Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple Reports 4Q 2018 Results: $14.1B Profit on $62.9B Revenue, 46.9M iPhones
- Thread starter MacRumors
- Start date
- Sort by reaction score
It's crazy how tiny Mac sales are compared to iPhone or even Services. You'd think that the Mac is more important than, say, iCloud storage, but apparently not.
The pie chart is nice. It will be more meaningful if a series of them over a few quarters or years were posted along-side. Then we will be able to see their growth in services income.
That’s not true, they are actually purchasing more products at higher prices. iPads just got refreshed with higher prices to boot and they are already sold out of pre orders. Services are now at 10 billion for the quarter, looks like consumers are happy with that part of apples business as well.
Right....the same posters have been saying the same thing for years now, as long as their products are priced accordingly consumers are more then willing to pay for it. Currently apple offers products that are unmatched in each respective category and as i
said consumers are more than willing to pay for it.
Apple has been telegraphing their intent for some time now. They are slowly transitioning from the smartphone to wearables and services.
https://stratechery.com/2018/apples-middle-age/
People who think that this is somehow divine retribution for higher prices and neglect of the Mac don’t realise that it really was the only route they could have taken.
Apple will do just fine.
I can tell you that in our household, we are purchasing fewer and fewer Apple devices and are keeping our existing Apple devices longer and longer. I used to buy my wife a nice Apple gadget for her birthday, and then for the holiday season in December, and then again for our anniversary, etc. I would also get a couple Apple devices for myself every year and one or two for my son. That doesn't happen anymore. We now average one or fewer Apple devices per year for the entire family.
Let's not forget another very important thing. The economy in the US is the best it has been in over a decade. The unemployment is the lowest in 50 years. Consumer confidence is record high, while Apple is having problems with increasing their sales volumes. What would it look like if the economy were in the tank today like it was in 2009? If memory serves correctly, in 2009 Steve Jobs was running Apple while the economy was the worst in a generation, while the Apple sales numbers were growing like crazy. The AAPL stock price did very well in late 2009 up to September of 2012, when the AAPL stock price stagnated for four years until 2016. That four-year stagnation in the AAPL valuation mostly coincided with the passing of Steve Jobs and the new strategy that Tim Cook decided to implement. AAPL has had a good run in the last couple of years, but so did most other tech stocks. Look how well MSFT did in the past few years. I don't know if Tim Cook really deserves any credit at this point.
Last edited:
Yes, they do. You're ignoring the revenue and EPS growth, which is what drives stocks at the end of the day.
Let me start with facts:
40% y/y EPS Growth
20% y/y revenue Growth
~2M more iPhones sold in F2018 than in F2017
They also aren't forecasting flat sales for this Quarter...they are forecast 6% higher sales. Do the math:
Last year, guidance was $84-$87B
This year, guidance is $89-$93B
Compare Apples to Apples and it's 6.4% higher guidance if we take the midpoint. Given that Apple always sandbags a little, they will likely be at the top end to over the $93B guidance, just like they were when the reported $88B last year.
Raising prices and having flattish revenue growth is bullish and shows they have pricing power. Tremendous pricing power. The revenue growth can't be ignored as, "Oh, that's just because they increased prices." That's money they get to keep and the unit sales we have show that people basically didn't blink and in some comparisons actually bought MORE.
Apple just sold more iPhones in F2018 than they did in F2017.
Apple is trying to get investors to stop watching a 90 day clock of unit sales as if it matters. This company is about far more than unit sales of their gadgets.
[doublepost=1541112771][/doublepost]
Gene Munster is better than those fools you're watching on Fast Money. I really don't think Apple should be viewed as a gadget maker, so I've been calling for this for years. Apple's value is about their ecosystem, software, pricing power, and overall sales. I'm a huge investor. I want transparency.
But let me ask you this: Why does it matter if Apple sold 48M iPhones or 49.1M? I want to look at their sales revenue, of course, but the 1.1M difference in a 90 day period really misses the point of the numbers.
I'm glad Apple took a bold approach and just said, forget unit sales. If they start tanking, we'll know from the revenue numbers. If they are 1M off, we don't have to obsess over why and proclaim Apple is doomed every time they post a unit sales number that's less than expected (which Apple never even guided for). The unit sales targets have always been made up by analysts.
Yeah I just bought a slight dip a week or so ago and will get my wallet out again now.
I'll buy them. This company is growing high double digits. They just put up 40% EPS growth and 20% revenue growth.
They also buyback $20B in stock per quarter. I hope the stock goes down more so Apple can buy more shares cheaper.
Your argument obviously makes a lot of sense. I hope you are right and I am wrong even though I have a bad premonition about the future (perhaps not an immediate future) of this stock.
Wow! Now we know the secret to Apple's riches.
That said, dude, that is serious spending on Apple products every year! You know, they look fresh and perform near peak even after four years.
Good for you though - both for being able to spend so much then and cutting back now. Cheers.
Apple doesn't need its customers to refresh every year - they need a broader base, i.e., new recruits into the Apple environ. With the new Mac minis, that will happen, if more than 50% are new buyers into the system.
I don't mind this either. I'm talking about the long-term strategy, not the short-term dips in the stock price. I see no strategic thinking on the part of Tim Cook whatsoever.
