Apple Reports 1Q 2020 Results: $22.2B Profit on $91.8B Revenue, Best Quarter Ever

[MRrainer]

Maybe if they lowered Mac prices and kept them up to date they would be able to sell a few more units. It really makes me wonder how long they will continue to keep the Mac around.

The laptops are kept up to date.

The problem is that Apple is "married" to Intel because of Thunderbolt. Else they could absolutely kill it with Ryzen Desktops.

My guess is that Apple is getting these CPUs for next to nothing currently (the price of the entry-level 15" MBP not increasing after the refresh while doubling the SSD-size is a good indicator of that: something had to give...)

 

[lkrupp]

But I thought that, according to so many members of this site in their infinite wisdom, that Apple sucked now and Tim was running the company into the ground? Could it be that maybe they're just a bunch of sour pusses whose opinions continue to be unsubstantiated? 🤔

No. They are disgruntled desktop luddites still clamoring for a headless Mac with slots as the world passes them by.

 

[vegetassj4]

Great for my stock. Now please pay some more attention to QC, lest you risk losing the growth.

 

[Michael Scrip]

Same people that claim Apple is doomed whenever iPhone sales are slightly down? What do they want?

Exactly.

You also gotta remember that a quarter is only 90 days.

But people buy iPhones 365 days a year.

So if one quarter iPhone sales are up... and the next quarter iPhone sales are down... that's two different sets of people who bought iPhones during those times. So it's really difficult to make any kind of judgement.

A person could buy a new iPhone once every 8 quarters. Or 12 quarters. Or maybe 16 quarters.

But people buy iPhones every quarter.

We know people are keeping phones longer these days... so that screws up what we used to think was a normal replacement cycle of every ~2 years.

It always makes me chuckle when they say "sales were lower than expected..."

What are they basing their expectations on? I'm sure Apple "expected" me to buy a new iPhone eight quarters ago. But no... I'm still using my iPhone 6S Plus!

I haven't been a part of these charts since 2015. But Apple is still getting some money from me from various subscription services, app purchases, etc.

I'm sure Apple would love for me to buy a new iPhone... but I don't have to.

And that's what makes an analysts' job difficult. These are non-essential, totally-optional items... with a widely varying purchasing schedule. If you just bought an iPhone 11 Pro Max... you probably won't be buying another iPhone for a long time. Certainly not next quarter.

We love our iPhones... but we don't have to buy them often.

If someone said the milk industry is slowing... it's because people aren't drinking milk. You have to keep buying milk in order to drink milk. It's literally a consumable with a very short shelf life.

But you can buy a phone once and keep it for many many years.

We always talk about quarterly sales... but a person only contributes to a single quarter. The next quarter it's all different people.

I don't know if anything I said makes sense... it was just an idea that's been rolling around in my head for a while.

 

[Baymowe335]

He’s not the only one. Someone else was on saying Apple’s PE should be around 16-18. Currently it’s closer to 27.

And that would be a wrong analysis. The PE is more like 24 and the 1.5B active devices and 17% growth in services makes that more than justified.

The “soft” services talk from a few is again based on an arbitrary analyst estimate, not any kind of guide from Apple. The services growth actuslly accelerated versus last year, as I mentioned, and Luca said they are “very pleased“ with the services number.

But the guy saying 16-18 on CNBC sold his position last week.

 

[jicon]

If I was to assume a 2-3% rate per year for inflation, those iPad and Mac numbers don't look encouraging over time. Fairly healthy on the phone and wearable front though.

 

[Baymowe335]

When Luca discussed services he didn’t mention Apple Arcade, Apple TV+ or Apple News+. Interesting.

Yes, he did. He said he believed they will have a material impact over time despite that not being the case today (brand new).

This is in the Q&A section. Cook also said the number of people subscribing to Apple TV was the way they are measuring success.

 

[jdoyle]

Tim Cook may be a dull as watching paint dry, but he knows how to turn a profit.

 

[Rogifan]

Yes, he did. He said he believed they will have a material impact over time despite that not being the case today (brand new).

This is in the Q&A section. Cook also said the number of people subscribing to Apple TV was the way they are measuring success.

He didn’t mention it in his prepared remarks. Eventually Wall Street will grow crabby because Apple will only give them the bare minimum on services.

 

[supremedesigner]

Is that like the most profitable quarter like ever? I don’t think I’ve seen anything higher than 20 billions. Insane. 😳

 

[paul4339]

Apple News has over 100 Million active users? Is that different than active users for News+ ?

 

[Unregistered 4U]

It really makes me wonder how long they will continue to keep the Mac around.

Well, they kept the Apple // around, didn’t they? They didn’t? Oh.

If I was to assume a 2-3% rate per year for inflation, those iPad and Mac numbers don't look encouraging over time. Fairly healthy on the phone and wearable front though.

The iPad number that REALLY matters is the one they no longer tell you... unit sales. Each one of those has a good potential to add to the services bottom line over time. They don’t make as much profit on iPads, but I’m sure they’re happy to trade front end profit for back end services.

Hmmm, higher profit margin on Macs... is that the macOS tax?

 

[ryanwarsaw]

He didn’t mention it in his prepared remarks. Eventually Wall Street will grow crabby because Apple will only give them the bare minimum on services.

They got crabby about iPhone numbers as well. If they get crabby again it is an excellent time to buy more.

