”Biggest ever” iPhone launch drives strong Q4 Apple financials

Apple's fiscal fourth quarter financial results are in, and as expected, the iDevice maker raked in a boatload of money. For the three months ending September 27, Apple made $8.5 billion in profit on revenue of $42.1 billion. Both figures represent double-digit increases over the same period last year.

  Q4'14 Q4'13 Change
Revenue $42.1 billion $37.5 billion up 12%
Net profit $8.5 billion $7.5 billion up 13%
Gross margin 38% 37% up 1 point

The iPhone 6 and 6 Plus launched during the quarter, and they evidently had a big impact. In the press release announcing the Q4 results, CEO Tim Cook rather appropriately describes the arrival of the latest handsets as "the biggest iPhone launch ever." iPhone shipments increased 16% year-over-year, and revenue from those shipments surged 21%.

Mac sales were also up substantially over Q4'13, suggesting a lot of students picked up new MacBooks during the back-to-school season. They apparently weren't buying as many iPads as last year, because tablet sales declined by double digits. Here's the breakdown by device category:

  Q4'14 Q4'13 Change
  Units Revenue Units Revenue Units Revenue
iPhone 39.3 million $23.7 billion 33.8 million $19.5 billion up 16% up 21%
iPad 12.3 million $5.3 billion 14.1 million $6.2 billion down 13% down 14%
Mac 5.5 million $6.6 billion 4.6 million $5.6 billion up 21% up 18%
iPod 2.6 million $410 million 3.5 million $573 million down 24% down 28%
Other   $6.1 billion   $5.6 billion   up 8.9%

Apple released its latest iPads after the fiscal quarter ended, so some folks may have held off making purchases in anticipation of the new hotness. However, Apple has also reported negative year-over-year iPad growth for the last few quarters in a row.

Looking ahead to the holiday quarter, Apple expects revenue in the $63.5-66.5 billion range and a gross margin from 37.5-38.5%. For reference, the company reported $57.6 billion in revenue and a 37.9% gross margin during the holiday quarter last year.

Comments closed
    • blastdoor
    • 6 years ago

    Interesting — I just read that the A8X has three CPU cores.

    That helps explain some of the extra billion transistors.

    • Vrock
    • 6 years ago

    My work phone is a 6 and I bought my wife a retina mini for her birthday.

    I prefer the Droid (any droid) to the 6. The mini is ok. Proprietary connections, non-user serviceable battery, no SD slot or way to expand the capabilities of the machine.

    The reason Apple is successful is not because they offer a superior product. The reason they are successful is 10% innovation, and 90% marketing. This is why tech no longer interests me. Back in the 90s, one had to be knowledgeable about tech to use tech. These days, tech is a commodity that any idiot can exploit. And that’s what gives the world Apple products. They’re designed for the lowest common denominator, but marketed as being hip and cool and unique. Best. Marketing Ploy. Ever.

      • adisor19
      • 6 years ago

      Yeah, this is why A8X is moping the floor with any third party tablet SoC out there. Must be all that powerful marketing and not the billions that Apple invested in R&D to design the chip.

      Sorry brah, but you’re stuck in the 90’s. Times have changed. Technology not only has become affordable but also accessible by everyone and part of is is thanks to Apple’s introduction of the original iPhone in 2007.

      Adi

      • End User
      • 6 years ago

      I try and use the best tool for the for job at hand. That ranges from my home server (dual xeon ESXi), gaming PC (Windows 8.1) and Linux box (all built by me).

      When it comes to mobile/laptop/workstation I go with Apple products as their products are superior to anything else on the market as far as my needs are concerned.

      Back in the day you would have been angry at the invention of the wheel.

    • trackerben
    • 6 years ago

    The next big thing can’t be just another nicely-iterated iPhone. It’s going to be that plus Apple Pay, their plan to reshape the Visa/Mastercard credit cartel by extending the purchasing habits of their captured customer base. It’s the final clue to online marketing’s holy grail. If Apple succeeds, they will have achieved Jobs’ deepest vision, the first beautiful market offer-finance-settlement-fulfillment experience on one personal screen. Apple would neatly derive stable, generational rents from this long-predicted global exchange platform, would gain leverage with merchants focused on their spendy customer demographic. Amazon did manage to get the last part of the chain so far, but the logistics side is rarely the choicest play.

    If Apple Pay launches great, Cook and his team will be on their way to riding an immediate profit tsunami. Apple could wind up capturing much of the aggregate proceeds stemming from a likely global 1-2% reduction in credit transaction cost to all the world’s Apple-vetted consumers.

      • oldog
      • 6 years ago

      Apple Pay faces significant headwinds.

      As I understand it Apple Pay requires businesses to put in NFC capable scanning devices at a significant cost to the merchant with no particular upside.

      The other obvious issue is that it doesn’t work on the most common mobile OS, oh, and that whole Google Wallet thing.

