Apple Forecasted to Report First Quarterly Revenue Decline Since 2003

[American Hero]

One thing they could do is try and build back "it just works" quality into their products and stop trying to expand to markets like making their own entertainment. For example, before the release of 10.6 Apple said the focus would NOT be on new functionality. Instead, the focus would be making the EXISTING SW work better and faster. And that is exactly what they did. And to this day 10.6.8 stands as the bar for the best version of OS10 ever released (most efficient and bug free). Reputation is not just about innovation, but also quality. Hint...get rid of anyone hired away from MS.

Trying to figure out if they'll ever release OS 11. How many years has Apple been on OS X?

 

[igorsky]

So, everywhere you go, you see what, a couple people wearing Apple Watches? Or maybe you're riding a different NYC subway system than I am, or spending more time in Tribeca or whatever.

There really is a lot of good stuff here (love the Tribeca reference). So I'll just say that we're both offering anecdotal evidence, so we're both equally likely to be correct.

 

[monstruo]

Steve Job's Apple was exciting. He convinced me to convert to Apple products; Mac, ipad, and iphone. His press conferences were a real treat and I truly believed in his vision. Tim Cook's Apple is boring. I'm torn between making a cup of tea/ watching Apple press events. l'm not nearly as excited about new Apple products anymore

Exactly, I managed to doze off with TC's keynotes. Hate to say it but it's incredibly dull.

 

[MarkusL]

These revenues are not lower. They're just thinner.

 

[emailnotebox]

I've never liked the capital system in the stock market. A company makes billions and billions, but one quarter they make slightly fewer billions and investers lose their minds.

No company can grow perpetually.

It will happen, but it doesnt mean it should happen. Its actually not preferable that it should happen. The whole purpose of making investments and hiring the best is to see continued growth, not to see decline in revenue. No CEO desires decline. They would feel responsible.

 

[unobtainium]

What's true here is you have no idea what Steve Jobs would or wouldn't do. Opinions and speculation.

Duh.

Anyway, my opinion is not unfounded. Steve Jobs didn't like complex UIs. I'm pretty sure he would have hated the mess they made of the Digital Crown on Apple Watch.

* in my opinion (since you apparently require this unnecessary caveat)

 

[igorsky]

Then they need to work hard to grow Watch Sales by millions of units. This is Apple we are talking about. Usually everything they come out with people go crazy over. The Watch has been a bit softer, but if they built more hype for the product they possibly could have sold several more million. They have to make people think they can't live without it and they just haven't done that yet.

Let's have some perspective, yeah? The Watch is a first generation product and they've sold anywhere from 10 to 15mm units, if you look at all the various analyses floating around.

The original iPhone sold 1mm units.

 

[I7guy]

The products were there. Cook's claim to fame is making it bigger or smaller. Cook's pettiness is annoying and will cost sales. The first generation iPad mini had an outdated chip out of the box. Cook's way of trying to force a purchase of the larger device. Put the current chip in and charge for it.

Apple customers were never shopping price. Apple products were always made better and better and priced accordingly. We are not junk shoppers. We know when a product is watered down.

Cook is not CEO material for Apple. He may be for another company but not Apple. We expect more.

I don't know who "we" are, but I like the man, the products and think he is doing a great job. The valuation of Apple reflects that.

Every consumer company needs innovation, otherwise they'll become stale.. That revenue stream isn't going to last without innovation. Consumers won't keep buying the same product year after year. Competitors will get ahead and take customers.

I don't know what the straw man consumers will do. I know what I will do, my family will do, my coworkers. But people are buying products as you don't make 231 billion a year from failure.

You are so short sighted. Cook has been at the helm improving / updating products conceived and launched under Steve's time at the helm. The revenue stream is not from things Cook "birthed". Cook has been CEO for over 5 years now and he has not demonstrated a game changing, innovative product that will get the stock price moving. AAPL is trading where it was 4 years ago - the dividend is pathetic @ 2%/year.

Timmy boy was not placed in the CEO role to drive the green agenda or the gay agenda or Time magazine covers - he is there to drive stock appreciation for the shareholders.

