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Apple falls short of expectations with $7.7B in profit on sales of 35.2M iPhones, 13.3M iPads - Page 2

post #41 of 177
Quote:
Originally Posted by Dick Applebaum View Post

One consideration is that people do not upgrade iPads as frequently as iPhones -- I've read where people upgrade their iPads on a 2-3 year cycle.

We have iPad 1s, an iPad 2, an iPad 3, an iPad 4, and an iPad Mini. (several iPads have been broken, repaired, re-broken).

I never bought an iPad Air, but I suspect I'll by a new iPad for me and a new iPad Mini for my daughter.

The grandkids will get the push downs.
I wonder how long it will take for this to normalize where we no longer see these YOY declines.
post #42 of 177

So Apple didn't beat the analysts predictions, but how did it do relative to it's own guidance from the previous quarterly report?

post #43 of 177
Quote:
Originally Posted by Yojimbo007 View Post

.... And why would u be so naive to think that is not a real possibility?

The fact is the headline is false and puts a negative twist on facts.
Apple beat profit expectation
Apple beat margin expectations..
Apple grew double digits yoy
Apple broke All time records !

You are confusing guidance with expectations again.
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post #44 of 177
Quote:
Originally Posted by TeaEarleGreyHot View Post

So Apple didn't beat the analysts predictions, but how did it do relative to it's own guidance from the previous quarterly report?

Spot on.
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post #45 of 177
IMO
The rumor of a phablet coming out by the end of this year or beginning of next year is going to hurt the iPad. Some people just waiting to see what size it is and if they can get away with one device rather then paying for two.
post #46 of 177
Quote:
Originally Posted by MagMan1979 View Post

Gotta love AppleInsider (should be renamed to WallStreetAnalsider)... Apple met or beat their own guidance, which TIME AND TIME AGAIN Tim Cook has said is what the Wall Scum anal-ysts should be following, yet the headline implies doom and gloom because Apple didn't meet the out-of-their-asses expectations of Wall Street scum.

WHAT A JOKE!
The bigger problem with the headline is that apple exceeded earning expectations and margin expectations.. Not just guidance but expectations.
post #47 of 177
Quote:
Originally Posted by asdasd View Post

Spot on.
Wrong
Apple beat profit Expectation
And apple beat margin expectations!
post #48 of 177
Quote:
Originally Posted by Rogifan View Post

Every quarter we hear the same thing when the stock drops...weak guidance. What exactly is Wall Street expecting the quarter before a huge product launch (or two)?

Well, it depends when the product ships.

 

Apple's Q4 ends on Saturday 27 September. If Apple ships the next-gen iPhone on Friday the 19th, that's eight days of sales from a handful of markets. If it ships on the 26th, that's about two days of sales. Analysts are likely hoping for an earlier release of the iPhone which is why street estimates of Q4 revenue at $40.6B are slightly outside of the $37-40B guidance provided at Apple.

 

Of course, we don't know of Apple's product development deadlines, but we do know that the new iOS release precedes the hardware release by at least a few days. From there one can make some reasonably intelligent guesses.

 

iOS 8 was unveiled on Monday 2 June at WWDC. If Apple has a fourteen week development schedule, that means iOS 8 Golden Master would be ready on Monday 8 September, a fifteen week cycle would place it on the 15th of the month. 

 

The other mitigating factor would be the production ramp of the new handset by Apple's manufacturing partners. If there are supply (typically main silicon or a new display) or yield issues (from a radically new process), an extra week to accumulate more inventory for the initial launch would be advantageous to Apple, at the expense of recording revenue for the quarter in question.


Edited by mpantone - 7/22/14 at 2:20pm
post #49 of 177
Quote:
Originally Posted by asdasd View Post

I wonder about tablets. I have my iPhone all the time. My laptop for work and home. The iPad tends to be in the corner. My sister loves hers though. I wonder is it really the post-PC era.

