This is so dumb and of course, an overreaction to get people to give up their shares. Apple sales are only down because of the pandemic and the abnormal demand. Also, analyst forgets I guess about crazy inflation on other goods which cause people to have less money. Seems like an amazing quarter to me. Image any other tech company having a quarter like this? Also such a manipulated stock. All other tech companies are terrible but we give them a pass because they stink. As far as Apple prices they are not expensive compared to other high-quality products. No one complains about the cost of an LV purse, or a Rolex, or any other high-end brand. Shop at Walmart and buy crappy tech products if you don't have any more money. I'll stick with the best...
This is actually a very good quarter. I am impressed.
The small decline in revenue was predominantly from iPad and Macs for which we are comparing Q 2022 that benefitted from M2 Mac launches and Q 2023 which did not. We saw new Macs just recently being announced. iPad refresh also has not happened yet in 2023. Best is yet to come.
Highest margin segments iPhone and Services grew. Home/Wearables was almost flat. This is a strong showing by Apple.
All of this to the backdrop of a killer macro economic climate and FX head winds. I mean the world is deep fried bananas.
The more I look at the numbers, the more confident I feel that Apple is riding the economic tectonic plates like a pro surfer. And this while investing heavily into new major product categories like Vision Pro.
Edited - The more I run the numbers in chatGPT data analysis the more I love this Q. Gross margin of services is up YoY (up ~0.5% points). Services represent ~25% of total sales but is ~40% of total gross margin. (2022 numbers were 21.3% and 35.5%). Installed base keeps growing and gooses the services volume. Good times.
Agreed. Seven years ago analysts were consumed with concern about the decline of the iPhone and what Apple could possibly introduce to offset the coming loss of that high-margin product. Yet here we are, with even higher margin Services that are at $100 billion and growing, while iPhone revenue and margins have also grown.
And your point about Vision Pro is salient; this enormously complex R&D effort must be drawing upon Apple's best and brightest, pulling away R&D energy needed to advance existing product lines, and yet those product lines continue to lead the industry. Apple's R&D, marketing and sales engines are well tuned and humming along, present global geopolitics and economic dislocations notwithstanding.
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Now you’ve also increased your One subscription prices globally. Third time in 2-3 years too if you’re outside of the US. TV is useless, you’ve to pay for most of the non stuff. Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
I understand where you’re coming from, really, as a fellow Brit I do.
Having said that I think your argument, at least when it comes to the iPhones, is flawed.
In 2009 the exchange rate hovered around $1.55 to £1 & VAT (sales tax to our US friends) stood at 15%.
Today we are hammered by a mixture of a US Dollar that is arguably over-strong against international currencies, trading at around $1.25 to £1 for a while now and a much higher VAT rate of 20%.
You also need to consider that the Pro Models are effectively a new category. It’d be like everyone buying a MacBook Air and then Apple introduced a MacBook Pro.
It’s hard to get an exact price on the iPhone 3GS as back then it was all on contracts with a smaller amount upfront. Still, the base iPhone 3GS was $499 in the US, so we can use that.
Adjusted for inflation $499 would be $716 today. For a new iPhone 15 the cost is $799. Yes, Apple is making a bit more. Tim Cook is a greedy bastard, but then as CEO it’s his job to make as much money as possible and really you’re not paying that much more than you did back in 2009, at least not in dollar terms.
Yes, here in the U.K. we are worse off than 2009. But most of that is due to tax rises and a much stronger dollar and both of those items are outside of Apples control.
I agree with you on the Apple One side though, Apple are taking the piss there with so many price rises.
Luckily the iPhone is not a dozen eggs. When the product remains the same, we can calculate whether its price today has risen more, the same as, or less than inflation. But technology products like the iPhone offer far more utility today than they did 14 years ago. Technology is massively disinflationary, so the value proposition is far higher for an iPhone 15 (base model) today at $799 versus an iPhone 3GS at $499 back in 2009.
An example of a no growth non innovating tech companies would be the current Xerox, Kodak, or IBM, do you think Apple is any of them? Each one hasn’t released any new products that anyone sane would want to buy in a long time, maybe Watson can come up with something?
Apple has many years left, start to worry when they are no longer producing any new interesting products, which they haven’t shown any signs of stopping, they have so many directions they can go as a vertical computer company, and Apple currently is the last man standing from the 1980s in that regard.
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Your price comparing to the top of the line model. You should compare to the base iPhone.
That’s because that was the top of the line iphone model. It was a much simpler choice then.
