Apple's last record quarter: Why Apple loves China, but hates sales figures
It is another record quarter as part of a record year for Apple. Revenues were almost $ 63 billion, profits were over $ 14 billion, and for Apple generated $ 265 billion in revenue and almost $ 60 billion in profits. It is the company's eighth straight quarter of revenue growth and that growth has accelerated each of these quarters. This is a healthy company; You can not find a healthier if you tried.
Yes, Apple's stock is hit because the guidance – how much money it expects to do in the current quarter – is actually slightly below what Wall Street analysts expect. For the record, Apple's revenue has dropped to between $ 89 and $ 93 billion ̵[ads1]1; that is, the highest revenue Apple has ever generated in a quarter and somewhere between 1 and 5 percent growth. In other words, get ready for another disc in the Apple quarter because it's getting huge.
As always, it is worth reading between the lines in the federal mandates for financial information and listening to the details of the company's ritual telephone conversation with financial analysts to see what else is on the company's mind. Here are some things I noticed.
iPhone Shipping Shipment
IDG iPhone XS and MX Max.
One of the reasons Apple cited for its forecast for slower revenue growth next quarter than in the previous quarter is the simple fact that the iPhone rollout strategy is the opposite of the strategy last year. Then they sent the lowest models (iPhone 8 and 8 Plus) months before the higher priced iPhone X. This year, conversely true, with iPhone XS and XS Max shipping until the end of the quarter, the iPhone XR does not deliver until just a week ago.
The implication is that during the quarter of last year, the first wave of iPhone X sales occurred, while this quarter will miss the release of the iPhone XS and XS Max entirely. This is what they call, in the explanatory thing-to-analysts business, a "tough comparison." (It's phrasing Apple CFO Luca Maestri spent the conversation when asked about the earnings guide of analyst Shannon Cross.)
Tim Cook likes China and the global economy
If you've listened to Tim Cook in recent years, you know that he has been and remains bullish on the future of Apple in China. When asked on Thursday by analyst Wamsi Mohan that Apple is seeing downturns in some emerging markets, Cook pointed out problems that caused Apple to increase prices (which hurt sales) in some countries: Turkey, India, Brazil and Russia were the markets he said.
Apple Apple's Tim Cook worked bullish on China's Apple Q4 2018 finanicals call.
But Cook went out of his way to exclude China from Mohans thinking. "Our business in China was very strong last year, we grew 16 percent," he said, citing strong iPhone growth.
The cloud that hangs over all discussions in China is the possibility that an escalating exchange of tariffs and other aspects of a trade war can harm Apple, collecting many of its units in China, as well as selling many products there. Analyst Katy Huberty asked Cook if he had plans to diversify Apple's supply chain, presumably to provide the company with assurance of production if the US-China relations deteriorated to the point that they could affect Apple's ability to produce and ship products.
Cook would not have any of it. First, he rejected the premise of the question, pointing out that Apple products are "truly produced everywhere", with contributions from the United States, Japan, Korea and China.
He explained why this is the best approach. "I think the basic model, where you look around the world and find the best in different areas, I do not expect the model to go out of style," he said. "I think there is a reason why things have developed that way and I think it's great for all countries and residents in countries involved in it. And I'm still in the mind that I feel very optimistic and positive . "
Tim Cook is excited about health and AR
It's not an analyst as well as trying to marry a future product direction from the usual buttoned-up Apple. This time, Wamsi Mohan was tempting Cook with a question about Apple's future role in health care. And Cook, surprisingly, answered with a vague, yet positive response:
Apple Appe did not go closer during its financial conversation, but it is clear that the company thinks healthcare is a a big part of the future, as discussed during the Apple Watch event in September.
"Apple has a great opportunity in health and you can see from recent years that we have a lot of interest in the room and add products and services … I do not want to talk about the future because I will not give away what we but this is an area of great interest to us. "
Look, most of the time you will ever come out of an Apple CEO regarding future product directions. Expect everyone else to spend the next six months and try to interpret what Cook can mean that health is "a big opportunity" and "an area of great interest."
Meanwhile, another area of great interest-enhancing reality is Cook's heart singing. Analyst Mike Olson cited a decline in stories that AR and Cook jumped in to proclaim that he has "another opinion" in the matter. He told him he was seeing demos of new AR products that were built during his travels around the world last year and said he is "very pleased with where things are at the moment."
10 units or less
Finally, in a bit of A surprise, Apple announced that it would no longer report the number of individual products the seller begins next quarter. This means that while we still know how much Mac, iPad, and iPhone revenue generates every three months, we can no longer see exactly how many Macs, iPad and iPhones Apple sells
Jason Snell Enjoy charts like this now because you will never see them again.
Maestri chalked this change up to the fact that Apple feels the numbers may be misleading since the company does not break out which models sell well in the quarter, Apple said that iPhone had a strong iPhone growth at the high end of the product line, but it was hidden by an overall flat unit sales number. Of course, Apple's current strategy seems to be increasing sales at a time of flattering sales growth, and this move is part of that strategy. Also, let's not forget that if Apple really wanted to communicate how well certain models do in the sale of a device, it can reveal that information.
Makes no mistake: This is about Apple's limitation of the information it describes about its business. Since apparently there are no federal regulations that require companies to disclose unit sales (as opposed to revenue), we will not see these numbers anymore. Instead, we will be left guessing, based on revenue figures, sporadic fact cast out of Apple leaders in analyst calls or on slideshows on media events, and (often bad) estimates of independent analysts.
Or you can take Tim Cook's view, through a somewhat strange supermarket analogy that ended up being the last words of Thursday's long-time analyst. The growth of the installed base (a number that can be defined in a variety of ways so that it reflects what you want it to reflect) and customer loyalty figures are more important than the unit number, he said. And besides who cares how many items you have in your shopping cart when you get out of your credit card at the control panel?
"It's a bit like you go to the market and you push your cart up to the cashier and she says or says," How many units do you have there? "It does not matter how many units it is there when It's about the total value of what's in the cart. "
I I'll Remember It The Next Time I Buy Peanut Butter On Whole Foods.