        • trackerben
        • 6 years ago

        The trick is the projected revenue vs. actual. Every percent with which Apple undercuts rival credit or stored value fees at point-of-sale translates to $millions in fungible savings. IF total Apple Pay transactions can be trended to capture well above 10% of daily gross proceeds across a fully-deployed network, that would enough to interest national merchants who target (ahem) similarly to Apple’s demographics. For critical accounts, Apple could always quietly negotiate lower fees or subsidize the hardware, as Visa/Mastercard banks traditionally do for valued clients.

        If enough indentity-secured, Android 4.2+ users overcome their tepid and wary online economic behaviors to actually fund a substantial portion of their daily purchases, then the Googlish might yet conquer the Appled. That’s not the campfire story you’re going to hear at their tent, but it’s the bottom-line bet.

          • oldog
          • 6 years ago

          My take away from the iOS v. Android data showing that iOS users buy more Apple related stuff… is just that. Apple users are more locked into the Apple ecosystem. I do not believe that this in any way reflects their purchases on say Amazon or at the local grocery store.

          I would be surprised if there was data to show, for instance, that Apple users buy more stuff at Best Buy. Neiman-Marcus maybe.

            • trackerben
            • 6 years ago

            Yes Apple may not have the data. But chances are, market research firms can provide them an idea of the prospects. A new pre-tax cost reduction along with better e-payment processing and anti-fraud features should be worth a try for big stores.

            • blastdoor
            • 6 years ago

            Apple users are higher income. They buy more, period.

            • oldog
            • 6 years ago

            Like my gardener?

        • derFunkenstein
        • 6 years ago

        The big upside should be a reduction in fraud on those purchases. You have to have Touch ID + NFC. So not just “card present” via the phone, but “finger present” as well.

        • blastdoor
        • 6 years ago

        As I understand it, the law is changing next year so that retailers that do not support newer, more secure technologies like Apple Pay will be liable for fraud instead of the credit card companies. I think that’s a pretty good incentive. Apple has picked the perfect time to roll this out — they’re putting their marketing behind this right at the time that retailers have to install new equipment anyway.

          • trackerben
          • 6 years ago

          That explains much. Retailers are notorious for underinvesting in POS and a legal shift in liability changes the odds.

        • adisor19
        • 6 years ago

        Those NFC terminals are omnipresent in most Canadian retail stores/gas stations/you name it. It’s mainly USA that is behind the times.

        Give it 1 – 2 years, and things will be MUCH more different.

        Adi

          • trackerben
          • 6 years ago

          What payment system do those usually work with?

      • adisor19
      • 6 years ago

      Pretty sure Apple has already been riding a profit tsunami for a few years now..
      Adi

    • kamikaziechameleon
    • 6 years ago

    I projected doom and gloom for apple and was wrong yet again! 😛

      • trackerben
      • 6 years ago

      Like it’s miracle!

    • Chrispy_
    • 6 years ago

    To put a spin on Apples negative year-over-year iPad growth, I think it’s fair to say that people walk into a store and see a whole bunch of tablets for £99 or $150 and they look good.

    Those budget tablets have vibrant IPS screens, they run Android with a huge app library and there are no caveats like silly adapters and bespoke cables. You just plug in a USB cable and off you go.

    Then on the same aisle in the store there’s an iPad mini for $400 or a large iPad Air for $600 with their weird iTunes dependancy and complicated array of expensive adapters and connectors.

    “What can this tablet do that those tablets can’t? Why is this one three times the price? That’s what I’ve heard real people ask real sales assistants in real brick-and-mortar stores. If you’re already heavily-invested in Apple’s ecosystem it makes sense to grit your teeth and pay the astonomical premiums for the sake of conveniece, but they [i<]really[/i<] are [b<]charging you an absolute fortune[/b<] for the priviledge, and I know a lot of die-hard Apple fans who are sick of it, or who have already switched.

      • derFunkenstein
      • 6 years ago

      it’s definitely race-to-the-bottom time for tablets. Apple itself is trying to race to the bottom with a $249 iPad Mini, but truth be told even a $99 Kindle Fire HD 6″ is plenty fast enough.

      • blastdoor
      • 6 years ago

      I know there is a large number of android phone apps, is there also a large number of tablet apps?

      Either way, though, I think there are a lot of people who just want a tablet for web, email, ebooks, and video. For those users either a kindle or an old iPad are totally sufficient.

        • Chrispy_
        • 6 years ago

        On Android there aren’t really phone apps and tablet apps, there are mostly just Android apps.

        Because Android runs on such a huge range of devices with varying resolutions, sizes and aspect ratios, the vast majority of Android apps don’t care what size device you’re using and have been designed to work on both phones and tablets.

        I only use a handful of apps, but those same apps often look different on the 10″ tablet because it detects a much larger physical device and adds columns or sidebars or whatever. The Gmail app is one of the best for this, though that’s to be expected coming from Google on their own platform.

