It's tough to spin this. Things may even get a little worse before they get better. While the Watch is just great, it's not a needle-moving new product. The bottom line is that, there has been nothing massively significant since the iPad six years ago, and the story there is not great either (in part because most people can hang on to it for much longer than Apple perhaps thought they might, given its use case).
The bottom line is that Apple needs a new hit. I am not sure what that could be in the next year or two, until/if/when the iCar arrives. From a stockholder standpoint, there's not much else to do at this point except to hold.
The thrill may be slowly going, baby....
It very easy to explain.
2015 and the iPhone6 was a massive anamoly. The sales in 2015 was from pent up demand for a larger iPhone. We are talking about TWO or THREE YEARS of pent up demand. That is a once in a decade super cycle. There is no way Apple could have matched that type of sales. iPhone sales were up a ridiculous 40% last year.
You need to compare 2016 with the last normal cycle which was 2014. If you compare revenue to 2014, revenue is up over 17% taking out currency adjustments. That is great growth for a company with a 9 PE ratio.
So why is iPad down? Its because larger iPhones are canibalizing iPad. Mac is down because the entire PC market is down. You can't expect Mac to grow massively when the entire PC market is in the toilet.
That's why its wise to just compare TOTAL HARDWARE and TOTAL SERVICES/SOFTWARE to 2014.
Hardware is up over 10% from 2014 Services is up over 35% from 2014
Don't compare 2015 numbers. That was a total anamoly.
If that's the case, why has it not been even remotely a part of Apple's or Tim Cook's narrative? It is up to him and his senior leadership to manage that perception. If they have not done that, it's either because it did not occur to them to do so (which I doubt) or it was not really true in expectation.
You simply can't wish away a whole year of operations. You're forgetting the simple fact that many investors -- including yourself, if you'll recall -- bought in the 110s, 120s, and 130s, chasing that performance. An expectation that was not delivered, so it's obvious that the stock price has taken a beating. Nothing unusual about it.
I agree with you about Apple's long-term prospective, but the short run is going to be rough.
2015 and the iPhone6 was a massive anamoly. The sales in 2015 was from pent up demand for a larger iPhone. We are talking about TWO or THREE YEARS of pent up demand.
Hardware is up over 10% from 2014 Services is up over 35% from 2014
Don't compare 2015 numbers. That was a total anamoly.
By that logic you need to ignore 2014 results as well. Everyone in the world knew that Apple is coming with big screen phone and they were waiting for that big screen phone in 2014. Because of that 2014 sales would show lower sale numbers otherwise it would have been in normal year. Obviously lot of sales of 2014 got moved to 2015 big screen phone release. 2014 sales would have been higher otherwise, in that case Apple still didn't show growth in iPhone/iPad/Mac sales compared to 2014 year.
By that logic you need to ignore 2014 results as well. Everyone in the world knew that Apple is coming with big screen phone and they were waiting for that big screen phone in 2014. Because of that 2014 sales would show lower sale numbers otherwise it would have been in normal year. Obviously lot of sales of 2014 got moved to 2015 big screen phone release. 2014 sales would have been higher otherwise, in that case Apple still didn't show growth in iPhone/iPad/Mac sales compared to 2014 year.
You're making my point that you can't just throw out data points because it fits your narrative.
I'm pretty sure I have more than half a brain. Mac and iPad sales both also fell year over year, and by considerable amounts. It's a disappointing quarter.
I can't wait until it drops further so Apple can buy back as many shares as it can.
What advantage do you think Apple gets when they buy back stock? Serious question for you personally. I suspect some folks don't really understand it.
By that logic you need to ignore 2014 results as well. Everyone in the world knew that Apple is coming with big screen phone and they were waiting for that big screen phone in 2014. Because of that 2014 sales would show lower sale numbers otherwise it would have been in normal year. Obviously lot of sales of 2014 got moved to 2015 big screen phone release. 2014 sales would have been higher otherwise, in that case Apple still didn't show growth in iPhone/iPad/Mac sales compared to 2014 year.