I've been thinking the same. Personally I don't think they're the PC replacements some were thinking. I see them as a supplemental device rather than something I'd be happy using all the time. Since the category is no longer new and therefor "cool", and they may no longer be widely perceived as preferable to a typical laptop I'm not particularly surprised that sales might be slowing.
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post #50 of 177
Quote:
Originally Posted by Rogifan View Post

Quote:
Originally Posted by Dick Applebaum View Post

Perhaps, sell into enterprise by taking an established company as a strategic partner?
I'm not convinced that's going to be a huge driver of iPad sales. Doesn't really solve the consumer side of the equation though.

On the earnings call, Tim just said that the 100 apps that Apple and IBM are writing for enterprise are written in Swift.

I did some research into what mobile solutions IBM is currently offering to enterprise -- not much! Mostly browser access to web sites, and a few native apps (mostly iOS, but a few Android).


P.S. They announced a reduction in channel inventory in anticipation of new product announcements..
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post #51 of 177
Quote:
Originally Posted by Dick Applebaum View Post

On the earnings call, Tim just said that the 100 apps that Apple and IBM are writing for enterprise are written in Swift.

I did some research into what mobile solutions IBM is currently offering to enterprise -- not much! Mostly browser access to web sites, and a few native apps (mostly iOS, but a few Android).
I thought that was interesting too. After the IBM announcement I saw a lot of "meh" comments from some quarters because they don't think IBM is good at designing apps. But with what Cook said it makes me believe Apple is very involved in the design of these apps.
post #52 of 177
Quote:
Originally Posted by mpantone View Post

Apple exceeded some street estimates (EPS, profit, gross margin) but fell short on others (unit sales for some product lines, total revenue) so really a mixed bag regarding Q3, but nothing really out of line.

It's the weak Q4 guidance that's troubling the market. Analyst consensus was for Q4 guidance of $40.6 billion in revenue, however Apple is low-balling it by saying $37-40B. That might be interpreted as Apple shipping the next-gen iPhone in late September or possibly slipping into October.

A tardy release of the iPhone could easily account for $2-3 billion in missed revenue in Q4.
Anal-ysts are the LAST people that should be trusted, and this has been proven so many times now I've lost count!

Apple has lower Q4 guidance because people know a new iPhone is coming out, and it's the natural progression of the market that sales will slow as a result of consumers holding off their purchases due to the anticipation of a newer model.

THIS HAPPENS EVER YEAR PEOPLE!!!
post #53 of 177
Quote:
 
  • A tax rate of 26.1 percent

 

That is a lot. Do Apple actually pay that much? Compared to other tech company which only pays a single digit.

post #54 of 177
post #55 of 177
Quote:
Originally Posted by Rogifan View Post

Quote:
Originally Posted by Dick Applebaum View Post

One consideration is that people do not upgrade iPads as frequently as iPhones -- I've read where people upgrade their iPads on a 2-3 year cycle.

We have iPad 1s, an iPad 2, an iPad 3, an iPad 4, and an iPad Mini. (several iPads have been broken, repaired, re-broken).

I never bought an iPad Air, but I suspect I'll by a new iPad for me and a new iPad Mini for my daughter.

The grandkids will get the push downs.
I wonder how long it will take for this to normalize where we no longer see these YOY declines.

I suspect that this year's new iPad will be significantly improved -- and that will start a new cycle -- removing the iPad 2 from the product line.
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post #56 of 177
Oh my, Apple didn't meet the outside Apple market guesses on their business.
Yes, that should be doom and gloom!

But I'm very happy, the iPhone, Mac and even the iPad sales surprised me at their strength.
Personally I know PC users who got an iPhone, then an iPad, then recently a Mac. They've become total switchers; sorry MS, BB, SS and the others!

Now we know how off the mark the market insiders are.
Avoid them and make your own investment decisions, else you will lose even worse than they do.
post #57 of 177
Every news alert service that I subscribe to had a positive headline, but AI.
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post #58 of 177
Woe. Another record quarter, another record disappointment.
post #59 of 177
Quote:
Originally Posted by mstone View Post
 

Can anyone explain why it has dropped for two quarters in a row?

