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Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates
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1) Apple is crushing competitors, period
2) Apple beat top and bottom lines, easily.
3) Apple posted 6% revenue growth on an $87B base, insane for that scale and almost always beats their own guidance.
My point is, the stock being punished is completely ignoring the reality of how insanely good this quarter was and how great Q1 will be. The numbers are staggering and as usual, Apple shareholders who buy more and hold will be rewarded longer term.
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Did you actually look at the quarter and try to understand Apples results or just read this incorrect, misleading headline? There is no decline in sales. Apple grew sales 20% y/y and guided for 6.5% sales growth.
This headline is awful because in reality, there is nothing “weak” about Apples outlook and for sure not the reported quarter.
A $1T company just reported FORTY percent earnings growth. FORTY
Some people can't afford a $1,000 phone and come to the conclusion this somehow means Apple is in trouble. You know, because, they are like, good with money.
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I’m puzzled as to how anyone can be totally negative on Apple when the strategy is so clearly working.
Yes, iPhone sales are flat to up, 1% (note they are STILL selling MORE iPhones) and ASP IS up huge, yet somehow this is a negative?
Apple is capitalizing on their pricing power by offering a premium product and software package while not suffering an unit sales loss.
When you sell 218M iPhones, you’re not going to grow that by 20% anymore.
I’m glad they stopped reporting unit sales. I’ve said it was stupid for 3 years. Now investors can look at the REVENUE and PROFIT, since those are what actually matter.
You had wall street looking at 20% sales growth but some analysts would say, “yeah but they sold 47M iPhones instead of the 48M WE (Not Apple) forecasted.”
Like, who cares? 20% revenue growth is insane.
I’ve upgraded every 2 years on launch days since my first iPhone 9 years ago. Apple’s prices have increased too much though. I’m going to a three year cycle. The new iterations of products used to generally launch at old prices except for a price increase every few years or so. Now it seems you’re lucky to go two years without a price increase on each product.
[doublepost=1541133613][/doublepost]Would it not be a smart move for Apple to take currency fluctuations into account in determining their foreign pricing? I spent a year waiting for a replacement for my iPhone only to find that I couldn't afford to make the change. I wonder how many millions of iPhone owners had the same experience. There comes a time when a new phone, no matter how many bells and whistles it has, is neither desirable enough nor useful enough to overcome the escalating price. I suspect that I'll keep my present phone until it falls to bits.
Though iPhone revenue was up in 4Q 2018, fourth quarter iPhone XS and XS Max sales were not as strong as expected, and iPhone sales growth was essentially flat. Apple sold 46.9 million iPhones during the quarter, compared to 46.7 million in the year-ago quarter, missing analyst estimates.
Apple's $89 to $93 billion revenue forecast for the first fiscal quarter of 2019 is rather also cautious, which Apple blamed on foreign exchange costs, issues with supply/demand balance, and weakness in emerging markets.
"Virtually every foreign currency has depreciated against the dollar over the last 12 months," said Apple CFO Luca Maestri. "That adds 200 basis points of headwinds to the tune of $2 billion to our revenue."
Uncertainty in emerging markets is also a factor. "There's some level of uncertainty at the macroeconomic model in some emerging countries where consumer confidence is not as high," said Maestri.
Maestri also said that Apple has launched an "unprecedented number" of new products over the course of the last six weeks, and Apple has "some uncertainty" around supply/demand balance for some of these products. The launch timing of the new iPhones is also a factor, with the iPhone XR coming later than the XS and the XS Max. This had an effect on Apple's Q4 revenue and will also impact Q1.
Despite the cautious guidance for the first fiscal quarter of 2018, Apple is "very excited" about its lineup of products and services entering the holiday shopping season, and Maestri said that Apple has the "strongest lineup" it's ever had.
Going forward, Apple does not plan to break down unit sales of the iPhone, iPad, and Mac, a major change to the way that earnings data is presented. Apple will, however, continue to provide details on overall iPhone, iPad, and Mac revenue.
Apple CEO Tim Cook and Apple CFO Luca Maestri explained during today's earnings call that Apple does not believe that providing unit sales is relevant for the company at this point.
Article Link: Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates
I'm all for this. The investors don't need to know about unit sales. It's all about the Average Selling Price per unit because that is the only indicator of success. I would rather sell 1 phone that sells for $1B than to sell 1B phones for $1 each.