I have to admit I’m Apple saturated and starting to really dislike the company.
I’m Dyson saturated, the first Dyson vacuum cleaner I bought still works very well over 15 years later and shows no signs of going away, it cost a lot at the time but it was worth it, I now have the wireless Dyson vacuum cleaner for upstairs and it also cost a lot and it looks like it’s not gonna go away anytime soon, the cliché that you get what you pay for is very true, and that definitely applies to Apple products too.
So true. Apple products are wise investments, not impulse throwaway buys.
My mom used to go through HP and DELL PCs every single year. It was crazy. Finally I convinced her and my dad to go Mac. That was 2015. Moms 15” MacBook Pro and their 27” iMac 5k are still cranking along, looking and operating like brand new. Apple really is a fantastic company.
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Now you’ve also increased your One subscription prices globally. Third time in 2-3 years too if you’re outside of the US. TV is useless, you’ve to pay for most of the non stuff. Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
Honestly, try reading a financial report before you post foolishness like this. Pissed off with phone prices? They just reported the best iPhone Sept quarter ever. How? Because the most expensive Pro models made up a larger portion of the sales mix, thereby boosting revenue and profitability. So if demand is greatest for the most expensive phones, how is THAT a sign of a price problem, hmmm? Do you realize that "Apple is doomed, their prices are too high" is a worn out trope that's been around for as long as Apple has been a company? Not only has it not come true, but Apple grew to become the most successful company by market cap in the history of companies. So much for the doomsayers.
As for your complaints about Apple One pricing and your lack of need for its various services, here's a thought: don't buy it! Problem solved! And why would you subscribe when there's so much about it you don't need or like? iCloud is rubbish but you "need" it? Really? You need a rubbish cloud backup? Strange.
Mac sales downturn doesn’t surprise. Obsession on performance upgrades does not generate sales as there is no performance problem with macs. Focus should be on innovation in other areas. And still wait for a M3 27 inch iMac.
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Now you’ve also increased your One subscription prices globally. Third time in 2-3 years too if you’re outside of the US. TV is useless, you’ve to pay for most of the non stuff. Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
25 years ago, my mother purchased an iMac G3 (1998), for $1,299 Today you can get an iMac M3 (2023), for $1,299
Today's iMac M3 is easily 1000x faster than that iMac G3, and these are strictly base models.
You need to get out of your rudimentary thinking of "Spread the Wealth" philosophy and learn to live with Apple's "Spread the Power" philosophy...
The iPad line dropped last year and now again. Mac... massively 34% down - all products shipping for the first time, but the new MBA 15 and better pricing for MBA 13 didn't work. iPhone... flat. If 50% of iPhone customers are new and sales are flat... then something is wrong. Obviously FineWoven is wrong, and attach rates must have dropped... but there seems to problems across the range. It isn't like Mac doesn't have room to grow based on current single digit global market share.
What to do? I would like to see less nerfing and fewer products.
I used to buy Apple products more frequently but started to wait longer. For example I have a Mac Mini M1 with 16gb and don’t feel the urge to switch to a M3 when it’s out.
My MacBook Pro 2017 I really hate and an M3 would be the one to replace, but that’ll have to be a baseline M3 MacBook Air because I’m no longer willing to pay top prices and contribute to exorbitant margins Apple is aiming for.
I wait 3 generations before getting a new phone. They are now capable enough and all innovations feel contrived to keep us buying them.
If Apple wants to increase revenues they’ll have to give up some profits. They have become to greedy IMHO.
I like Apple but they are not always making it easy to do so anymore. I miss the feeling that was kind of "it is us users and Apple together". Now it is more "it is us customers and Apple on the other side profiting on us". Of course Apple is a company and it is interested in making profits, it was of course like that earlier on too but this feeling of being profited on is quite obvious now, more than it used to be. Apple was also doing things that made you think "Wow, this works so much better than the average solution" or "Why didn't anyone think of this smart feature before" but it is getting more and more into "Why did Apple make it this way, it is so user unfriendly". I never understood those IT guys at some companies complaining about Apple and Mac OS. But nowadays I understand them more since I heard that they don't always get the best info to adjust their systems (containing some Mac users) before Apple changes some technologies drastically that mess things upp. I don't know if Microsoft do that better but it seems so. I still like Apple though, but please listen more to your customers even if you think you have a smarter solution or at least explain more why some features is so much better from your opinion. And, yes - lower the prices. I know very well the importance of pricing on perceived value and as a marketing tool. But has it not got a bit too far? No need to "make the best products" if people can't afford them and if companies choose to have non Mac policies partly because of the price (and the non communication as I got it). Think different!
