Apple Reports First Year-Over-Year Revenue Decline Since 2003: $10.5B Profit on $50.6B in Revenue

[DoctorKrabs]

When you make products that disrespect your customers, you lose sales. Simple.

Messy and cluttered product lines.

Poor and outdated product specs.

Exploitative upgrade prices.

Terrible marketing.

Glib focus on crass fashion items.

Tacky accessories.

Apple needs to refocus. Now.

This.

Especially what I bolded. Apple's focus on fashion and marketing to vain people is exactly the thing that makes me NOT like Apple as much as I would otherwise. Jony Ive going around doing interviews with Vogue and Vanity Fair doesn't convince them to like the Apple Watch or make me want one either, and I'm probably less likely to ever get one because of how Jony does that.

Marketing is also pathetic. I remember that Steve Jobs and Phil Schiller were proud of how "Apple doesn't do market research." That's obviously not how it is anymore. Their promotional material is also garbage and usually doesn't use proper English grammar.

 

[monkmartinez]

Apple

Yeah "awful" year shaping up for Apple. Only $40 billion in profits instead of $53 billion like last year. The sky is falling! Meanwhile, Microsoft profits are cratering...

There are things called trends, you should read up on them. This isn't about MSFT. This is about AAPL, missing after revising downward. This is how the wheels come off.

 

[extradryny]

Products not thin enough

 

[Manzzle]

Being that the iPhone is more than 50% of their sales, shouldn't that indicate that they should go all in for the iPhone 7 and not just wait for the iPhone 8?

 

[Poochi]

Five quick fixes for Apple:

1. Introduce easier to hold iPhone with more premium (glass) feel with more powerful battery. iPhone 6/6s require a case
2. Fix Macbook line (add Retina to Macbook Air, Slim down current Macbook Pro, whatever)
3. Introduce enhancements to iOS for iPad to make it a true laptop replacement (file system, ability to log in remotely using Java, etc)
4. Introduce a true skinny bundle TV offering (there are tons of Apple TVs out there, Apple is not monetizing them)
5. Improve Siri

1. case feeds the bottom line
2. the fix for MacBook line is iPad Pro 12.9"
3. this would erode MacBook sales - Apple wants you to buy multiple of the same thing
4. fix that remote already...
5. Siri is still toooooooo slow

 

[Gudi]

No innovation; too much greed. If the standard model iPhone 7 comes with 16 GB storage standard, I will laugh, shake my head and then Abandon ship for Android.

First you say innovation and then you demand already available specs at a lower price point.

 

[BootsWalking]

Cue the sky is falling posts. Only made $10bb in profits for 3 months. They are doomed.

Apple is certainly not doomed but what some people forget is that public companies sell at a premium to their future cash flow/earnings. This means there is a built-in expectation that either earnings will continue to grow to justify that premium and/or the earnings will be returned to the shareholders (dividends) in large enough quantities to justify the premium.

 

[pmau]

A second USB-C port and TB3 would have influenced the Mac numbers. I bet

 

[LovingTeddy]

LOL.... Stock dropped from 104.35 to 96.09... 8% drop...

 

[pmau]

5. Siri is still toooooooo slow

Like most women, she does not understand me at all.
She's not listening. It's just like real life.

 

[Apple Corps]

That's the way the cookie crumbles.

Ummm - the way Cook crumbles...

 

[whsbuss]

Being that the iPhone is more than 50% of their sales, shouldn't that indicate that they should go all in for the iPhone 7 and not just wait for the iPhone 8?

Way too late in the design process for any major changes.

 

[Breaking Good]

I'm sorry if this has been posted already, but I find it interesting that Apple best analyst expectations of $52.2 billion revenue , 51 million iPhones and 9.9 million iPads while falling short on Macs by almost a half million units.

 

[sudo1996]

Hah, down 8% now. Glad I sold... IDK how long ago, but I put it somewhere safer, S&P500. Sad I didn't short a week ago.

People here complaining because AAPL makes billions of dollars need to learn that investment is about where the puck is going to be, not where it is. I didn't think Apple had anywhere to go. It can tumble way more than 8% if/when too many people think that, and when that happens, it'll be instant. It'll go down to match the expectation that AAPL will continue making roughly the same profit every quarter, unable to expand but holding steady.

 

[Scott6666]

Five quick fixes for Apple:

1. Introduce easier to hold iPhone with more premium (glass) feel with more powerful battery. iPhone 6/6s require a case
2. Fix Macbook line (add Retina to Macbook Air, Slim down current Macbook Pro, whatever)
3. Introduce enhancements to iOS for iPad to make it a true laptop replacement (file system, ability to log in remotely using Java, etc)
4. Introduce a true skinny bundle TV offering (there are tons of Apple TVs out there, Apple is not monetizing them)
5. Improve Siri

You mean make insanely great products always, rather than dripping out a few features once a year.

 

[sober2ndthought]

Watch the stock price drop due to the lower than expected margins. And some people on here still question the decision for 16GB base phones and 5400rpm hard drives. If they didn't have those as base units, their margins would be even lower, leading to lower stock performance.