This is a winning strategy long term because revenue and profit is the most important factor instead of users to the growth of a company. Even if there is user drop off and services were to become stagnant, the positive changes in revenue and profit should clearly tell us that Apple will be vastly superior in all competing products and services in their sectors despite product price increases.
This means nothing for self-empathetic consumers! Cold hearted Apple will continue to extract more by increasing the prices further than damaging their reputation which has been built steadily over long period of time by lowering prices. There will be slow drop or flat growth in number of new devices being sold...we have seen RIM and Nokia in early 2000 and never thought they would be in a situation that they are in! Once the downward rollercoaster is set, gravity will take care of the rest...yea, it won't happen tomorrow or next year for sure!!
How about a few blames on Apple itself?
1. you make your phones unaffordable
2. you make your computers unavailable.
$1k phone pricing has outpaced overall wage increase, which is near to zero. Post-Steve Apple is becoming like those luxurious European brands. No wonder your sales are decreasing.
But when people want to buy iMacs, Apple does not keep them up to date. What a shame.
1. you make your phones unaffordable
2. you make your computers unavailable.
$1k phone pricing has outpaced overall wage increase, which is near to zero. Post-Steve Apple is becoming like those luxurious European brands. No wonder your sales are decreasing.
But when people want to buy iMacs, Apple does not keep them up to date. What a shame.
Trend is forcing people into buying stuff you don’t really want with a neverending increase of corporate profit margins, pushing you towards more and more subscriptions. Ultimately we may end up with a computer shell that only works as long as you pay.
iPhones in particular will in a few years match desktop prices you know.
But who cares?
People keep cheering at events.
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Customers everywhere are waiting for new companies to make products that customers love and can affordable. When IBM became so arrogant when it dominated the mainframe market, new companies, like Microsoft and Apple, emearged and kicked IBM out of personal computer market. Apple will certainly go down the path of IBM and many other similar dinousaurs.
I agree completely. In 2014 I bought the top of the line 15" MBP for around $3200 when I was holidaying in the US. The equivalent machine now is $4699. OK it's 32gb of memory instead of my current 16GB but the machine has the silly touch bar and less ports.
I have however bought an iPhone XS, upgrading from a 6S and I'm far more impressed and happy with it than I could have ever imagined.
"Virtually every foreign currency has depreciated against the dollar over the last 12 months," said Apple CFO Luca Maestri. "That adds 200 basis points of headwinds to the tune of $2 billion to our revenue."
List one single country whose depreciation eclipsed Apple insane price increases, Maestro Meastri
List one single country whose depreciation eclipsed Apple insane price increases, Maestro Meastri
That is what worries me most. If people like you and me, and I used to change phones every single year, iPads every other, are changing their buying habits, then they are in trouble.
Before it was just that you had the price of a new phone for new features, now it is the price of a new phone + x$ for new features which leads people to closely examine whether these new features are really worth the money, it seems more and more people decide that this is not the case and extend their upgrade cycles.
Huge mistake! Clearly the people running the show now, didnt get the point why its called the (i)Phone the (i)Mac and so on and how the Apple success happend in the first place to become a reality,..with this decision NOT to show those unit sales numbers Apple will become just another one of those Tech firms! Nothing worth Billions anymore.
Not exactly eclipsing, more matching, Apple has increased the price of the iPhone by 62% in 6 years, currency changes in Australia has added a further 63%
Today I can get $0.72 for $1 AUD
In 2013 it was parity with the dollar.
Top of the line iPhone in 2012 - iPhone 5 $799 AUD = $799 USD
Top of the line iPhone in 2018 - iPhone XS $1799 AUD = $1295 USD
So iPhone has doubled in price - increase of $1000 AUD or 125%
If dollar was still on parity it would have increased $496 AUD or 62%
So double whammy, Apple has increased iPhone prices by 62% but currency increases has increased this by a further 63% (not taking in to account the effect of inflation which has been roughly 2%
Shame on you Apple for your greed.
Shame on you Apple fanbois for gloating about this price gouging
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Why is Apple not breaking down the figures? When the figures were impressive, Apple shouted them from the roof tops, now they want to hide them, hmmm.