Apple Reports 4Q 2016 Results: $9B Profit on $46.9B Revenue, 45.5M iPhones

[macgabe]

Where I live (Europe) we're nowhere near to getting iPhones 7 yet. They don't even have tryout showroom models. Yet every time I go in to my local phone shop there are people asking about the 7 plus and adding their name to the waiting list. So obviously they are massively "supply constrained".

Cook expects high 70s in rev. That sounds fantastic if true - look at the chart, it will reverse the recent 2 year decline and that before the great iPhone 8 supercycle year. Apple is usually very good at predicting revenues.

Everyone who bought a phone 3 years ago and delayed upgrading last year now MUST buy a phone because the battery is dying. I'm so desperate I've just ordered a battery replacement kit from iFixit while I wait for my new 7plus. There is next to no more 2 year discounted cycle - I'm now paying $1000 for the phone (just $200 discount); 3 years ago I paid about $500; 2 years ago my friend got hers for $400; so battery life is now the most important factor IMHO for phone replacement.

Unemployment is at record lows in the United States and Britain and is falling in Europe. i think this is going to be a good Q4 for Apple.

The 2015 fall in revenues coincides with strengthening of the $. Most of Apple sales are outside the US. So in some respects Apple's business has been growing even while dollar-denominated revs have been falling. This will become evident the day dollar reverses, which WILL happen, probably in year or two, maybe sooner.

 

[GadgetBen]

There will be a need to produce a really special iPhone for the anniversary next year. Can't wait.

 

[recoil80]

What about Apple Watch sales, which are somewhere in the "other" category, and according to another article, down 40% since last year.

Watch was due to update last quarter, so obviously sales were down.
I guess they're disappointed by Watch sales so far, but this quarter they have the new series 2 so I'd expect better results. Too bad they count it in "other" so we don't know exactly how many Watches they sell

 

[macUser2007]

Sold 2.5 million less iPhone's than this time last year.
...

Well, Apple better come up with the next big thing, fast.

Samsung's smart phone sales surpassed Apple's in 2016 (the Galaxy S7 is the first Galaxy which is a really good phone and its camera is still better than the newest iPhone 7).

And the Chinese are coming, in a big way:

I just don't see it with the current Apple management.

 

[4tzer]

Well, Apple better come up with the next big thing, fast.

Or lower the prices, so apple products become more affordable. Apple has lost the magic touch and should realize that themselves, the creative and pro community know already.

 

[44267547]

Or lower the prices, so apple products become more affordable. Apple has lost the magic touch and should realize that themselves, the creative and pro community know already.

No. Apple will not lower their prices for the sake of affordability. They charge a premium and in return, Apple's hardware is premium with high standard build quality, exceptional customer service and peace of mind security. If you feel Apple has lost its magic touch, that's your opinion.

 

[827538]

I don't think 'Apple is doomed' far from it. But more and more I think Tim Cook is a pretty poor CEO.
The Mac lineup is embarrassing, it's really not that difficult to keep the latest silicon in your products and then release new designs when they are ready. 3 years with the same Haswell chip in a rMBP is ridiculous. The rest of the Mac lineup is seriously outdated too - aside from some of the iMac's and rMB.
All this attention on watch bands and the Apple Watch, what their stores look like, their multicultural/multiethnic (racist) hiring policies just wreak of a company that's resting on its laurels and has taken its eye off the ball.
Their line ups are becoming obtuse and convoluted. They should have say three sizes of iPhones and iPads, all with the latest chips but they don't, the have Pros, Airs, Plus's etc, plus the recent price increases are starting to pinch in my opinion. There's too much competition to be pushing up the price of the iPhone.

I like the Airpods and I'll probably pick some up, but to remove the headphone jack and then charge £150 for the new Airpods is just arrogant. Imagine how people would feel if they were included with the 7 or dropped the price to £99?
Courage isn't dropping a really great and useful port, that's just arrogant to claim that. Also agreed that Eddy Cue is a moron.

 

[decafjava]

Where I live (Europe) we're nowhere near to getting iPhones 7 yet. They don't even have tryout showroom models. Yet every time I go in to my local phone shop there are people asking about the 7 plus and adding their name to the waiting list. So obviously they are massively "supply constrained".

I don't know where you live in Europe but in Geneva Switzerland there are plenty of 7s in showrooms, but I have only seen one in the wild so far (hard to tell - only the bigger camera lens is a giveaway unless you get to see the bottom without the headphone jack and it's rude to stare at other's bottoms).

