity/ownership anymore.

The fact that the shares are destroyed (as shares) shouldn't matter, if it increases the part of ownership Apple has on itself.

Sorry, but you don't understand how stock buybacks work.

The purpose of a stock buyback is to reward shareholders by increasing stock price. The increase is caused because of the reduction in float. Each share represents more of the company after the buyback than before. [1] If that wasn't true, then the share price wouldn't increase, and there would be no reason to do a buyback.

The bought back shares could be kept by the company as treasury stock, but the company can't vote treasure stock or pay dividends. [2] The outstanding shares represent 100% ownership of the company.

So to say that stock buybacks make companies less "beholden to shareholders" compared to dividends is just wrong. Dividends and stock buybacks are exactly equivalent except for tax treatment (and possibly market pressure).

[1] https://en.wikipedia.org/wiki/Share_repurchase [2] https://en.wikipedia.org/wiki/Treasury_stock

Is that actually true? It sounds like a loophole would be possible: create a shell company that buys the shares instead so you can control the votes that belong to these shares.

Shares that are bought back by a company are destroyed. Thus, increasing the value of the remaining shares.

Shares that are bought back, buy back ownership of the company though, no?

If in a trivial example, they buy back all the shares but 1.

Would the person holding that last 1 share have suddenly 100% of Apple?

Don’t forget they can’t buy shares without someone selling them. So if they have bought so many shares back there’s only 2 left, these two people each control 50% of the company and aren’t going to sell that share (for a small amount)

>Would the person holding that last 1 share have suddenly 100% of Apple?


I’d be interested in the mechanics of how that works. I understand buying and selling of shares, but do you just got it the exchange and tell them you want the shares destroyed or?

I shit you not somebody writes "canceled" on the paper shares and moves them to a separate holding area.

But what if they are bought by another company? That the original company controls?

That doesn’t reduce share counts.

Of course, unless the shell company is completely outside of the control of Apple. Which would then beg the question, how are you going to get money into that shell company without upsetting the shareholders.

If that shell company would be owned by Apple, it implies the outstanding shareholders would own that company, including all the shares it holds in Apple, too.

Yes, but if that shell company owns more than half the shares, the shareholders can’t decide anything because they would always be the minority.

The shareholders own the shell company. It doesn’t change a thing.

Not quite a league of their own but a short list of companies for sure - Microsoft posted revenue of $43B this quarter (not as high as Apples $110B Q) but with a 32% net profit margin.

Facebook's margin is even better, 46% on Q4 revenue of $28B.

Of course Microsoft's income is more diversified while FB's revenue is almost entirely ads (other revenue was $885M, mostly from Oculus Quest 2).

This is how they can afford to pay engineers virtually whatever it takes.

I was expecting a huge quarter, but this is something else. WFH and Remote learning, lot of people bought new Desktop or Laptop. Which isn’t just Apple but across all computing industry, AMD, Intel, Microsoft etc. iPhone 12 was bound to sell with new design and 5G. But again number were way higher than even the most optimistic expectation. ( Mainly China’s uptake being a lot higher )

It is crazy to think back not long ago we thought we will hit the law of big numbers. And yet despite being a two trillion company they are still growing 10-20%!

And after 5 years, just like the Mac Pro they finally admit they made lots of mistakes in Mac development. Like MagSafe and SD Card. Hopefully someday keyboard and Trackpad.

The only thing left is the iOS App Store. Which is a complicated problem with no decent solution (yet).

Turns out all those people dramatically saying they're finally moving off macOS for good don't really count for anything! Who could have guessed?

It’s hard to address this without writing an essay, but what Apple has done is largely introduce annoyances, without actually hurting workflows. That’s not nearly enough to get people to switch platforms en masse. The Nvidia situation is a good example of a problem of the magnitude that will actually get people to migrate off of a platform, but the markets that need Nvidia on local hardware is small enough that it hasn’t made much of an impact.

But look at the other markets, why would anyone switch off of the Mac for other use cases like development, A/V editing, Adobe Creative Suite apps, or design? This is debatable, but you could make the case that Apple is best-in-class for all of those, and there’s no other platform you could make that case for (e.g., Linux is clearly worse for A/V editing, and Windows/Linux for design, both missing core apps - note also I’m excluding high-end specialized hardware you’d find at a studio for example).

Migrating off of platforms is a huge hassle, and although they’ve skirted the line, they haven’t actually crossed it by hurting workflows (outside of Nvidia).