 

If I were to guess then I'd say that more and more people tried the two screen experience and then decided that their phone was enough. More reason for Apple to get a larger screen phone in the market place.

 

Those that want a large screen tablet are becoming fewer and quite a few consumers are choosing things like the cheaper Kindle Fire which is taking away from sales that are dwindling in the first place.

Hmmmmmm...
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post #60 of 177
Quote:
Originally Posted by asdasd View Post

The iPad figures are worrying however. ( iPhone did well).

Projections look like they may not release the new phones this quarter or very late in it.

 

You must be a real hoot at parties. Can you say Debbie Downer. Great quarter and YOU find something to worried about. What, exactly, is worrying you about tablet sales when the entire tablet market has slowed? I just don’t get people like yourself. And what ‘projections’ are you babbling about? There have been no projections of anything other than hearsay and rumors.

post #61 of 177
Quote:
Originally Posted by Rogifan View Post

I wonder how long it will take for this to normalize where we no longer see these YOY declines.

For the iPad? I don't know. I was perfectly happy with the iPad 1, but when retina screens came out bought a 3. Both still work great despite me using them nearly half the day long for years. They just don't break, IMHO.

When a touch ID version comes out with the smaller bezels I'll probably get one and then we can have an upstairs, downstairs and travel iPad ( iPad1 for travel in case it gets lost plus it has a cellular card). After that, I guess we could always get another for the basement lol.

I guess a lot of people don't have to upgrade. I bet the new enterprise apps will help sales.

Apple seems to hit the sweet spot with their parts/specs. I don't care so much for x bump up on x part. I only care about the total experience. That's what the other mfgs don't get. I'm glad Apple gets it.
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post #62 of 177
iPhone sales in China were up 48%. Yet everyone keeps saying Apple is doomed in China.
post #63 of 177
Quote:
Originally Posted by Rogifan View Post

iPhone sales in China were up 48%. Yet everyone keeps saying Apple is doomed in China.

Not everyone says Apple is doomed in China. However, quite a few pessimists and a few people who can't read a fiscal earnings announcement say that. Also a few trolls and Apple haters.

 

The lesson here is not to believe everything you read.

 

China's YOY growth for all Apple products is +28%, by far their fastest growing geographic market region. That said, the Apple earnings announcement does not cover YOY growth by their competitors. The +28% and +48% growth numbers look impressive by themselves, but they really needs to be placed into perspective vis-a-vis the competition for a clearer understanding of what's going on.

 

Let's say you're a soccer team and you score three goals in the second half. Sounds great, right? What if the other team scores eight?

 

We do know that most of Apple's handset competitors don't make a profit from telephone sales (Samsung makes a bit, but their profit margins are eroding; HTC used to be flat, everyone else loses money). We also know that the iPad is basically the only tablet line that turns a profit, everyone else is losing money from tablet sales.


Edited by mpantone - 7/22/14 at 2:54pm
post #64 of 177
Quote:
Originally Posted by Dick Applebaum View Post

One consideration is that people do not upgrade iPads as frequently as iPhones -- I've read where people upgrade their iPads on a 2-3 year cycle.

Categories iPad of buyers:

 

1) Consumers replacing home Windows PCs that were always infected.

2) Nerdy halo buyers who have an iPhone and a MBP

3) Families with children

4) Schools

5) Specialty industry such as outdoor logistics, fire dept., transportation, medical

6) Coffee shop and commuter readers 

 

Perhaps those categories are approaching saturation at this point although I'd think K12 education has a lot of upside. 

I don't know, just curious.