Which normally shouldn't matter, unless most of your corporate administration's compensation and bonuses are tied to stock performance.

If Tim's financial package wasn't tied so closely to stock performance, then he'd be more free to do what's best for the customers instead of the shareholders. Sure the company margins would be a little lower, but you'd have iPhones with 64GB of space at 16GB prices, and SSD iMacs as a base for the same price as 5400rpm machines today.

PC and Android manufacturers are increasingly stepping up the game, producing much higher quality products and have largely closed the quality gap with Apple. Yet they do not sell 1500 dollar laptops with yesterday's processors and 5400 rpm drives.

 

[Benjamin Frost]

Cook's faith in China has been misjudged.

The Apple Watch has sold just 5 million in its first year. It has failed very badly. Cook gave us a hint of its sales: he said it had sold more than the iPhone in its first year. That was between 5 and 7 million, I think. Either way, that is a really awful figure, considering the huge user base of Apple now compared to 2007.

Time for a new CEO.

 

[hugodrax]

WOW! Only 10.5 Billion-with-a-B dollars of pure profit... In what possible bizarro-world is that bad news?

If it declines further it becomes a problem. Would you be concerned if profits continue to drop over the next few years?

 

[RedOrchestra]

WOW! Only 10.5 Billion-with-a-B dollars of pure profit... In what possible bizarro-world is that bad news?

How much of that is off-shore and can't be "brought home" without a big tax hit?

 

[jujufreeze]

First you say innovation and then you demand already available specs at a lower price point.

The 4k iMac offers a 5400 rpm option.

That's like a BMW offering to be pulled by mules instead of using a combustion engine.

 

[JustThinkin']

Car won't bring masses of money anyway, how many people do they expect to buy a new Apple car? Assuming it'll cost the usual thousands a new car today costs. Not as many people can afford that sort of thing as they can the iPhone, and no one would be 'upgrading' their car every year! Unless it's leased.

I know. I think the Watch and the Car are Tim's boyhood dreams - not new items/categories that people need from a 2016 perspective!

 

[amirite]

Cook's faith in China has been misjudged.

The Apple Watch has sold just 5 million in its first year. It has failed very badly. Cook gave us a hint of its sales: he said it had sold more than the iPhone in its first year. That was between 5 and 7 million, I think. Either way, that is a really awful figure, considering the huge user base of Apple now compared to 2007.

Time for a new CEO.

Except the iPhone 1 wasn't dependent on another product.

 

[Analog Kid]

I am surprised that they did not pre-announce this miss. They should have known about it for a while (judging by the size of the miss).

Wasn't much of a miss, was it? Didn't they guide with $50-53M?

 

[ateslik]

I don't feel bad. Apple has been lost for a few years now. Their software is no longer pro and what is released (besides being stripped of features) is bug ridden. Hardware is outdated and greatly overpriced. No innovation or category revolutionary products.

I'd rank Apple as an "average" company right now.

To this I would sadly have to agree. While their products are still very well made, they are skimping in areas that they really should not be. They need to stop thinning everything and make the machines more powerful with longer battery life. Save the thinning for every other couple of cycles. The abandonment of the pro markets is also such a poorly thought out business decision. Average consumers always ask their "pro" friends advice on these topics - you need to bring the pros in close and keep them talking about you. It makes the other consumers feel good about their buying decision and gives them competition amnesia. Letting quicktime lapse on Windows, completely emasculating quicktime X on mac (was Compressor suppose to be the answer?!), the final cut disaster, the destruction of itunes, incessantly glaringly white interfaces everywhere, the apple music 4 billion dollar complete failure against Spotify, 5400rpm drives (!!!), the uncompelling watch, and less options for iPhone subsidies than when the phone launched are all really large missteps. Failing to secure the TV market yet has also been a mistake. I believe Steve would have definitely had that in place by now.

They are still hitting some high notes though, which is encouraging. The iPhone 6S is a beautiful piece of machinery with some really nice new features, the iPad Pro is a very satisfying experience and an incredible input device, Apple Pay works very well (and could be a big revenue stream for them long term), and iOS and OSX are still by far the nicest and most polished operating systems.

I have no point. Just my unsolicited observations.
</rant>.

 

[kerrikins]

Cook's faith in China has been misjudged.

The Apple Watch has sold just 5 million in its first year. It has failed very badly. Cook gave us a hint of its sales: he said it had sold more than the iPhone in its first year. That was between 5 and 7 million, I think. Either way, that is a really awful figure, considering the huge user base of Apple now compared to 2007.

Time for a new CEO.

Lol what? Their userbase is dwarfed by that of Android, yet they are outselling them and making more profit, how on earth can you say that it has 'failed very badly'? It's a brand new product line that is in its infancy for every manufacturer.

You also might want to take a look at this. Completely different markets, obviously, but the Apple Watch by no means has 'failed very badly' http://bgr.com/2016/04/26/apple-watch-sales-vs-rolex/