(In fact I’d argue that the worst casualties of Apple's bad Mac years were advantages that only Apple had. Apple had a thriving indie software ecosystem that produced one of the greatest platform exclusives in modern history, Sketch. That doesn’t happen anymore because Apple's approach to the Mac App Store prevents it. But that was an advantage only Apple had and therefore they could afford to lose it, because there’s nothing else to switch to that also had it. Apple were willing to sacrifice there own advantages for their security crusade, but they weren’t wiling to go all the way and block apps like Adobe CS and VS Code from running on the platform, which the security model they have been pushing for would require. Because blocking those apps would actually have resulted in lost market share, because those apps run on Windows.)

Thank you for posting this, very insightful :)

Might just be that hn comments aren’t representative of the wider population.

> Might just be that hn comments aren’t representative of the wider population.

Just like any comment section anywhere in the world. Happy users don't bother writing about their experience.

Sometimes we do! It hasn’t exactly made me popular. But I generally like what Apple’s selling (apart from obvious ethical issues in their supply chain and by some accounts also in their company culture). I’m also pretty invested in the ecosystem though, I have been mostly Apple since I bought my first computer (first gen G4), and grew up with Macs in the house as far back as the IIvx, so I’ve even been through all of the platform transitions except the current one (I’m not working and can’t justify the expense, but I will eventually).

Gosh, sheeple, valuing battery life and speed above all else.

When will these people listen to Stallman?! It is CRITICAL TO EVERYONE that we be able to compile Hurd from scratch.

I wouldn't be opposed to trying out a normal arm based laptop down the line when more software gets distributed and run on arm natively, but if you want battery life then you're better of with a Dell 9510. Dell claim 37 battery life but some tests put it at 17 hrs where the M1 gets 12 at the same load. And that is with a i7 or 9 which should use even more power than the m1?

It is CRITICAL TO EVERYONE that we be able to compile Hurd from scratch

Not to be flip, but you can do that on a Macbook Pro as well if you have the skills and know how.

I know, I just chose an esoteric hacker-y thing for maximum hyperbole.

But really, the vast, vast, vast, vast majority of people could not possibly care less about what people complain about in regards to the Mac on here. Is the hardware pretty and performant? That’s what they care about. Nobody gives a damn about running Linux on a MacBook Air.

Yeah, those people would be better off giving money to Linux OEMs so that they would create LinuxBooks of comparable quality, instead they give money to Apple.

I hear you. Completely agree. I always thought the complaints were a bit narrower in scope than most people on HN seemed to believe.

No question - HN complains and is outraged at things people like!

Those complaints aren't for users but for makers. Apple doesn't make devices for makers.

You could re-post this exact comment but make it about Windows in 2005. Short term success can mask long term problems.

Is Windows in bad shape now? My understanding is desktop OS market share hasn’t moved much since 2005?

(Maybe you mean Microsoft missing the boat on mobile? But that would be an odd comparison to make with Apple, who don’t seem to have a problem missing new product categories.)

Interpret it as you wish but according to MS’s most recent earnings report Windows only grew 1%.

This proves again that MacOS is not worth using anymore. Apple has no financial interest in producing desktop or laptop os in "general computing" sense. Actual Apple product is the iPhone and iServices. Everything else is in category of companion device. And yes, people don't care about security and freedom they care about safety, social perception and ease of use.

> Apple has no financial interest in producing desktop or laptop os in "general computing" sense.

That’s a fascinating take on macOS. Which just had a major release with significant changes in the reported quarter. Unless I’m mistaken it still installs compilers and third party apps just fine, the only “general” thing you can’t do anymore is modify system internals as extensively. Which seems pretty good for security, and not especially meaningful in terms of freedom unless you’re a fanatic.

> Apple has no financial interest in producing desktop or laptop os in "general computing" sense.

I don't know what you think a 'general computing' device is, but as long as I can do my work on it then I'm happy.

As you can see I don't care about downvotes. I will say it simply as I can: iOS, iPadOS and in the near future macOS are vertically integrated service and sell channels. The right move that I expected was to make at least iPadOS macOs like not the other way around. The idea to run macOS apps on iPad is more valuable in general computing terms than using touch designed software on desktop os. Ipads are powerful enough but we don't have a proper access to filesystem and terminal. You can't compile on iPad or iPhone. The macs are around as development platform for increasingly restricted environment. Combine this with trend for SaaS and you will see that using your computer is actually renting overpriced hardware to work in the cloud. Everything that Apple does is exploiting the limits of their user base. Don't let me start on system design decision about VPN and Kernel extensions. (I know they will fix this in next update, but whats next?)

This isn’t true because the all of the apps and a huge amount of the content people consume on iOS devices is made on Macs. The Mac is in fact the golden goose, the iPhone is the egg.