I like the man, the job he is doing and the products. The record breaking quarters with the 6s...were due to SJ I suppose. Maybe I'm short sighted but my stock is doing well in the long haul.
[doublepost=1461690729][/doublepost]

Duh.

Anyway, my opinion is not unfounded. Steve Jobs didn't like complex UIs. I'm pretty sure he would have hated the mess they made of the Digital Crown on Apple Watch.

* in my opinion (since you apparently require this unnecessary caveat)

You mean as opposed to speaking directly for Steve jobs?

 

[Bonte]

If that was true, Apple would allow its stock to fall further and won't be investing in buy back!

Well, it can't go to low and the buyback is saving Apple on dividend payouts. Another sign that 'underwrites' my theory is the dividend of 2%, i see it as a mechanism to gradually raise the price instead of the jumps up and down it used to make.

If Apple really wanted a higher stock price then the dividend would be higher instead of dumping billions in the buyback, AAPL is a dividend stock now and that has another investment sentiment.

Just my 2c, it's only a theory.

 

[jhudgins]

I feel that Tim Cook's time as caretaker CEO is done.

He's guided Apple to outstanding profits, but has not shown that he can take Apple to new heights in the long-term. The Apple Watch is not a worthy successor to the Mac, the iPhone and the iPad, in my opinion.

In the five years that he has been CEO, he has never shown the passion for Apple products that Steve Jobs did. As a result, the public has become less enthusiastic also.

Finally, the area that Apple most needs attention is services. Eddy Cue is not the right man to lead this area, to put it mildly. Apple needs a major culture change to instil the right ethos for making high quality services. It goes against their traditional culture in a fundamental way, and requires strong leadership to overcome resistance in Apple. Tim Cook is not able to give this leadership, nor does he have the headhunting chops to find the right person; he is too nice, and doesn't have the sharpness in this field.

It's time for new blood.

I feel like Jony Ive should shoulder some of the blame, too. There have been some questionable (to put it politely) design decisions as of late. Idk, maybe it's because Jobs isn't around to crack the whip. He was heavily involved in design. Tim Cook strikes me as someone who could be intimidated by Ive and who just leaves him to his own devices. ("Devices"! ha! Aren't I clever?

But if not Cook, who else could do the job? Could you imagine Eddie Cue, Phil Schiller, or even Jony Ive bumbling around as CEO? Yikes. And they shouldn't bring in an outsider, imho. Unless it's Elon Musk. But why would Musk help make toys for Apple when he's busy saving the world?

Idk, maybe bing back Woz? Maybe not as CEO but as some kind of adviser? They need to do something....

 

[2IS]

You posting that opinion in this particular topic implies that you think that's the reason for this decline. Tim Cook has been quoted as saying something along the lines of "We've experienced decline before and we innovated through it." That's all I really need to hear the leader of Apple say.

Well now he actually has to do what he says.

 

[igorsky]

Idk, maybe bing back Woz? Maybe not as CEO but as some kind of adviser? They need to do something....

Have you heard any of Woz's crackpot commentary lately? No thanks.

 

[DakotaGuy]

Let's have some perspective, yeah? The Watch is a first generation product and they've sold anywhere from 10 to 15mm units, if you look at all the various analyses floating around.

The original iPhone sold 1mm units.

Original market analysts projections ranged from 30-40 million units. If they had been able to meet these projections then they would see a growth in revenue. Now you are correct in saying it is a 1st generation product so I think the projections for the first year were way too high, but they should be able to double sales for the 2nd year so 30 million shouldn't be too far off. The Apple Watch needs to be taking up the slack as the phone market becomes more saturated.

 

[DevNull0]

Again--nothing to do with what's going on here.

so what are you saying? By the time Apple's name diminishes to the point where it does hurt sales, momentum will take Apple down hard. if they want to keep their reputation for innovative quality products, they need to make innovating quality products.

 

[sober2ndthought]

The odd thing in the recent keynote Cook proclaimed the Watch as the best selling smart watch in the world.

I knew he was full of it and talking out of his a$$.

LOL its probably true, when you think: who buys smart watches? Apple has enough of a fan base which will buy anything Apple releases. No matter how useless it is.