      • windwalker
      • 6 years ago

      Stop daydreaming and get a clue.
      iPhones and Macs sold very well and they are also expensive and come with proprietary cables.

      You hate Apple and so any negative result must be exactly because of the things about them that you hate.
      In reality, you don’t understand anything about Apple, their products or their customers.

        • Chrispy_
        • 6 years ago

        On the contrary, I spend a large portion of my time supporting Apple users and finding third-party workarounds for things that you really ought to be able to do on Apple hardware, but can’t officially because Apple say you mustn’t.

        I hate that Apple is financially rewarded by its customers for treating them so badly. It really has to be Stockholm syndrome!

          • windwalker
          • 6 years ago

          You’re clueless.
          Apple products are designed to be used like your car and your vacuum cleaner.
          You are most likely trying to administer them like you do your Linux or Windows machines and so you are fighting with their fundamental design.
          Stop being a smartass and the pain will go away.

          • blastdoor
          • 6 years ago

          Yeah, that’s what it has to be. There’s no other conceivable explanation.

          • trackerben
          • 6 years ago

          What are the things/workarounds which your users want which you say Apple doesn’t provide?

            • Chrispy_
            • 6 years ago

            Drag+drop files, file-browsers so that they can navigate folders, apps that require jailbreaking before they’re useful. That sort of stuff. It’s not rocket-science, but basic users have access to all these things on competing devices (we have a few Android tablets in the office pool) and just take them for granted until they pick up an iPad.

            • trackerben
            • 6 years ago

            Yes it’s a bother that capable filesystems are only exposed within iPad apps. Even exchanges with iTunes are handled too simplistically. I work with the operations strategy by using preferred file repositories like Dropbox, File App Pro, or even GoodReader as alternate transfer hubs and for copying/exporting to similarly-privileged apps. I’ve found free or cheap apps for just about anything it seems good for. Except for niches like maybe OpenVPN, or signals scanning (at which my big-battery droid is awesome), and of course proscribed torrents and black stuff. I’ve given up on jailbreak-for-apps as there are fewer reasons to do so vs. the uncertainties.

            I do accept the known trade-off of a robust systems architecture in having all user tasks, images, space, and interprocess aggressively siloed, restricted, and groomed in order to deliver a low-maintenance/high-availability architecture, one that even my Mom can’t abend.

            What are the restricted apps your users need jailbreaks for? Are these industrial or late-model-only imaging stuff? My own beef would be Apple’s non-licensing of Siri for older models like mine, although they’ve been great at providing iOS8.x updates.

      • sschaem
      • 6 years ago

      Hold a ~$150 tablet and use it for a few minutes, then do the same with an ipad 2 mini.

      Note: the mini start at $249, the ipad air at $399.
      And the ipad connector is a world apart from the cheap usb port found on most tablets.
      Again, its a quality thing.

      But you are correct to say that Apple doesnt offer devices in the sub $250 market,
      and because of this is not attractive to many people.

      So I think anyone that decided to go with Apple to find bargain HW is barking at the wrong tree.

      • alrey
      • 6 years ago

      in apple products, you’re paying for design and better implementation of features, albeit fewer.

      phone – ios is still smoother although android is catching up. making a call is faster on iphone.. swipe down and input contact. on android, it searches first on google before contacts.

      ultrabook – nothing beats mac air in design and there is boot camp or parallels for those who needs windows.

      tablets – ios is ahead on apps. there are many tablet versions of apps on ipad and the quality is generally better.

      mac mini – a good HTPC and connecting to NAS via samba. better looking than intel NUC.

      imac – best for those who just want to do internet, light multimedia, and light office work on a big screen.

    • Ushio01
    • 6 years ago

    iPad sales down to there lowest since the 1st quarter 2012 (Apple’s 2nd quarter 2012) and with the iPhone 6+ undoubtedly going to cannibalize iPad mini sales it’s all downhill from here.

      • tanker27
      • 6 years ago

      No doubt. I wanted a mini for the longest time, I was waiting for it to mature. However, since getting a 6 Plus I dont want a mini anymore.

        • derFunkenstein
        • 6 years ago

        I dunno. A 6 plus is bigger than I want to carry around (though plenty of people disagree) and I still find my Nexus 7 very useful.

        On the call, Tim Cook seemed to agree with you. Macs and iPhones both seem to be cannibalizing iPad sales, in Apple’s view. Some people would rather have a Mac over an iPad and thanks to the large margins and higher ASP, he’s not going to argue. And some people would just rather have a bigger iPhone, and he again doesn’t seem to mind.

        I don’t think the iPad line is going anywhere, though.

          • tanker27
          • 6 years ago

          You’re right derFunk, I am still trying to figure out how to carry my 6 Plus around. I can’t stick it in my front pocket like I could with my 5 and before. I don’t want to clip it to my belt. It’s almost too big. And strapping it to my arm in one of those armbands looks ridiculous at best.