Whose estimates? You mean the made up analyst targets? Apple has never provided unit sales targets, which means not reporting them actually makes sense. It was stupid to worry about 48M iPhones versus 49M iPhones in a 90 day period. Look at the freaking numbers. Revenue growth is 20% y/y and EPS is up 40% y/y. Companies are valued because of their earnings and future EARNING power, not if they are going to sell more widgets.
Let me explain this another way. Apple could increase unit sales if they dropped pricing by half, but WHY would they do that? The goal is to make more money, not sell more units.
I love how you dismiss the revenue growth because they raised prices. This isn't a bad thing. It shows they have pricing power.
You do realize they sold 2M MORE iPhones in F2017 than in F2018, right? That was with the iPhone X. So they increased unit sales for the year and increased ASP tremendously to the tune of 20% revenue growth.
I appreciate the compliment, but that comment was just an example. It's not about me. One of my coworkers who used to get a new iPhone every year no longer does it. This happens a lot. So, I'm not sure how Apple is planning to grow their customer base with this kind of pricing, whereas there are clearly good non-Apple alternatives for those who own no Apple devices yet. Think about it. The new iPhone Xs (not the most expensive iPhone either) starts at $1,000 with a meager 64 GB of storage. The newly released MacBook Air (2-core CPU, 512 GB SSD and 16 GB of RAM) costs $1800, and it's not even close to being a professional-level machine. That is INSANE.Wow! Now we know the secret to Apple's riches.
That said, dude, that is serious spending on Apple products every year! You know, they look fresh and perform near peak even after four years.
Good for you though - both for being able to spend so much then and cutting back now. Cheers.
Apple doesn't need its customers to refresh every year - they need a broader base, i.e., new recruits into the Apple environ. With the new Mac minis, that will happen, if more than 50% are new buyers into the system.
You don't see the strategic benefit of industry leading silicon, the best facial recognition tech, the stickiest ecosystem and software on the planet?
Really? it is pretty strategic to drive higher value iPhone products that produce more profit per unit, have the best silicon in the market, and that drives a wearables and services strategy. It is also very strategic to get into a reoccurring revenue model pattern with your customers (for both phones via IUP -- which also allows for higher prices -- and with other iCloud services).
You might not like that strategy, but it is very much an intentional plan on their part.
You can't drive the pricing up forever. There's a limited supply of money in most people's budgets. There will be (or has there already been?) a point when most folks will tell Tim Cook to f*** himself and will go with a competitor, which, by the way, is getting closer and closer to being on par with Apple. This is true for everything Apple is making. I still think Apple's devices are the best, but the competition is breathing down Apple's neck in every category, and in a few categories, the competition has passed Apple a long time ago.
To some people, their phones are more important to them than their cars. Yet they will pay $500 a month for that. Paying $50/month for your phone seems a value in comparison.
Also, XR pricing is right in line with their previous flagship pricing, when you take into account inflation.
But, you didn't really answer the question: you claim there is no strategic thinking. Do you really mean that? Or do you mean that you don't agree with the strategy?
Er, it actually kinda is somewhat magical, as literally every other business in existence has not been able to figure out how to do it as well as Apple. You get that this is quite a bit more complicated than raising the price, no?
I'm sorry to burst your bubble, but other companies did this in the past. This strategy only works for a limited amount of time, and then, the strategy result in a massive loss of the market share and the stock price that loses 75% of its value. I hope this doesn't happen to AAPL, as this would not be good for me personally.
What are you basing it on? It's certainly not the actual numbers. Don't let emotion get into your decision. The strategy is working, as we see in the data.
I understand people are frustrated with price increases, but it just shows Apple has pricing power. Every company raises prices...
The stock reaction is more a result of Apple holding up so well the last month or so while AMZN, GOOGL, FB, NVDA, NFLX have been crushed.
I suspect after a few weeks of digestion, the investors will get over not reporting unit sales and they'll see this quarter was amazing and guidance was not "weak." It's 6% growth in revenue that they guided and that's on a huge number.
Valid comparison - people love to refresh.
A $30-50,000 car refreshed every there years (lease, mostly) vs an iPhone refreshed every two years is not even close. Even a Walmart employee can do the iPhone refresh.
If Apple succeeds in recruiting new customers 20-25% more every year in any of their lineup, they will $2 Trillion in three years. Don't hold me to this statement - but I will take the credit in 2021!
I bought some Apple stock several years ago when I was truly sold on what the company was doing. I complained for a while as the stock price didn't seem to correlate with how successful the company was and how good their products were. These days, I no longer feel great about what the company is doing, but their stock price is doing better than when I was happier about what they were doing.
There's a part of me that feels like I should sell, since I no longer am excited about what they're doing. But then I look around and realize that the competition isn't doing a better job. So I guess I'll stay put with my stock.
If Google ever gets a clue on the hardware front, or some other player comes out of nowhere with a game-changing product that blows away what Apple's offering, I guess that's the time to quickly sell. Until then, it's like we're in the days of Microsoft or IBM's heyday, where they're successful more-so because they own the market and the competition sucks, and less because they're on the forefront of innovation, like they once were.
There's a part of me that feels like I should sell, since I no longer am excited about what they're doing. But then I look around and realize that the competition isn't doing a better job. So I guess I'll stay put with my stock.
If Google ever gets a clue on the hardware front, or some other player comes out of nowhere with a game-changing product that blows away what Apple's offering, I guess that's the time to quickly sell. Until then, it's like we're in the days of Microsoft or IBM's heyday, where they're successful more-so because they own the market and the competition sucks, and less because they're on the forefront of innovation, like they once were.