 

[maflynn]

iPad net sales not too encouraging...

iPad sales have been sinking for years, Apple has not found any feature, app, design, or service that would turn things around for the iPads.

Why did R&D double? Where did it go?

Research and development. They won't say what they're working on, otherwise their competitors will look into that product/service as well

No subsidies and the same ol' phone... what do you expect? People eventually catch on.... some later than others. Milk milk milk. That's all they do.

Yep, no matter how you slice it, spending 700 dollars on a phone vs 200 means that people are less likely to upgrade as often.

Pretty good numbers taking into account that the only real new part from Apple is the A10 chip in 2016. Everything else was already there.

I'm not sure how pretty good can be defined by lowering sales across the board

There will be a need to produce a really special iPhone for the anniversary next year. Can't wait.

They need to produce new products, and keep existing products updated. The Mac Pro has gone for 3 years without an update, for some silly reason they thought it was a good idea to keep the 15" MBP on Haswell, and gimp the 21" 4k iMac with a 5400 rpm hard drive and an iGPU. Is it any wonder that the mac sales have been decreasing?

But more and more I think Tim Cook is a pretty poor CEO.

He's been a decent manager of what existed, but they need a leader to take them to the next level, Tim is not that person

 

[El Cabong]

It's next quarter that we will really know how well the iPhone 7 is doing. There were only two weeks of sales of the new iPhone in this quarter.

The 6S did poorly because of a lack of innovation and strong competition. The 7 did little to improve over the 6S. We already know this, so can make a reasonable prediction regarding its sales (as analysts and manufacturers have before the phone was even released).

 

[maflynn]

The 6S did poorly because of a lack of innovation and strong competition. The 7 did little to improve over the 6S. We already know this, so can make a reasonable prediction regarding its sales (as analysts and manufacturers have before the phone was even released).

There's also the factor that there's no new markets to tap, so the pool of new, fresh customers have shrunk. So now its up to Apple to roll out designs that encourage and tempt current owners to upgrade. The 6s, and the 7 have few features that do that.

 

[ryanwarsaw]

There are a lot of other places you can live on that kind of scratch.

Love the Cook spin quote we've had the largest number of android users switching to iphone this year of any year. Would love to know how many the did opposite.

You can count me as one of each. I switched to Android and 4 months later switched back to Apple.

 

[Steve121178]

Wish I had 237.6 billion in cash and marketable securities

Even if you did, you'd still die like the rest of us.

 

[otternonsense]

The iPhone 7 Plus camera instantly became an "I can't live without" item. New flash and 2x optical zoom.

Maybe for 10 vocal people on social media.

The A10 processor is INSANELY fast.

Which you will never notice unless you play heavy 3D games.

Battery life is noticeably better. Screen color and clarity is remarkable. Lightning EarPods sound better. Speakers sound better. Waterproof. New pressure-sensitive home button that doesn't foul days or weeks after adding your fingerprint to TouchID.

Debatable. I've fiddled for a couple weeks with a unit we have at work. Battery lasts the same as 6S. Earpods sound exactly the same. I/we rarely ever use the speakers. I guess I'll appreciate the waterproof feature when I'm careless enough to expose it to liquids. My manager's 7 Plus did stop working after he dipped it in his bathtub though. What about the button? The 7 home non-button reacts like a clunky trackpad, and it's not like the "old" one had such a high failure rate.

Just what about it isn't different? Oh, the form factor. Well, there isn't a whole lot you can change in a mature device category like this. Edgeless displays? People complain of usability issues and case interference. No top/bottom bezel? No place to put the ear speaker and proximity sensors. Projector that no one would use? FM radio that can't get a decent signal in 90% of America?

LOL you mean all that? Here, have some more koolaid. (Good golly I miss Steve)

 

[The Game 161]

iPad net sales not too encouraging...

Think people see less reason to upgrade as it does what most want it to.

 

[DEMinSoCAL]

Maybe for 10 vocal people on social media.



Which you will never notice unless you play heavy 3D games.



Debatable. I've fiddled for a couple weeks with a unit we have at work. Battery feels the same as 6S. Earpods sound exactly the same. I/we rarely ever use speakers. I guess I'll appreciate the waterproof feature when I'm careless enough to expose it to liquids. My manager's 7 Plus did stop working after he dipped it in his bathtub though. What about the button? The 7 home non-button reacts like a clunky trackpad, and it's not like the "old" one had such a high failure rate.