Edited by mstone - 7/22/14 at 2:58pm

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post #65 of 177
Cook hinted that there could be a bigger acquisition on the horizon. Of course he said it needs to be strategic and he's not looking to acquire a certain number of companies, etc. but he made a specific point of saying how strong the executive team was and how well they could handle a larger acquisition.
post #66 of 177
Quote:
Originally Posted by herbapou View Post

My father still being very satisfied with its ipad 2 says ot all. Upgrade cycle is very long.

Some saturation as well. A household with 2 or more iPhones could get along with just one iPad.
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post #67 of 177
Quote:
Originally Posted by dasanman69 View Post

Some saturation as well. A household with 2 or more iPhones could get along with just one iPad.

...or less. 1wink.gif
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post #68 of 177
Something else Cook said on the conference call: of the there iPhone tiers the 5C had the best YOY growth this quarter.
post #69 of 177
Quote:
Originally Posted by asdasd View Post

You are confusing guidance with expectations again.

No my friend .. I am strictly talking expectations

Expectation on eps was 1.23... Apple did 1.28
Expectations on margin was 37ish. Apple did 39 ish

Apple beat profit Expectations not apple guidance !
post #70 of 177
Quote:
Originally Posted by Rogifan View Post

Something else Cook said on the conference call: of the there iPhone tiers the 5C had the best YOY growth this quarter.

Well since it only has one year and it started at 0. That would make it like 10 million % YOY

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post #71 of 177

I'm pretty sure a lot of people are holding off on buying new or replacement iPads, specifically waiting for the next-gen with Touch ID, etc. 

 

I almost didn't buy my Retina iPad Mini early this year, after having experienced Touch ID on the 5S for a few months... one becomes spoiled in a hurry. I considered waiting, but then seeing that the new ones weren't likely until September or so, went ahead and pulled the trigger (needed it sooner)...

 

I'll still probably sell my existing mini and replace it with a Touch ID model, assuming that's in the cards. 

 

I know quite a few people who aren't upgrading just yet, because they also want the iPad Air/Mini rev2 (better camera, faster processors, Touch ID, etc.)...

 

I expect the iPad line will make up for 'lost ground' once those new models are released...

 

And there's still so much in the pipeline that we can only guess at!

post #72 of 177
Quote:
Originally Posted by Yojimbo007 View Post

No my friend .. I am strictly talking expectations

Expectation on eps was 1.23... Apple did 1.28
Expectations on margin was 37ish. Apple did 39 ish

Apple beat profit Expectations not apple guidance !
You should know by now the only thing that matters is what Apple didn't beat.
post #73 of 177
As soon as Apple ships iPad with iTouch sensor then we will buy 4x units immediately. Based on antocedal evidence, I suspect there are others with the same thought.

Next.
post #74 of 177
Quote:
Originally Posted by mstone View Post

Well since it only has one year and it started at 0. That would make it 10 million % YOY

Huh? Cook said tiers. The 5C is the middle tier. That tier had the best YOY growth.
post #75 of 177
Quote:
Originally Posted by ksec View Post

That is a lot. Do Apple actually pay that much? Compared to other tech company which only pays a single digit.

They don't pay that. That's the "effective tax rate". What they should pay. Or will sometime.
Quote:
Originally Posted by lkrupp View Post

You must be a real hoot at parties. Can you say Debbie Downer. Great quarter and YOU find something to worried about. What, exactly, is worrying you about tablet sales when the entire tablet market has slowed? I just don’t get people like yourself. And what ‘projections’ are you babbling about? There have been no projections of anything other than hearsay and rumors.

I didn't reply to this childish post sooner because I was listening to the Q&A. Like an adult with an investment. Where tim was indicating that he was unhappy with "penetration" in enterprise for iPads. Hence the IBM deal.

I doubt if they are happy with consumer tablets either but can't say yet. I expect that the recent upgrades weren't all that compelling - the iPad 2 was and is adequate for most. What will drive consumer tablets is any of , IMHO , the Touch ID, a new form factor and more hard drive space at all price ranges. With that I would upgrade my iPad. With just speed increases I wouldn't.