You're making my point that you can't just throw out data points because it fits your narrative.
Thanks.
Yes that was reply to Sog. I am with you. You can't just twist the story to fit your narrative.
I have to agree with Sog's previous rants. Tim is doing a piss poor job and needs to go - and Apple is resting on it's laurels. In the tech world there is no yesterday - only today and tomorrow - Apple is not competing for today! I dumped my Apple at $110 a few weeks ago (and took a loss). I don't see it going anywhere but down - especially with the challenging economy clouds brewing...
The stock could go down more. Who knows?
Think LONG TERM. I'm talking about 10 years or more. Personally I see the stock at $300 in 10 years.
Apple and Cook has made some mistakes the last few years. But they are fixable and quite easily. Customers are willing to pay a premium for Apple product.
IMO, Cook has to stop being so concerned about margins. Make a little less profit on Mac, iPhone, iPad, ect. But give more quality. You win in the long run. The two main goals of Apple should be:
1. Increase the install base (even if this means getting less profit/margin per device) 2. Sell more services and create new services to an ever growing install base
I hope you are right that Apple is at $300 in 10 years.
Then again I hope that all of the other big companies do just as well, including Alphabet, Facebook, Amazon, Microsoft, etc. I have never once used Facebook for example, or bought any of their stock directly. But I hope they do well for at least the next ten, twenty, thirty years.
The better the overall market performs, the better off we all are.
While investing in individual stocks is certainly fun and exciting, sticking to the index works out pretty well if you are in it for something like 10 years or even longer term. Of course anyone who went heavy on AAPL ten years ago is very pleased with their investment regardless.
Anyone buying AAPL today and holds it for 10 years will likely also be very pleased.
Anyway I am not telling you anything you probably don't already know, just thought I would chime in with my 2 cents. Hopefully my 2 cents will be worth at least 6 cents in 10 years
Oh c'mon, that is a traditional part of the analyst conference call. Has been so for at least a decade. SJ started it.
Not if numbers are good. A reduction in channel inventory is just code word for soft sales.
Analysts are used to that language, and can parse it. It was wording intended for them, not for you or me. If he hadn't talked about the channel inventory, the market would have treated that as something seriously amiss.
Cook never discusses pipeline detail but he never uttered the word once today.
No, not once — three times:
"Before I turn over the call to him, I'll summarize by saying the future of Apple is very bright. Our product pipeline has amazing innovations in store. We're very excited about bringing together developers for our four major platforms at our world wide developers conference in June."
and during Q&A: "We also look at our pipeline and are very excited about what's in our pipeline."
So what was the consensus from analysts prior to Apple's latest results being announced a few hours ago? Per PED $52.2 billion revenue (a 10% decline), 51 million iPhones (a 15% decline), 9.9 million iPads (a 20% decline) with Mac sales constant at 4.5 million.
They weren't as far off as some might have thought they would be tho the miss on revenue was a little higher than they expected.
Apple's second fiscal quarter of 2016 officially marks the first time ever that iPhone sales saw a year-over-year decline, as the company shipped 51.2 million handsets on its way to $50.6 billion in total sales.
Net quarterly income for the March frame was $10.5 billion, or $10.90 per diluted share. In contrast, in the same quarter a year ago, Apple earned $58.01 billion in revenue and $13.57 billion in revenue on sales of 61 million iPhones.
Gross margin also dipped this year, falling to 39.4 percent, compared to 40.8 percent in the same period a year ago. Apple's three major product categories --?iPhone, iPad and Mac --?all saw a year-over-year decline in sales.
Mac sales for the second fiscal quarter of 2016 were 4 million units, down from 4.6 million in 2015. And iPad sales also fell from 12.6 million units a year ago to 10.3 million units this year.
"Our team executed extremely well in the face of strong macroeconomic headwinds," Apple Chief Executive Tim Cook said. "We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active device."