 

[MacHiavelli]

The problem is with half-baked and underwhelming products.

Easy for Apple to go from #1 to zero. Just ask Nokia. BlackBerry. Etc.

Get the products right.
Get the products right.
Get the products right.

 

[gugy]

Good. Hopefully revenue decline might encourage them to update some of their products. Once they stop caring about squeezing as many profits from 16GB storage phones and aged tech in their computers, they might consider giving people a bit of value for money.

If they know they'll have revenue decline regardless of what they do, they might stop penny pinching.

Could not have said any better.
Apple disdain for the Mac is annoying to say it nicely.
Mac Pro, Mac Mini and MBP have been relegate to second class citizens. As a professional this is crazy. I hold dear my MacPro 2011 and I am about to update but I want to see real updates and not just small ones with less and less capabilities.
Enough of making it thin.
Ive, loses some weight if you are so obsessed about thinness.

 

[ApfelKuchen]

My apologies if this has already been said (too may posts to wade through)... But why is this news, when Apple "forecasted" this three months ago at the previous earnings call, every analyst has spent the past three months trying to predict the exact dimensions of that forecast, and share prices have anticipated a decline for nearly a year?

Sure, if someone hasn't been paying attention, the headline might suggest that Apple's share price will change dramatically in response to this brand-new revelation, and people love drama.

Fact is, the real drama will come from Apple's forecast for the next quarter, not their acknowledgement that the past quarter's results fell within the range they projected.

 

[igorsky]

Original market analysts projections ranged from 30-40 million units. If they had been able to meet these projections then they would see a growth in revenue. Now you are correct in saying it is a 1st generation product so I think the projections for the first year were way too high, but they should be able to double sales for the 2nd year so 30 million shouldn't be too far off. The Apple Watch needs to be taking up the slack as the phone market becomes more saturated.

Sorry, don't really know where you're getting your info from. We have CNBC on here 24/7 and I remember many analysts opining on their AW predictions. The range was anywhere from 10 million to 40 million...in other words there was no clear consensus on how many units they'd move.

I do agree that they need to figure out a way to grow sales and turn it into a product that everyone must have.

 

[TallManNY]

Bought low sold high. Now shorting the stock.

You are shorting a tech company trading at P/E of 11 with nearly 35% of the stock price backed up by cash? That is brave.

I'm holding it long term.

 

[bobbie424242]

Gruber is not pleased !

 

[Andrei90]

Apple is a victim of its own success. The iPhone 6/6 Plus in 2014 filled a lot of pent up demand. It's not just a tough compare, it's an impossible compare. Wall Street and bloggers alike are interpretting this as the end for the iPhone. That couldn't be further from the truth.

If analysts are to be believed, they said the reason of Apple's decline is giving in to the people. They said people are more comfortable with iPhone 6 because of the huge screen that they don't see the need to upgrade year over year anymore. So in other words, Apple's failing because it started listening to the customers.

 

[The Barron]

I feel that Tim Cook's time as caretaker CEO is done.

He's guided Apple to outstanding profits, but has not shown that he can take Apple to new heights in the long-term. The Apple Watch is not a worthy successor to the Mac, the iPhone and the iPad, in my opinion.

In the five years that he has been CEO, he has never shown the passion for Apple products that Steve Jobs did. As a result, the public has become less enthusiastic also.

Finally, the area that Apple most needs attention is services. Eddy Cue is not the right man to lead this area, to put it mildly. Apple needs a major culture change to instil the right ethos for making high quality services. It goes against their traditional culture in a fundamental way, and requires strong leadership to overcome resistance in Apple. Tim Cook is not able to give this leadership, nor does he have the headhunting chops to find the right person; he is too nice, and doesn't have the sharpness in this field.

It's time for new blood.

So, does Apple need The Donald?

 

[msheredy]

Apple just needs to keep innovating, they can't keep riding on their diminishing name and brand. People are starting to realize Apple no longer stands for the cutting edge.