 

[Zdigital2015]

And analysts on CNBC are complaining because iPhone numbers were too good. So Apple is back to being just a hardware company and their PE is too high now. 😂

I‘m sure these are the self same idiots who would be ecstatic for Apple to announce they were dropping iOS for Android, but question if they would be able to compete with *cough* Google. In other words, analysts are useless in the real world, they’re never happy or satisfied or remotely relevant.
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Same people that claim Apple is doomed whenever iPhone sales are slightly down? What do they want?

Generally, a wife, a mistress and a dominatrix, but I digress.

 

[TVreporter]

What's surprising and somewhat disappointing is that Mac revenue has stayed almost flat since 2011. I don't know how that equates to unit sales but, as a big advocate of the Mac as a platform, I would have hoped to see steady growth. After all, more Macs in the wild leads to more software, more development and a bigger focus on product innovation.

Still, I suppose it's not too surprising as our reliance on traditional computers diminishes in favour of smartphones and tablets.

If anything is doomed it’s the Mac branch. These numbers just justify them to slowly move away from Mac - but not any time soon as the numbers are still envious of many companies.

People are no longer tied to their desks anymore - myself excluded. Love my iMac.

But the average consumer can get by with an iPhone and tablet.

 

[hans1972]

75% of their business is iPhones and services. Goodbye, Apple Computer Company.

Q1 2015, iPhone and Services was 75% of their revenue.

Where have you been for the last decade?

 

[jerryk]

Glad I am long time shareholder. Good run up since the mid 90s.
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Well I don’t get it. All I read on MR is that Apple has lost its way, that Tim Cook sucks, and Apple is doomed.

That usually follows how Apple did not follow their wise advice, or how Apple screwed them by not repairing their computer for free. And precedes how the company was so much better when Jobs was running it.

 

[Zdigital2015]

I'm not one of the doom-and-gloomers but have been frustrated with some, but not all, choices by Apple under Cook. Just because a corporation is highly profitable doesn't mean a great many customers are not overjoyed with their experience. An extreme example, but are we supposed to applaud "big pharma" and "big oil" simply because they make a buttload of money?

No one is ever going to be satisfied with the decisions that any CEO makes. Are you telling me that you were 100% satisfied with every decision Steve Jobs made?

100% customer satisfaction is something that any company such as Apple strives for, but we all know that 100% is the goal, not the reality.

If you’re a stockholder (I am not), you are going to applaud when Apple makes a buttload of money! There is nothing wrong with that.

Please tell me your hot take is not because Apple doesn't make an expandable tower Mac in the $2,000-$3,000 range?
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75% of their business is iPhones and services. Goodbye, Apple Computer Company.

Apple Computer Company changed it’s name to Apple, Inc in January, 2007. You’ve been stuck in the past for 13 years.

 

[mi7chy]

The problem is that Apple is "married" to Intel because of Thunderbolt. Else they could absolutely kill it with Ryzen Desktops.

Not anymore. Intel finally pulled their head out of their rear end and made Thunderbolt available to other chipmakers royalty free to spur adoption. AMD consumer motherboards now have Thunderbolt like Asrock X570 Creator.

https://www.asrock.com/mb/AMD/X570 Creator/index.asp#Specification

 

[adnbek]

75% of their business is iPhones and services. Goodbye, Apple Computer Company.

You should be an analyst.

 

[tongxinshe]

So who are these members who say Apple is doomed? Every time revenue numbers are shared, we get the same sarcastic posts Apple is doomed. I’ve yet to find anyone seriously post on here that Apple is doomed.

You know that for every iOS devices sold, there are 15-20 more Android devices sold, don't you? You have obviously chosen a wrong guy to provoke.
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So who are these members who say Apple is doomed? Every time revenue numbers are shared, we get the same sarcastic posts Apple is doomed. I’ve yet to find anyone seriously post on here that Apple is doomed.

Although Apple is still doing very well in the US, it is constantly losing market share in most of the countries. On average, Apple's market share is gradually dropping into the single digit territory, which is actually a VERY RISKY sign. If Apple were able to keep pace with the same growth rate as the average industry, its sales numbers would be at least 50% higher than it is now.

 

[^^BIGMac]

OK. Fire Tim Cook.

 

[adnbek]

You know that for every iOS devices sold, there are 15-20 more Android devices sold, don't you? You have obviously chosen a wrong guy to provoke.

Of those 15 phones, 14 are throw-away 50$ phones running a version of Android that’s 2 years behind.

And why are you provoked? Did he mention you by name?

 

[Justanotherfanboy]

I'm not one of the doom-and-gloomers but have been frustrated with some, but not all, choices by Apple under Cook. Just because a corporation is highly profitable doesn't mean a great many customers are not overjoyed with their experience. An extreme example, but are we supposed to applaud "big pharma" and "big oil" simply because they make a buttload of money?

Lol, sure... post me a comment from the CEO of an oil or pharma company where they claim 98% customer satisfaction with their products (like Mr. Cook just did) & I’ll applaud them.

If they differ IMMENSELY from Apple, in that their profits come from people forced to buy gas & meds... despite degree of happiness/unhappiness with the products or prices- then I guess your comparison is bad.

 

[smirking]

You have obviously chosen a wrong guy to provoke.

Easy there Turbo. Your real name wouldn't happen to be Inigo Montoya, would it?