The company only exist for one purpose. Make money. Any company does not make money will close down. Recently WeWork going to bankruptcy process soon. How many WeWork worker will be losing their job soon? So far Apple did not major layoffs even Google, Meta, Microsoft did recently.
look at the Samsung phone line up. They have cheap to middle and expensive phones, but margin does not catch up to Apple iPhone. I am keep saying too many models line up will always less sales due to lots of consumer having decision anxiety.
That's why Apple only provide specific model nothing more. All those failed company had too many models. Such as Nokia. And even Microsoft did the same thing for mobile business. That's why they failed.
Also no one dare to increase their phone price over $1000 until Apple did. Why? Apple know some people willing to pay something new, shine product. So far Apple delivered. That's why they are still top dog.
Apple share their profit with shareholder. Which any public company should. If you complain about Apple's price, then either you should own Apple stock so you can get dividends to pay your Apple products or make more money. Why are you buying thing that you cannot afford it?
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Now you’ve also increased your One subscription prices globally. Third time in 2-3 years too if you’re outside of the US. TV is useless, you’ve to pay for most of the non stuff. Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
Saying that your original 3G phone is the equivalent to a Pro Max and then comparing prices is ludicrous. Comparing to an iPhone SE would be more appropriate. And even in that case the functionality and capability are so different. Apple is an expensive brand. They do lots of things to piss off customers in terms of costly memory and storage upgrades, which I think in the long term hurts the brand. They excel at hardware architecture and design. They are not as strong with software. There’s room for much improvement in cloud services. Despite their humongous size, I think they are getting stretched thin which shows in their software shortcomings and trying to offer too many services. They might actually benefit from getting out of some of their services. As well as stopping the marketing department from controlling what tech gets offered in their products.
This is so dumb and of course, an overreaction to get people to give up their shares. Apple sales are only down because of the pandemic and the abnormal demand. Also, analyst forgets I guess about crazy inflation on other goods which cause people to have less money. Seems like an amazing quarter to me. Image any other tech company having a quarter like this? Also such a manipulated stock. All other tech companies are terrible but we give them a pass because they stink. As far as Apple prices they are not expensive compared to other high-quality products. No one complains about the cost of an LV purse, or a Rolex, or any other high-end brand. Shop at Walmart and buy crappy tech products if you don't have any more money. I'll stick with the best...
Apple is a mass market consumer company. You can’t compare them to Rolex and LV. The market is giving Apple an adjustment because the stock trades at a huge P/E ratio and they are struggling to grow revenue. You also just discount the effects of inflation. That’s a huge factor and forces people to focus their spending on necessities and hold on to any tech they already have. Your line about shopping at Walmart if you don’t have any more money shows you to be a person with no insights and a lack of empathy.
Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation.
Now you’ve also increased your One subscription prices globally. Third time in 2-3 years too if you’re outside of the US. TV is useless, you’ve to pay for most of the non stuff. Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
According to your logic Apple is lying about their profit margins only being 35% annd they must be much much higher and if so where are they hiding the money?
I used to buy Apple products more frequently but started to wait longer. For example I have a Mac Mini M1 with 16gb and don’t feel the urge to switch to a M3 when it’s out.
My MacBook Pro 2017 I really hate and an M3 would be the one to replace, but that’ll have to be a baseline M3 MacBook Air because I’m no longer willing to pay top prices and contribute to exorbitant margins Apple is aiming for.
I wait 3 generations before getting a new phone. They are now capable enough and all innovations feel contrived to keep us buying them.
If Apple wants to increase revenues they’ll have to give up some profits. They have become to greedy IMHO.
Their overall revenue drop was minimal (1-3%) and it's being compared to record revenues from recent years. Their margins have been fairly consistent over time:
Over 13 years, operating margin has been 24-35%. Net margin 20-27%.
The margins just feel higher when the prices go up. If you buy a Mac mini, $500 x 30% = $150. If you buy a top spec MBP, $4000 x 30% = $1200.
Paying $1200 in profit feels more like being exploited than paying $150. If Apple made $600 (15%) margin on a $4000 product and that M3 Max spec MBP was $3400 instead, it wouldn't feel so bad. But then Apple has to sell twice as many to make the same profit.