          As for the iPad, there still will be niche for it. My wife uses my iPad OG for my sons games and movies. I use my iPad 3 when I travel to augment my work laptop. (heaven forbid I do something other than work on it lest the OSS……err IT Security come knocking)

            • oldog
            • 6 years ago

            Cargo pants?

            • tanker27
            • 6 years ago

            cant wear cargo pants when its Business Attire at work.

            • trackerben
            • 6 years ago

            Carry it around in a fastfood bag. That’s what I usually do with my iPad for quick hops, say from car to coffee or grocery shop.

    • trackerben
    • 6 years ago

    Oh goodness me, gaters must be all bent out of shape over the market bending to Apple’s metal.

    • sschaem
    • 6 years ago

    Only 38% gross margin , AMD is closing in Apple !!!

    Joke aside, Apple revenue is MASSIVE… Its beyond ridiculous how much unit get sold.

    Edit: Thats 663,000 unit a DAY, every single freaking day! that sound just physically impossible… humm

    edit2: Thats 27,000 unit an hour. Apple sell 460 unite a minute , 24 hours day, every single day?

    That sound unbelievable… I wonder if the number are Cook ‘ed’ (pun intended)

      • Ryu Connor
      • 6 years ago

      Apple Q4 was June 29 through September 26 (the filing states clearly that Saturday September 27th is not included).

      [url<]http://investor.apple.com/financials.cfm[/url<] That makes the time frame exactly 90 days. 39,300,000 / 90 = 436,666.67 units a day. 18,194.44 unit per hour. 303.24 units per minute.

        • sschaem
        • 6 years ago

        Correct, thats the number of phone sold.

        (Adding the ipod, iphone, imac and you get 663k units a day)

      • NovusBogus
      • 6 years ago

      It’s a lot, but still only a small fraction of the total mobile market–around 12 percent last I checked. Apparently the world can’t buy enough gadgets.

        • trackerben
        • 6 years ago

        [url<]http://www.cnbc.com/id/102098850[/url<] [i<] "...Find me a better company out there. It's ridiculous. They have the best products and so much cash they could buy a country," Darren Chervitz of Jacob Internet Fund said. Analysts had expected the company to report earnings of $1.31 a share on $39.88 billion in revenue, according to a consensus estimate from Thomson Reuters. Wall Street expects the tech behemoth to ship 61.13 million iPhones and 23.42 million iPads in the first-quarter, according to StreetAccount...[/i<]

          • BabelHuber
          • 6 years ago

          Analysts mostly care about the profits of a company and the short-term outlook.