The results are consistent with the guidance Apple provided investors back in January. The company had projected revenue between $50 billion and $53 billion, with gross margins between 39 and 39.5 percent.
Looking forward to the fiscal 2016 third quarter, Apple is projecting revenue between $41 billion and $43 billion, and gross margin between 37.5 percent and 38 percent. Operating expenses are forecast between $6 billion and $6.1 billion, with other income of $300 million, and a tax rate of 25.5 percent.
Apple's international business continues to account for a larger share of the company's presence, reaching 67 percent of revenue during the last quarter. The company also announced that its Board of Directors has authorized an increase to its capital return program by $50 billion.
"We generated strong operating cash flow of $11.6 billion and returned $10 billion to shareholders through our capital return program during the March quarter," said Apple Chief Financial Officer Luca Maestri. "Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion."
So what was the consensus from analysts prior to Apple's latest results being announced a few hours ago? Per PED $52.2 billion revenue (a 10% decline), 51 million iPhones (a 15% decline), 9.9 million iPads (a 20% decline) with Mac sales constant at 4.5 million.
They weren't as far off as some might have thought they would be tho the miss on revenue was a little higher than they expected.
So what was the consensus from analysts prior to Apple's latest results being announced a few hours ago? Per PED $52.2 billion revenue (a 10% decline), 51 million iPhones (a 15% decline), 9.9 million iPads (a 20% decline) with Mac sales constant at 4.5 million.
They weren't as far off as some might have thought they would be tho the miss on revenue was a little higher than they expected.
Thanks for the sobriety.
Tho revenue came in under expectations it was still at least at the low end of Apple's own guidance from the last quarter. I would have thought the less-than-stellar results would therefore have already been factored into the stock price since Apple had already said they should be expected.
So yet more validation for my general avoidance of the stock market. Yaw'll have fun, I'll just stick to investing in business. That's something I understand.
Tho revenue came in under expectations it was still at least at the low end of Apple's own guidance from the last quarter. I would have thought the less-than-stellar results would therefore have already been factored into the stock price since Apple had already said they should be expected.
So yet more validation for my general avoidance of the stock market. Yaw'll have fun, I'll just stick to investing in business. That's something I understand.
The fact that it came in at the 'low end' of guidance is not relevant. It really is all about what the market expected, isn't it.
macplusplus said: You always pay with what you own. If you made such a decision as to stock yuan in Chinese banks you may need to dump these before the yuan gets devaluated. That's another issue, these will reflect to your balance in US$, your balance is always hold in US$, as well as your contracts, unless you are the owner of that foreign company. I'm not an economist either. If your currency is strong you always gain. Foxconn makes you an offer, in USD, you accept or reject based on your profit analysis. Foxconn also wants to get its revenue in stronger currency, this is how international trade works. They want to make business with you because you are a wealthy man who has something valuable. If you don't pay them in USD they won't do any business with you.
Well we don't know that Foxconn bids in USD. For all we know they may bid in NTD since they are a Taiwanese company. All I'm suggesting it is possibly better to cash out their holdings inYuan that are collected from sales of iPhones and sitting in China banks even if you had to pay to convert it to USD. There is no shortage of USD in China. Even if you pay a premium to sell your Yuans for dollars it is probably still better than sending dollars from the US.
On the other hand might be more likely that China will take off the artificial curbs on the valuation of their currency and let it be subject to the international market which could see it increase in value. Who knows, Foxconn might not mind getting paid in Yuan since they are paying a lot in wages and infrastructure expansion in China. There are just too many factors for us armchair finance experts to provide any definitive answers.
Maybe all those that thought apple was so great are finally realizing that Apple products are hyped and way overpriced.
So Apple needs to lower prices otherwise face the consequences of lost revenues and eventually going out of business.
The iPhone should be cut by $50, $75, $100 for its each size capacity. The iPad Pro 9.7 inch should be cut by $100, $150, $200. The iPad Air 2 should be cut by $100 too. The iPad Pro 12.7 should be cut by $200 (32 GB) and $300 (128 GB). Why in the world isn't there a multi-user version of iOS for the iPad Pro by now. Just another example of how Cook has really dropped the ball on software development (besides iTunes, mapping, and SIRI).