Resellers and refurb sites have some decent prices on older models now, not too far off the entry $1000-1300 Air and you get the XDR display:
Another factor in this is that people's income in recent years haven't been keeping pace with price increases so premium consumer items like Macs and top-end iPhones are starting to feel like they are unaffordable.
If Apple cut their margins and boosted revenue, the reports would say their profits are down YoY and people would still say that the prices are too high.
Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia.
If they did that they will end up like Nokia too. You are comparing most expensive iPhone with the least expensive competitors BTW. Please do correction. Samsung is already as expensive as the most expensive iPhone if not even more.
You know if you had bought an original iPhone and left it in an unopened box you could have purchased a hundred plus of todays top models for what you could have sold the original for…
Comments
Luckily the iPhone is not a dozen eggs. When the product remains the same, we can calculate whether its price today has risen more, the same as, or less than inflation. But technology products like the iPhone offer far more utility today than they did 14 years ago. Technology is massively disinflationary, so the value proposition is far higher for an iPhone 15 (base model) today at $799 versus an iPhone 3GS at $499 back in 2009.
Apple has many years left, start to worry when they are no longer producing any new interesting products, which they haven’t shown any signs of stopping, they have so many directions they can go as a vertical computer company, and Apple currently is the last man standing from the 1980s in that regard.
As for your complaints about Apple One pricing and your lack of need for its various services, here's a thought: don't buy it! Problem solved! And why would you subscribe when there's so much about it you don't need or like? iCloud is rubbish but you "need" it? Really? You need a rubbish cloud backup? Strange.
Today you can get an iMac M3 (2023), for $1,299
Today's iMac M3 is easily 1000x faster than that iMac G3, and these are strictly base models.
You need to get out of your rudimentary thinking of "Spread the Wealth" philosophy and learn to live with Apple's "Spread the Power" philosophy...
You sound lost.
What to do? I would like to see less nerfing and fewer products.
My MacBook Pro 2017 I really hate and an M3 would be the one to replace, but that’ll have to be a baseline M3 MacBook Air because I’m no longer willing to pay top prices and contribute to exorbitant margins Apple is aiming for.
I wait 3 generations before getting a new phone. They are now capable enough and all innovations feel contrived to keep us buying them.
If Apple wants to increase revenues they’ll have to give up some profits. They have become to greedy IMHO.
Recently WeWork going to bankruptcy process soon.
How many WeWork worker will be losing their job soon? So far Apple did not major layoffs even Google, Meta, Microsoft did recently.
look at the Samsung phone line up. They have cheap to middle and expensive phones, but margin does not catch up to Apple iPhone.
I am keep saying too many models line up will always less sales due to lots of consumer having decision anxiety.
That's why Apple only provide specific model nothing more. All those failed company had too many models. Such as Nokia. And even Microsoft did the same thing for mobile business. That's why they failed.
Also no one dare to increase their phone price over $1000 until Apple did. Why? Apple know some people willing to pay something new, shine product.
So far Apple delivered. That's why they are still top dog.
Apple share their profit with shareholder. Which any public company should.
If you complain about Apple's price, then either you should own Apple stock so you can get dividends to pay your Apple products or make more money.
Why are you buying thing that you cannot afford it?
https://www.macrotrends.net/stocks/charts/AAPL/apple/operating-margin
https://www.macrotrends.net/stocks/charts/AAPL/apple/net-profit-margin
Over 13 years, operating margin has been 24-35%. Net margin 20-27%.
The margins just feel higher when the prices go up.
If you buy a Mac mini, $500 x 30% = $150.
If you buy a top spec MBP, $4000 x 30% = $1200.
Paying $1200 in profit feels more like being exploited than paying $150. If Apple made $600 (15%) margin on a $4000 product and that M3 Max spec MBP was $3400 instead, it wouldn't feel so bad. But then Apple has to sell twice as many to make the same profit.
Resellers and refurb sites have some decent prices on older models now, not too far off the entry $1000-1300 Air and you get the XDR display:
https://www.apple.com/shop/product/FPHE3LL/A/ - 14" M2 Pro, 16GB/512GB = $1599
https://www.apple.com/shop/product/FK183LL/A/ - 16" M1 Pro, 16GB/512GB = $1839
Another factor in this is that people's income in recent years haven't been keeping pace with price increases so premium consumer items like Macs and top-end iPhones are starting to feel like they are unaffordable.
If Apple cut their margins and boosted revenue, the reports would say their profits are down YoY and people would still say that the prices are too high.