          I don’t think that Apple is doing [b<]that[/b<] well in the mobile phone space: In the last 2 years, their market share dropped considerably: [quote<]2012 FULL YEAR OPERATING SYSTEM MARKET SHARES Rank . . OS . . . . . . . . 2012 units . . share . . 2011 units . . share . . 2010 units . . share 1 (1) . . Android . . . . . 452 M . . . . . 65% . . . 208 M . . . . . 43% . . . 54 M . . . . . . 18% 2 (2) . . iOS . . . . . . . . 136 M . . . . . 20% . . . . 93 M . . . . . 19% . . . 48 M . . . . . . 16% 3 (4) . . Blackberry . . . . 33 M . . . . . .5% . . . . 52 M . . . . . 11% . . . 48 M . . . . . . 16% 4 (3) . . Symbian . . . . . 19 M . . . . . . 3% . . . 81 M . . . . . 17% . . 116 M . . . . . . 39% 5 (5) . . bada . . . . . . . . .16 M . . . . . . 2% . . . . 9 M . . . . . . 2% . . . 3 M . . . . . . . 1% 6 (6) . . Windows Phone .16 M . . . . . . 2% . . . . 5 M . . . . . . 1% . . . 2 M . . . . . . . 1% Others . . . . . . . . . . . . . 15 M . . . . . . 2% TOTAL . . . . . . . . . . . . 695 M . . . . . . .. . . . 486 M . . . . . . . . . . . 298 M Source: TomiAhonen Almanac 2013 This data may be freely used and repeated[/quote<] Source: [url<]http://communities-dominate.blogs.com/brands/2013/02/final-q4-numbers-and-full-year-2012-stats-for-smartphone-market-shares-top-10-manufacturers-top-os-p.html[/url<] 2013: [quote<]2013 FULL YEAR OPERATING SYSTEM MARKET SHARES Rank . . OS . . . . . . . . . 2013 units . . share . . .2012 units . . share . . 2011 units . . share 1 (1) . . Android . . . . . . 767.3 M . . . 78% . . . 452 M . . . . . 65% . . . 208 M . . . . . 43% 2 (2) . . iOS . . . . . . . . . 153.4 M . . . . 16% . . . 136 M . . . . . 20% . . . . 93 M . . . . . 19% 3 (6) . . Windows Phone . 33.3 M . . . . 3% . . . .16 M . . . . . . 2% . . . . 5 M . . . . . . 1% 4 (3) . . Blackberry . . . . . 23.0 M . . . . 2% . . . 33 M . . . . . .5% . . . . 52 M . . . . . 11% Others . . . . . . . . . . . . . . 10.3 M . . . . 1% TOTAL . . . . . . . . . . . . . 990.0 M . . . . . . . . . . . 695 M . . . . . . .. . . . 486 M Source: TomiAhonen Almanac 2014 This data may be freely used and repeated[/quote<] Source: [url<]http://communities-dominate.blogs.com/brands/2014/02/final-2013-smartphone-market-share-numbers-full-year-and-quarterly-q4-data-by-top-10-brands-plus-os-.html[/url<] And Q2 2014 (before the release of the iPhone 6): [quote<]BIGGEST SMARTPHONE OPERATING SYSTEMS BY UNIT SALES IN Q2 2014 Rank . OS Platform . . . . Units . . . . Market share . Was Q1 2014 . . Manufacturers in Top 10 1 (1) . . Android . . . . . . . 253.1 M . . 85.1 % . . . . . ( 81.0 %) . . . . . Samsung, Huawei, Lenovo, LG, ZTE, Sony, Yulong/Coolpad, Xiaomi, Motorola/Google 2 (2) . . iOS . . . . . . . . . . 35.2 M . . 11.8 % . . . . . ( 15.5 %) . . . . . Apple 3 (3) . . Windows Phone . . 7.4 M . . . 2.5 % . . . . . ( 2.2 %) . . . . . . Samsung 4 (4) . . Blackberry . . . . . . 1.6 M . . . 0.5 % . . . . . ( 1.1 %) . . . . . . (None) others . . . . . . . . . . . . . . . 0.2 M . . . 0.1 % . . . . . ( 0.1 %) TOTAL . . . . . . . . . . . . 297.5 M Source: TomiAhonen Consulting Analysis 15 August 2014, based on manufacturer and industry data This table may be freely shared[/quote<] Source: [url<]http://communities-dominate.blogs.com/brands/2014/08/smartphone-top-10-for-q2-of-2014-same-ole-same-ole.html[/url<] So the absolute growth of Apple sales originate from the exploding smartphone market. But relativ to the competition, Apple fell back, so the market share is shrinking. We'll see if the iPhone 6 can stop this trend, but since smartphones turn into commodities, I wouldn't count on it. I think that history repeats itself here - in the 90ies Windows relegated Macs into a niche, and now Android does the same to iPhones. Of course Apple still has outstanding profits, but once the market share gets too low, Apple is in for troubles. Also note that 50% of iPhones are sold in the USA and Japan, globally the market share does not look so good. See this link from Q2 2014: [url<]http://www.tech-thoughts.net/2014/09/smartphone-market-share-and-usage-by.html#.VEZFffl_sRE[/url<]

            • blastdoor
            • 6 years ago

            The reason that Apple almost died in the 90s was not because their marketshare was less than a majority. The reason Apple almost died in the 90s was that they could not implement their business model. Many people mistook Apple’s poor implementation of its business model as evidence that it was a flawed business model.

            Steve Jobs and Tim Cook have demonstrated how to implement apples vertically integrated approach well. I think that Apple can do very very well with market share between 10 and 20%, so long as it’s skimmed from the top. Stated differently apples niche is in selling products that are profitable. I’ll bet Dell, HP, or even Samsung would trade places with Apple in a heartbeat.

            • BabelHuber
            • 6 years ago

            Steve Jobs disagreed in 1995:

            [quote<]What ruined Apple was not growth … They got very greedy … Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible … they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.[/quote<] [url<]http://www.forbes.com/sites/richkarlgaard/2012/12/10/steve-jobs-warns-apple-dont-be-greedy/[/url<] Also, you seem to forget that Apple's computer sales profited big time from the iPhone. Before 2007, Apple had much less success in their 'PC' business. Have you looked at my tech-thoughts link at all? In a lot of markets iPhones already are relegated to a niche - Japan, USA, Australia and UK are Apple's strong holds. Apple is already below 10% in lots of markets, e.g. Germany, in most South American countries etc. Of course they can still make huge profits in the next few quarters, but as the commodization of smartphones continues, it will get tougher and tougher. Also note that Apple does best in markets where phones are heavily subsidized by expensive contracts, so the phone's price is mostly 'hidden'. When you have to pay the full price of $700-$1,000 for your iPhone, those $300 Android devices suddenly look much more attractive.

            • blastdoor
            • 6 years ago

            Interesting quote, but I disagree entirely with your interpretation.

            Steve Jobs never acted in a way consistent with your interpretation of that quote. He always sold premium products at premium prices. One of his first acts upon returning to lead Apple was to kill the Mac clone business in order to support Apple’s profitability. Every product Apple has sold since his return has been a premium product at a premium price.

            An alternative interpretation of Jobs’ quote is that he was simply arguing that Scully went too far in pursuit of profit over marketshare. It is certainly true that there is a minimum critical mass that a platform needs in order to succeed. You can’t price yourself so high that you fall below that critical mass. My guess is that’s mostly what Jobs meant.