My God they have been this whole freakin' time!!! If you judge Apple on phones alone you (generally speaking) are not looking at the whole picture. Thing is EVERYONE and their mom are finally getting over this smart phone craze. Samsung had already posted declines and now it's possibly Apple's turn. The only surprise I have is that it lasted this long. People are getting tired of buying new phones every year and with the demise of the subsidized pricing folks are going to think twice at how badly they want a new phone.

Where Apple continues to innovate is how their ecosystem ties into each and every one of their products. If the only Apple product you own is an iPhone well then you aren't getting all of the innovation that Apple has continued to build. Being able to answer a phone call on your computer with your cell in another room or reply to a text message—has android done that right out of the box? Let's not forget the other features like handoff and apple pay, health kit etc. All their products talk to one another and do so quite well. I can change music, adjust the volume, like a track, add it to my library etc from my apple watch even with the music streaming from my iPhone in another room while I'm in my backyard.

Problem is the general public isn't ready for that kind of connectivity but it'll get there and when it does Apple will once again be considered "innovative".

 

[theluggage]

• Mac Pro Towers, not the shizzy trashcan crap. We want our professional stuff to be user-upgradable like before!

Yup, they'd sell dozens of those.
Didn't you get them memo? Nobody is making money out of towers - the only areas not tanking are laptops, convertibles and small-form-factor. If someone wants a workstation or server they can spec up a Windows or Linux system with exactly the components they want from the motherboard up - and if they buy an extended warranty or support contract then the vendor makes a profit. If you are a creative pro who spends all day full-screened into Adobe CS or Avid then you probably won't notice if it is running on Windows.

I know its frustrating and stupid that thinner & lighter sells better, but the market has spoken. OTOH I've just had to lug my trusty 17" MBP around in a rucksack for a bit, and boy did those skinny rMBPs and rMBs start looking attractive...

• No soldered RAM on Macs. Do I even need to explain why?

Er, yes, because the amount of RAM you need for a given job hasn't changed much in the last 5 years. If you need more than 16GB then you're probably in the market for a Mac Pro or a top-of-the range iMac anyway, and those do have upgradeable RAM. Maybe the 15" rMBP "needs" upgradeable RAM but that's about it. Apart from the bulk issue, RAM sockets are a point of failure.

• Thunderbolt 3 on ALL Macs! What's with the new 2016 MacBook only having USB-C? There's no excuse for it to not have Thunderbolt 3.

Does the Thunderbolt controller even work with the Core M chipset? Does the sort of work you can do on a Core M machine need a 40Gbps external RAID array? Anyway, with USB and Thunderbolt now sharing a connector I suspect that many Thunderbolt 3 peripherals, once they start appearing, will transparently fall back to USB-C.

• Speaking of the new MacBook--Make a version that's actually good! One port is unacceptable.

I'll give you that one!

• USB-C on all iOS devices. Get rid of that Lighting crap. We're done living in 2011.

Yes, I've just upgraded my iPad and am in the process of swapping all my 30-pin cables and dongles with Lightning versions. Please, make my day, change the connector again. Not.

• Skylake Macs. Whats the deal?! Seriously, Intel is about to release even NEWER CPUs!

The deal is that Intel have been dribbling the Skylake chips out really slowly and the mobile chips with more powerful integrated graphics that Apple needs for the rMBP have only recently come out (and who knows if they're available in quantity). There may even be an argument for waiting for the next generation (e.g. DisplayPort 1.3 & hence non-MST 5k displays).

• No 16GB iPhones. Apple, you know this. Make the 32GB version be the price of the 16GB.

...but if you just want a phone, email, web, a few productivity apps and stream your music & video then 16GB is more than enough, whereas if you install lots of games, carry around a large offline media collection or shoot lots of video, a mere 32GB isn't going to cut it. OK, yes, Apple could make 32GB the standard. They could also slip a $20 bill in every iPhone box and Tim could donate his bonus to the local dogs' home.

That said, slapping on a "Pro" label and hiking the price of the iPad is an... interesting response to a shrinking market and, for pity's sake Ive, even if you couldn't make the Pencil snap to the side of the iPad and charge from the smart connector you could at least have incorporated the m-to-f lightning adaptor into the cap rather than giving me two bits to lose...