Until you can build exactly the same software for iOS on iOS that you can with macOS, this is not really true.

Agreed. I can’t emphasise enough how maddening it is to have $5000+ worth of Apple devices in my house (some of which are more powerful than my 5 year old laptop) and none of them can compile software for their own ecosystem.

FWIW, Apple opened its first online store in India during this pandemic and several outlets reported it's been a huge success. Couple that with the china ban going on in India. Apple seems to always get some way out of tough times!

Which still doesn’t accept or pass on purchase GST credit.

So Mac sales are up from 2020Q1 by $1B. Lots of upgrades I bet, for the M1 Macs. I know I finally bought personal laptops for my kids who until now had been sharing a 10 year old family laptop among other devices.

I wonder how much is also related to the fact that it became apparent in the fall that remote learning is here to stay for the entire school year (where it was instituted in the first place). [edit: fixed Quarter date]

> So Mac sales are up from 2019Q4 by $1B.

Technically, up $1.7B from that quarter, but why are you comparing 2021Q1 with 2019Q4?

2021 Q1 $8.675B

2020 Q4 $9.032B

2020 Q1 $7.160B

2019 Q4 $6.991B

Clearly the uptick in Mac sales is due to the pandemic and work from home, because 2020 Q4 was prior to the release of M1 Macs, and Mac sales had been flat for several years prior.

It's difficult to determine the effect of M1 Macs on the last quarter sales, because they weren't available until mid-November and were also very supply-constrained.

Clearly the uptick in Mac sales is due to the pandemic and work from home

It will be interesting to see what happens when the pandemic is over. Will the gains technology companies have enjoyed be reversed?

Meant 2020Q1, updated. I know the base level M1s were constantly unavailable locally.

I'm curious what the uptick will look like for the next round of devices that get the M1, perhaps with 32GB memory options.

If rumours are true the next round will be the iMac, MacBook Pro 14 and 16.

M2, 32GB option, integrated graphics and possibly Mini-LED displays.

MacBook Pros getting rid of TouchBar and adding Magsafe, HDMI and SD ports.

If you are a developer relying on tools like docker and ruby, beware of the M1 chip as there are still lots of incompatibilities. https://www.driftingruby.com/episodes/a-rubyist-s-apple-m1-r...

I'm not a rubyist, but the latest Docker Preview has been working great for me.

That’s awesome to know; is it fast? What’s the mounted file system perf like, the same as on x86?

Also there seems to be issues with kernel panics and all sorts of power delivering USB-C hubs bricking the M1 units...

At least the USB-C issue is huge IMO, as with only two ports you want a hub, one cable desk setup, no?




57% rise in sales in China. It escapes me how Apple escapes criticism operating in that country when it's a PR nightmare for all of its peers.

It's a simple as the perception that Apple is a hardware company and Google/Facebook are information services company. It's much easier to draw a connection between Google/Facebook operating legally in China (and having their products subject to PRC information controls) and suppression of liberal/democratic ideals, than Apple selling hardware devices that are information-agnostic to the same.

And the share price inevitably falls in after hours trading. Seems shareholders had even more optimistic expectations than analysts.

This beat is more notable since Apple had closed a number of their physical stores due to the pandemic, which had driven many, many sales.

What's 'beat' mean in this context?

They beat the street...the wall street analyst estimates of revenue and profit growth for the quarter.

Beating expectations. Since Apple didn't provide guidance this quarter it's probably in reference to analyst reports.

Not OP but beat analysts’ expectations

Apple set a new quarterly record with $111.4 billion in Revenue:

iPhone Revenue was $65.6 billion since iPhone 12 October release

Services Revenue was $15.76 billion

Products revenue was $95.68 billion

Wearables Revenue was $12.97 billion

People really seem to hate right to repair

Last fall I took my early era MacBook Air to Apple and ordered a battery replacement for $99. It came back with a new motherboard too. Essentially a new machine, and it took two interactions: drop-off and pick up.

Last fall I bought two Dell desktops (for a client project) and neither has working Bluetooth/WiFi. One machine has been fully out of commission for 2 months and the other is limping along with weak WiFi and no Bluetooth.

The Dell is upgradeable and I could put 3rd party cards in there and get along. But they’re brand new machines under warranty. I’ve had two tech visits and traded more than 45 emails with Dell tech support and I’m still waiting on full system replacements that will ship in February sometime. I bought these machines in November.

Right to repair or not, I trust Apple non-right-to-repair hardware over Dell “I could repair it myself” desktop hardware.

The user experience of dealing with both companies negates the right to repair concern for me, on these right now.