            Another interpretation of Jobs’ quote is that it was from 1995 and he was looking into the possibility of returning to Apple. Jobs may have been selective in his comments — saying things that are technically true, but that would be misinterpreted as being consistent with conventional wisdom. The kind of conventional wisdom that the Apple board of directors in those years may have agreed with. Steve Jobs might have wanted the Apple board of the time to interpret his comments in exactly the same way you are. But based on his actions since returning to CEO, that is obviously the wrong interpretation.

            • BabelHuber
            • 6 years ago

            [quote<]An alternative interpretation of Jobs' quote is that he was simply arguing that Scully went too far in pursuit of profit over marketshare. It is certainly true that there is a minimum critical mass that a platform needs in order to succeed. You can't price yourself so high that you fall below that critical mass. My guess is that's mostly what Jobs meant. [/quote<] [b<]B I N G O ![/b<] You got it - this is also what I meant. You have ignored the link from tech-thoughts.net - a sub-10% market share does not bode well for future app development, especially if it gets worse. Note that I'm not talking about a developer who wants to create the next Angry Birds, I'm talking about companies which pay app developers. E.g. banks, insurances or companies like Denon (where you can control your receiver via iOS/ Android). Now imagine a company where the CFO says 'only 3% of our customers use iOS, but 92% use Android. Hence we only maintain our Android app in the future to save money. The other apps are discontinued'. And this is the situation Apple must be aware of. Note that I don't say that I like this: I do not want Google to become the MS of mobile, and I do not want Qualcomm to become the Intel of mobile. I'd rather have tough competition. But for it seems like this is the direction we are heading to...

            • blastdoor
            • 6 years ago

            Ah… ok, sorry. I didn’t realize that’s what you were concerned about.

            I really don’t think that Apple is at any risk of falling below the critical mass marketshare needed to ensure the continuation of the platform. The Mac is a great example. The Mac flirted with falling below the critical mass around the turn of the century, but now is doing just fine at less than 20 million units per year and a global marketshare of about 5%.

            The reason the Mac flourishes even at these low marketshare levels is that Mac users are not a random draw from the population. These are highly desirable customers, not just for Apple, but also for developers.

            The iPhone is a similar story, but it’s on much firmer footing. Apple sells in the ballpark of 200 million iDevices per year. That’s a huge number — about as big as the United States was when I was born. And the installed base is even larger. It just doesn’t matter what the denominator is associated with 200 million when you go to calculate marketshare. That’s 200 million of the worlds wealthiest people. And the vast majority of them are using the same version of an OS with a very limited range of hardware configurations (compared to Android). It’s a very desirable platform for developers and is at no risk of becoming undesirable anytime soon.

            One other point — I suspect that a very large number of devices that have Android installed are not devices for which people actually buy/use apps. Ultimately, the marketshare that matters for developers is share among people who purchase/use their software.

            Bottom line from my perspective is that Apple is far, far, far away from being in danger of falling below the critical mass necessary to support its iOS and OS X platforms. The greater danger is the one facing the other OEMs — an inability to make any profit at all, starving their R&D budgets, and leaving them as hollow shells. I think Samsung needs to be much more worried about that scenario than Apple needs to worry about falling below critical mass to support the platform.

            • trackerben
            • 6 years ago

            Oh yeah, the wsj’s “Apple’s Addiction” prophecy:
            [url<]http://www.forbes.com/sites/markrogowsky/2013/09/11/marginal-cost-and-benefit-apples-addiction-to-iphone-profits/[/url<] ...the reality is that Microsoft/Nokia, Google/Motorola, China’s Xiaomi, and countless others are all dragging down the price of those phones — and improving their quality — every year. [i<]Getting $600 for a smartphone that’s a slightly improved version of last year’s model might work in 2014. It might work in 2015. But it will stop working.[/i<] When it does, Apple will find itself with smaller market share than Android. It guarantees that outcome by passing on even the middle of the market, never mind the low end. Until then, it will either continue to buy back more stock — a tactic that has yet to provide any discernible strategic value for Microsoft, Cisco, IBM or anyone who has spent billions doing so — or will wind up with perhaps $200 billion in the bank. Either way, it will have <sic> failed to buy itself a future. It’s hard to be the one to kill your own golden goose and it’s much harder to know when the right time to do that is, but increasingly it feels like the time has already come for Apple. People keep believing there will be a “next big thing” at some point, but the fact is there is no next iPhone, at least in terms of the amount of value it has created in such a short time. [i<]And even if iPhone endures, the hardware itself won’t produce the kind of profits in the second decade as it did in the first...[/i<] This type of analysis which has been coming regularly for the past few years.

      • blastdoor
      • 6 years ago

      That scale of production truly is amazing. Back in the 80s and 90s, the computer market primarily consisted of United States, Japan, and Western Europe. But even then, it was heavily skewed towards the United States. Today, the market for the most popular personal computer – – the smart phone – – is truly global. It is a major accomplishment of production and distribution.