Maybe all those that thought apple was so great are finally realizing that Apple products are hyped and way overpriced.
So Apple needs to lower prices otherwise face the consequences of lost revenues and eventually going out of business.
The iPhone should be cut by $50, $75, $100 for its each size capacity. The iPad Pro 9.7 inch should be cut by $100, $150, $200. The iPad Air 2 should be cut by $100 too. The iPad Pro 12.7 should be cut by $200 (32 GB) and $300 (128 GB). Why in the world isn't there a multi-user version of iOS for the iPad Pro by now. Just another example of how Cook has really dropped the ball on software development (besides iTunes, mapping, and SIRI).
How often did Steve Jobs cut prices as CEO. Besides the original iPhone price reduction.
Tho revenue came in under expectations it was still at least at the low end of Apple's own guidance from the last quarter. I would have thought the less-than-stellar results would therefore have already been factored into the stock price since Apple had already said they should be expected.
So yet more validation for my general avoidance of the stock market. Yaw'll have fun, I'll just stick to investing in business. That's something I understand.
Comments
You simply can't wish away a whole year of operations. You're forgetting the simple fact that many investors -- including yourself, if you'll recall -- bought in the 110s, 120s, and 130s, chasing that performance. An expectation that was not delivered, so it's obvious that the stock price has taken a beating. Nothing unusual about it.
I agree with you about Apple's long-term prospective, but the short run is going to be rough.
Everyone in the world knew that Apple is coming with big screen phone and they were waiting for that big screen phone in 2014.
Because of that 2014 sales would show lower sale numbers otherwise it would have been in normal year.
Obviously lot of sales of 2014 got moved to 2015 big screen phone release.
2014 sales would have been higher otherwise, in that case Apple still didn't show growth in iPhone/iPad/Mac sales compared to 2014 year.
Thanks.
Then again I hope that all of the other big companies do just as well, including Alphabet, Facebook, Amazon, Microsoft, etc. I have never once used Facebook for example, or bought any of their stock directly. But I hope they do well for at least the next ten, twenty, thirty years.
The better the overall market performs, the better off we all are.
I'm sure you have been following this:
http://www.npr.org/2016/03/10/469897691/armed-with-an-index-fund-warren-buffett-is-on-track-to-win-hedge-fund-bet
While investing in individual stocks is certainly fun and exciting, sticking to the index works out pretty well if you are in it for something like 10 years or even longer term. Of course anyone who went heavy on AAPL ten years ago is very pleased with their investment regardless.
Anyone buying AAPL today and holds it for 10 years will likely also be very pleased.
Anyway I am not telling you anything you probably don't already know, just thought I would chime in with my 2 cents. Hopefully my 2 cents will be worth at least 6 cents in 10 years
"Before I turn over the call to him, I'll summarize by saying the future of Apple is very bright. Our product pipeline has amazing innovations in store. We're very excited about bringing together developers for our four major platforms at our world wide developers conference in June."
and during Q&A:
"We also look at our pipeline and are very excited about what's in our pipeline."
Per PED $52.2 billion revenue (a 10% decline), 51 million iPhones (a 15% decline), 9.9 million iPads (a 20% decline) with Mac sales constant at 4.5 million.
They weren't as far off as some might have thought they would be tho the miss on revenue was a little higher than they expected.
So yet more validation for my general avoidance of the stock market. Yaw'll have fun, I'll just stick to investing in business. That's something I understand.
And as to investing, well, each to his own.
On the other hand might be more likely that China will take off the artificial curbs on the valuation of their currency and let it be subject to the international market which could see it increase in value. Who knows, Foxconn might not mind getting paid in Yuan since they are paying a lot in wages and infrastructure expansion in China. There are just too many factors for us armchair finance experts to provide any definitive answers.