A more extreme example- they may not allow this now

working in education at a nonprofit you quickly learn that warranty support on the acer / Sony is not worth a ton unless your time is free.

You are working with folks reading scripts designed to waste your time.

Meanwhile you can take 5 machines to apple store and walk out w new ones - or if out of warranty pay not unreasonable prices to get them fixed

Yes that Dell experience is poor, though it's warranty work rather than a revenue-earning service for them.

But what would your experience have been if Apple has simply said "no, we don't service that model any more"?

That's where "right to repair" is important.

Yup, in absolute terms that's a concern.

But if/when we ever have right to repair laws that apply to Dell & Apple, based on their track records, I'd probably still invest my future computing dollars in the one that has the strong game.

How is that important? You could absolutely do that and Apple absolutely could do that. Right to repair laws wouldn't force Apple to create obsolete parts so what's your point?

I think the inability to repair Apple products is right on par with the rest of the industry really. My Samsung mobile phone is just as difficult to repair as an iPhone.

Also, when it comes to computers (I use a Mac), there is also another factor. Apple devices may be difficult (and expensive) to repair, but they are certainly popular, which means one can find plenty of online resources or even spare parts, where applicable. And, one can actually find a local store that repairs Macs and take the computer there, if throwing money at the problem is an option.

Quite recently, I came across a case of a Lenovo laptop whose user had somehow activated bitlocker and forgot the password. Wasn't interested in the files, they just wanted to be able to use the computer again. I tried to find a way to reinstall the operating system and, I kid you not, there was literally no obvious way to boot normally from a usb device nor Lenovo provides any meaningful documentation or, Heaven forbid, the boot image to reinstall. It was actually kind of difficult to even determine the model of the device, as there have been several generations with the same name, each with a different processor and efi firmware. It was almost as if the model never existed.

We can laugh all we want for Apple's expensive and un-repairable devices, but the above nightmare cannot happen in the Apple ecosystem. You can even get the device to an apple store and they'll happily take your money and fix your device (if it's not severely damaged of course). This is not unique to Apple, e.g. Dell has excellent support and documentation. But this is a quality that is very important and yet it is often overlooked.

> My Samsung mobile phone is just as difficult to repair as an iPhone.

If anything, the iPhones are much easier to repair.

As of the latest generation of Samsung Galaxy S series and iPhones that have been torn down by iFixit, the Galaxy S20 was given a repairability score of 3 vs. a score of 6 for the iPhone 12.

On the iPhone, iFixit said:

>[ease of] display and battery replacements remain a priority in the new iPhones' design.

Most other important components are modular and easy to access or replace.

On the Galaxy S20, iFixit said:

>Every repair starts with painstakingly un-gluing the fragile glass rear cover.

Replacing the glued-down battery is tougher than ever, especially with board interconnect cables to work around.

All-too-common display repairs require either a complete teardown or replacing half the phone.



Devices being easy or difficult to repair is not really the crux of right to repair. It's more about people being empowered to be able to fix them should they have the skill to do so.

I'm only following the subject casually so I might be biased to have incomplete information but apple is seemingly worse that it's peers when it comes to repairability.

A quick Google search takes me to a page where Samsung lists official resellers of parts for their devices. The selection wasn't great but as far as I know apple doesn't do even that. Correct me if I'm wrong.

Apple has been in litigation in my country trying to block a independent repairer from procuring parts(think it was refurbished original screens).

I haven't heard of any Android phone manufacturers serial linking parts the same way apple has. At least not to the same extent.

TBH, I think most of the smartphone manufacturers are worse than Idd want them to be, but I definitely think Apple is among if not the worst of them when it comes to repairability

Point 100% taken on the matter of having the right to repair and procure spare parts. Here in the EU, I hear there is a major push to introduce some meaningful legislation to establish requirement, definitely right direction.

Comparing Samsung with Apple is interesting, because Samsung is very competitive and will come to your door (so to speak) to sell its products, which I respect very deeply. In my country, Samsung official service is top, better than Apple probably. I've been able to go to the service unannounced, ask for a battery replacement, go for a coffee and come get my device back after an hour. For computers, Dell also has a very respectable name, to the point where people will prefer Dell solely because of this. But below that level, chaos really, you have to go and order parts from ebay most of the times.

It's not "hate", most people don't know and don't care. They want things that "just work". And, for many people, Apple's devices do that.

Is it true still, tho? I got the impression there is a lot of myth around Macbooks, which kindof wasn't updated since 2015.

A lot of folks around me simply skipped the new Macbooks, since touchbar, keyboard, ... , were just unusable for them.