      • jihadjoe
      • 6 years ago

      AMD’s margins are actually pretty good, the lack of profit comes from spending way too much money on stuff that isn’t really giving them good, if any returns.

      Too many people, trying to do too many things at once, and not enough focus on making one or two really good products instead.

    • jjj
    • 6 years ago

    Repeating the BS marketing lines isn’t helping anyone.
    They reported first weekend shipments of 10 mil new iphones and that’s pretty much it for Q3 since they had shipping delays. Yes it is technically accurate because last year the first weekend was 9 mil.
    And if you exclude new models the sales were rather flat on year. One could argues that the numbers should be adjusted for inventory in the channel but last year most of the increase in inventory was on iphone 5c. Sure in q4 they’ll do much better than last year because their new models don’t have toy screens. But Q3 was rather poor, even if slightly better than expectations.
    As for ipads the new ones are not compelling enough for people to upgrade. The one model that should sell is the Mini 2 (high res and decent SoC ) at 300$ but that’s not because Apple has all of the sudden changed and doesn’t have high prices but because their competition is just terrible . The only other non China high res 8 incher i can think of at 300 or less is the Galaxy Tab Pro8.4 at 280$.
    In other news the Sony Z3 Tab Compact 8 inch 1920×1200 just showed up at 500$ lol .

      • Jason181
      • 6 years ago

      Are you sure they’re including inventory in the channel as part of sales/COGS?

      Perhaps those items are in deferred revenue; they have just over $1 billion more than the same quarter last year ($8.5 vs. $7.5).

        • derFunkenstein
        • 6 years ago

        there is no inventory in the channel that isn’t already sold to an end user. They’ve sold everything they’ve made to this point, according to Cook’s remarks in the Q&A (available on Ars).

          • Jason181
          • 6 years ago

          That could just mean that they have a contract for the sale, but since they haven’t delivered, it’s recorded as deferred revenue. That would be the proper accounting for that situation.

            • derFunkenstein
            • 6 years ago

            I agree on that part, I just mean there’s nothing in the channel unsold.

      • trackerben
      • 6 years ago

      You’re looking at iPhone proformas, but what matters for now is how analysts discount to present value Apple’s after-tax projections. Or whether they still do. iPads are another story though, it’s likely the negative growth there is due to cannibalization by unprecedented iPhone uptake as well as greater competition. It could also be it’s ripe for re-categorization, perhaps a shift to integrated hybrid designs or packaging.

    • adisor19
    • 6 years ago

    And seeing the specs of the “new” iPads, it looks like Apple is shooting themselves in the foot. Dropping the price is not the answer. Upping the specs as pple expect, is the answer.

    I predict that iPad sales will continue to dwindle for the next quarter as well. The only iPad that is worth buying right now is the Air 2. Anything else is just a recycled parts and pure profit for Apple. Meh.

    As for the iPhone, it goes to show that the whole bend gate bs had no impact at all. I’m glad to see that pple are more intelligent than I initially assumed.

    Also, I expect Mac sales to go down next quarter. The new neutered Mac mini is an embarrassment : soldered RAM, and no quad core option ! The new iMac is just too expensive and the screen itself cannot be used at full res due to lacking DP 1.3 and HDMI 2.0 spec ports.

    Overall, Tim is being more efficient in guiding Apple but at the same time, he’s slowing down demand without even knowing it.. Hope he’ll realize it sooner rather than later.

    Adi

      • entropy13
      • 6 years ago

      [quote<]Dropping the price is not the answer. Upping the specs as pple ([i<]sic[/i<]) expect, is the answer.[/quote<] Why not...[b<][url=http://stream1.gifsoup.com/webroot/animatedgifs/687871_o.gif<]both?[/url<][/b<]

      • chuckula
      • 6 years ago

      You can only double the registers so many times you know.

      • Deanjo
      • 6 years ago

      [quote<]The new neutered Mac mini is an embarrassment : soldered RAM, and no quad core option ! [/quote<] While it is disappointing to some that there is no quad core offering, the "high end" mac minis were not the big sellers. It was still the entry level $599 Mac Mini that drove it's sales. The higher end Mac Mini's started getting into entry level iMac prices once you started adding in the price of keyboard, mouse, and a IPS display it started looking less appealing to most people when they simply just pick up an iMac in the same price territory. What Apple has done is further differentiate the expected roles of each line. The Mac Mini now truly the "cheaper entry level", the iMac is the everyday Mac, the iMac Retina is a prosumer offering and the Mac Pro is the choice of professionals. Apple may find however that the iMac retina starts dipping into the entry level Mac Pro sales. There are probably a lot of mac users that were on the verge of going for the entry Mac Pro for 4k video editing and now they will give a serious look to the new iMac retina.