The projections I am "babbling about" is Apples guidance. Hat tip, You might want to reconsider posting on a site which is for investors given you don't know the rudimentary terminology.

I bet very few of the "Apple can do no wrong" fanatics listened to that call. This is about the 80th call I have listened too. Being a fan of Apple doesn't mean you can't be concerned with some trends.

In general it was a good Q.
Edited by asdasd - 7/22/14 at 3:13pm
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post #76 of 177
Quote:
Originally Posted by Rogifan View Post
 
Quote:
Originally Posted by mstone View Post

Well since it only has one year and it started at 0. That would make it 10 million % YOY

Huh? Cook said tiers. The 5C is the middle tier. That tier had the best YOY growth.

Why mention the 5c at all if you really meant the middle tier? What else is in the middle tier?

 

Edit I see. you mean 5C sold better than the 4S did the year before. Okay. But that is kind of weird because the 4S was a two year old phone for $99 and the 5C is a brand new phone at full price. Sorry I didn't listen to the conference call.


Edited by mstone - 7/22/14 at 3:13pm

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post #77 of 177
Quote:
Originally Posted by Rogifan View Post

Huh? Cook said tiers. The 5C is the middle tier. That tier had the best YOY growth.

Yes. Over last years 4S.
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post #78 of 177
Quote:
Originally Posted by herbapou View Post


My father still being very satisfied with its ipad 2 says ot all. Upgrade cycle is very long.

 

My iPad 1 lasted almost 4 years. I "retired" it by making it my sister's first iPad. She loves it (she studies linguistics, and reads constantly, so it works real well for her), and it shows no signs of giving up yet. The battery still holds a full charge (she says 8~9 hours a day of use), and the screen is bright as ever... 

 

I replaced it with a Retina iPad Mini early this year. I wanted to wait for one with a Touch ID (assuming Apple is heading that way next-fen), but that was too far down the road.

 

I know the Mini could easily last another 3+ years for me, except I want the Touch ID!! So I"ll be getting another later this year (I hope!).

 

The build quality is as good as any Mac or iPhone I've owned, and it's rare that I replace those in less than 3 years (my typical cycle).

 

We're coming due for the replacement cycles for iPad 2 and 3 now, so I expect a solid uptick just from that... and the next-gen will be well worth upgrading into if it has Touch ID, etc...

post #79 of 177
Quote:
Originally Posted by mstone View Post

Quote:
Originally Posted by Dick Applebaum View Post

One consideration is that people do not upgrade iPads as frequently as iPhones -- I've read where people upgrade their iPads on a 2-3 year cycle.
Categories iPad of buyers:

1) Consumers replacing home Windows PCs that were always infected.
2) Nerdy halo buyers who have an iPhone and a MBP
3) Families with children
4) Schools
5) Specialty industry such as outdoor logistics, fire dept., transportation, medical

Perhaps those categories are approaching saturation at this point. 
I don't know, just curious.

Possibly, but these 2010 - 2014Q3 usages were established with an incrementally improved iOS and incrementally improved iPad hardware (exception being the A7 APU on the iPad Air).

WWDC2014 changed very much in the iOS side of development -- 4,000 new APIs, inter-app communication, Swift,, Interactive Programming and debugging, Hand-off, Extensions, HomeKit, Metal, Enhanced Security ...

I suspect the new iPads will have TouchID and more RAM and flash storage. I suspect that a lot of existing apps will be upgraded to take advantage of new iPad hardware and new iOS capabilities/openness.

In addition, I think we'll see new classes of iPad apps -- console-quality games, medical apps, home automation and security ...
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post #80 of 177
Quote:
Originally Posted by Yojimbo007 View Post

No my friend .. I am strictly talking expectations

Expectation on eps was 1.23... Apple did 1.28
Expectations on margin was 37ish. Apple did 39 ish

Apple beat profit Expectations not apple guidance !

Well I don't follow the analysts much. Maybe you are right and the headline is over gloomy. But no need to suggest payments by Samsung.
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