Then you had the major issues with dust getting into the keyboard messing it up, the screens dying after weeks of usage, USB things...

Now the Big Sur update bricks your machine, if you reset it, because there is a firmware bug. The M1 Macbooks are distroyed by USB-C PD hubs (not just the "cheap ones"; as if that would have been excusable..). Plenty users reporting the machines to panic once or twice a day.

People seem to be happy with the old non-retina Air's, the pre 2016 Macbooks, but I don't see this at all for the recent stuff. Apart from the M1 performance hype, which of course is legit, but doesn't cancel out the "just works" issues.

Seems rather like a long, long experimental transition, then reliable experience.

I have the '17 MBP (because I wanted something smaller, I was traveling a lot and it replaced a 15" 2012 MBP). It's been perfectly usable, though I did have to take Apple up on their keyboard repair service because they did screw that up. The rest of the system has been entirely fine, and since the keyboard repair there have been no issues. As I recall the keyboard issue applied to the 2016-2018 laptops. If my only complaint is, "the 's' key got stuck and they had to replace the whole keyboard for free, which took 24 hours at a local repair site", then I'm not too worried about it. It's annoying, but compared to literally every HP or Dell laptop I've owned, it's a far better situation. Though I hear some people had even worse experiences than my stuck 's' key.

Ultimately I think it's hard to come to a conclusion, since few people stick to a particular brand outside the Apple ecosystem. I think the only other bubble would be Thinkpads. So continuous comparison seems flawed anyway. On the other side, Mac users seem to be weirdly accepting of things not working out, the "you are not using it right" meme holds some truth from my observation.

Personally, I have bad experiences with newer Thinkpads and "QC" on dead pixels (lol, one shop won't sell to me anymore, because I keep finding dead pixels), which is why I was considering an M1 Mac for the first time. Sadly/gladly I found out about the various bricking issues in time. Let's see how Apple is going to handle these in the next months...

I’m all for the right to repair.

The other day I put my phone through a full washing machine cycle though, and it didn’t need to be repaired. That’s incredible. It came out of the machine looking brand new.

I’m a little torn. Can we have repairable devices that are this stable and robust, and have such an incredible form factor?

Considering this phone will last me 4 or 5 years, it’s a good value and extremely dependable. I want more repairable things, I just don’t know how they’d make it happen in a way that keeps them competitive.

One shitty thing: my left AirPods Pro clicks and pops, and the only solution is a complete replacement. Apple is willing to replace them at no charge, but I can’t stand the waste. What will they do with them? Recycle and landfill? These things really are a repairability nightmare and I don’t think I can justify buying then again.

My personal experience has been very positive though. The need to repair is remarkably rare.

I reaaaaaally dislike the implication that Apple is against people's rights to repair their own devices because, frankly, that's nonsense. You can support "right to repair" while simultaneously opposing the current proposed bills. I think people should be able to do whatever they want to their devices once they've purchased them but I don't think that Apple should be forced to provide them with the parts, tools, and manuals to do so. That doesn't make me anti-RTR.

For most people Apple's products live beyond the expected life range (compared to the rest of the industry).

That rings true, though Apple could do better when large problems do crop up, which doesn't happen often. They seem to need several rounds of PR beatings before doing the right thing.

For years now, Mac OS X has had a bug where if you download a file like an image from the internet, and want to upload it elsewhere, there's a long delay (10-30 seconds or more) before the file shows up in your file system to select it.

This problem has been ongoing for years and Apple still hasn't fixed it. Even brand new, maxed out Macbooks have this problem. In an era where much of what people do online is rapidly downloading and reposting content across platforms, it's unacceptable Apple can let such a ghetto problem go unfixed.

I've never seen this issue in 15 years of Mac OS X/macOS use. Is this via the browser (which?) or the command line or some other tool? When I download something, it shows up in the filesystem immediately, or as near to it as to be "immediately" in human terms.

Does it not “show up” because it’s being downloaded to a temp directory and moved over when it’s done? That’s a pretty common thing.

Your comment isn’t clear enough to explain what is happening. What’s your setup (browser and everything)? You claim a bug without giving enough information about how the bug appears. Because if this bug were as widespread as you make it sound, we’d hear about it.

Safari creates an empty placeholder file and downloads the data into another file in the same directory. When it’s ready it is moved over the placeholder.

No idea what the complaint is about, perhaps there’s some scanning going on or something. I have never noticed this.

Hmm that's possible. I've had this problem on multiple Mac's now. The files are going to my Downloads folder which triggers an iCloud upload. That uploading process shouldn't prevent it from showing in my downloads folder though.

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