        • derFunkenstein
        • 6 years ago

        Except that the equivalent of the “old” entry level is now $100 more. It’s $700 to get a 2.6GHz i5 dually, still with soldered RAM and a mechanical hard drive. There was zero added except price.

        The $499 model is definitely aimed at the NUC market.

      • windwalker
      • 6 years ago

      iPad sales will remain unimpressive because there is no big clear incentive to upgrade.
      There is also no mass market app with huge appeal that is iPad only, so many people are happy with just an iPhone.

      iPad mini 2 is a great deal and even the 32 GB version is worth the upgrade price.
      And so is the Retina iMac, if you can afford it, of course.

      • blastdoor
      • 6 years ago

      My biggest gripe about the ipad is that with this many iterations for sale, consumers might get confused. But I think the challenge facing apple is that the iPad delivered what most people needed from it back with the iPad 2. I think that’s why the iPad mini (which has iPad 2 guts) is still around.

        • windwalker
        • 6 years ago

        I disagree.
        At any given price point, it’s pretty clear which iPad one should buy.
        I think it’s actually a strength that there’s a different model at every $50 increment from $250.
        The iPod line was designed exactly like that in its glory days.

          • blastdoor
          • 6 years ago

          Good point about there being a different model at every $50 increment. That is handy.

          But the labeling sure seems bewildering to me.

          My preference would be to label iPhones and iPads the way Macs are labeled. There isn’t “iMac Air 3” and “iMac Air 2” and “iMac Air” all being sold at the same time. There’s iMac, MacBook Air, MacBook Pro, Mac Pro, and Mac Mini. Lurking in the background, there are BTO configs and model years. But the marketing messaging is much more clear. Apple also even sells older Mac models — but on the refurbished page.

          I’d rather see a simplified presentation of iPad Mini, iPad Air, and iPad Pro; iPhone mini (4 ” screen), iPhone (4.7″ display), and iPhone Plus (5.5″ display). You could then have BTO configs specifying combinations of processor, storage, display quality (retina, non-retina), etc.

          In terms of the number of options/price points, this would be the same as present. It would just have a less messy presentation.

      • tipoo
      • 6 years ago

      They soldered the ram on the Mini? Damn… The big feature after the redesign was how easy it was to access the bottom.

      • blastdoor
      • 6 years ago

      Mac sales might be down sequentially because the back to school quarter is always a strong one for Apple, but I bet they’re up year over year.

      I’m confused by your iMac comment. Are you referring to the fact that the iMac’s screen can’t be used in target display mode? I doubt that’s a very common usage scenario. I think the advantage of being the only computer with a single tile 5k display trumps lack of target display mode support.

      Regarding the Mac Mini — the soldered RAM and lack of quad core option makes it a less appealing computer to me, but I was never going to buy one anyway. I think the $499 entry price will do more good for sales than the RAM+CPU issue does harm.

      One thing that we see again and again — Apple sure does value GPU+display over CPU. All of Apple’s products skew towards more GPU power than CPU power (relative to the median competition). I generally think AMD’s whole APU approach was a mistake, but they could have proven me wrong if they could have implemented the strategy well enough to win Apple’s business. I bet Apple was sorely tempted, but balked at AMD’s unreliability as a supplier.

        • Terra_Nocuus
        • 6 years ago

        But remember, it’s a [i<]pixel doubled[/i<] 5k, which means it's a 1440p display. It might say "5K" on the box, but you're not getting more desktop real estate than a 4K monitor.

          • blastdoor
          • 6 years ago

          It’s 1440 in terms of UI points, but it’s 2880 otherwise. The advantage is sharpness, just like on iDevices. Apps that haven’t been upgraded yet will be pixel doubled, and so won’t enjoy the sharpness improvement. But that’s a compatibility feature. For upgraded apps (and perhaps for apps that use standard UI frameworks — I’m not sure about that) , it’s definitely a 5k display in terms of sharpness.

          From my point of view, that’s perfect. I would not want a super tiny UI.

          • windwalker
          • 6 years ago

          Don’t be silly, the display is 5K.
          By default, OS X renders text and window chrome at double size to improve sharpness, but images and video are still rendered at 1:1.
          And of course, you can change that if you want to get more real estate than 1440p.

          In both cases, it is better than a 4K monitor and actually much much better than the common 28″ 4K monitors that are too big for pixel doubling and too small for 1:1.

      • derFunkenstein
      • 6 years ago

      The new iPad Minis are pretty lame. The lack of A8X in the iPad Mini 3 makes the only differentiator touch ID, which I can’t imagine being worth $100.

      The updated iPad Air 2 isn’t so bad, though – much better graphics, somewhat better CPU, touch ID, and less weight with similar battery life.

      soldered RAM in the Mac Mini doesn’t bother me. Jacking the price of the equivalent of the old entry level model is pretty bad, though. $700 for mainstream mobile i5 with soldered RAM and mechanical storage? Even the old 21.5″ iMac looks like a steal compared to that.

Pin It on Pinterest

Share This