LOL you mean all that? Here, have some more koolaid. (Good golly I miss Steve)

You have such a positive attitude. You must be really happy in life.

 

[otternonsense]

Think people see less reason to upgrade as it does what most want it to.

I've stalled the purchase of an iPad endlessly in anticipation of the next improved version. I was credit-card-in-hand close to ordering the jumbo iPad Pro when it was first released, but it still felt somehow incomplete. After numerous times of using it side by side with its 9.7" sibling at the Apple Store, I left undecided still, and fed up with the wasteful dysfunctional experience of iOS 10. It's just not a good fit. It would be a no-brainer for the (12" especially) to use OS X (or a special variant) with a proper file system and real Pro apps. Why they haven't done that is beyond me. Should that happen, I'd preorder in a heartbeat.
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You have such a positive attitude. You must be really happy in life.

Simply calling a spade a spade. I'm rather peachy otherwise.

 

[decafjava]

The 6S did poorly because of a lack of innovation and strong competition. The 7 did little to improve over the 6S. We already know this, so can make a reasonable prediction regarding its sales (as analysts and manufacturers have before the phone was even released).

Come on the A10 is the fastest chip out now - it will matter not just for games but as more intensive apps come on line. Both the 6S and 7 have 3d touch (on the 7 much better apparently) which is a major innovation. OIS on both models of the 7 is a significant improvement and yes an optical zoom and better low light performance are great upgrades. Oh and a 256 GB model for those photo and video horders.

 

[kemal]

Watch 2 meh.
iPhone 7 meh. OK, bokeh.
No new laptop.
No new iMac.
No new Mac Pro.
Was there an iPad? Missed it.

Apple has had a fantastic year considering.

 

[DEMinSoCAL]

I've stalled the purchase of an iPad endlessly in anticipation of the next improved version. I was credit-card-in-hand close to ordering the jumbo iPad Pro when it was first released, but it still felt somehow incomplete. After numerous times of using it side by side with its 9.7" sibling at the Apple Store, I left undecided still, and fed up with the wasteful dysfunctional experience of iOS 10. It's just not a good fit. It would be a no-brainer for the (12" especially) to use OS X (or a special variant) with a proper file system and real Pro apps. Why they haven't done that is beyond me. Should that happen, I'd preorder in a heartbeat.

Agreed. So much more could be done with all that extra real estate. Instead, you get lots of space between the icons and not much else.

 

[TallManNY]

I missed the conference call and not had a chance to go through the whole thread, so apologies in advance...did Tim get called out over the stagnant Mac line, and did he utter the words "some great products in the pipeline, next year is going to be so exciting"?

I believe it was "strongest pipeline ever" or something like that. I think this is always technically true because the iPhones, iPads, and Macs are always stronger year over year (or in case of Macs whenever Apple gets around to updating them).

AirPods are next big revenue driver for Apple. I'm sure there are nice margins on them (though not as good as on the Beats line) and the margins will be better with version 2 or when they can get costs down. I suspect margins on Apple Watch 2.0 are better than on 0 version.

 

[otternonsense]

Agreed. So much more could be done with all that extra real estate. Instead, you get lots of space between the icons and not much else.

Thank you. Especially on the Notification and Control Center the waste of space is baffling. You are made to swipe through cards even though everything can fit nicely on single screen view. I don't get what they were thinking with those UI choices. Isn't the goal to increase intuitiveness/efficiency while reducing visual clutter?

 

[dilbert99]

For the full fiscal year, Apple generated $215.6 billion in sales with $45.7 billion in net income, down from $233.7 billion in sales and $53.4 billion in net income for fiscal 2015.

That pipeline is mighty constipated

 

[Hagrid]

We have an iPad pro and an original iPad and use them both. The problem with iPad is that it's good enough to just keep using it for what it does and "who cares" about fancy new one's when the old one's are built so well. Hard to justify a new iPad for most folks when they already have a few that work just fine.

In a nutshell - iPad has a longer re-buy cycle.

Agreed, I have an original iPad and an iPad 3. Still use the iPad 3 every day - does what I need it to do - although I'm about ready to update. Just waiting for the next release of iPad Pro, whenever that comes.

 

[Atzer]

No. Apple will not lower their prices for the sake of affordability. They charge a premium and in return, Apple's hardware is premium with high standard build quality, exceptional customer service and peace of mind security. If you feel Apple has lost its magic touch, that's your opinion.

It's not only my opinion though, thats my point here. If they come with a weak and incomplete mac lineup, they might lose this segment.