Apple Reports Q2 2018 Results: $13.8B Profit on $61.1B Revenue, 52.2M iPhones

[Solomani]

I thought no one wanted to buy Apple products? The iPhone X is a failure and too expensive for anyone to buy it. The HomePod is too expensive. The laptops and desktops all need to be updated before anyone will buy them and more.
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I'm glad I bought shares in the '90s.

I bought shares in the 90s too, when Apple CEO Gilbert Amelio was in charge. Do realize that was when AAPL was bleeding into near-bankruptcy, the Newton and eWorld were busts, and Steve Jobs was still mulling Gilbert's offer to come back to Apple. I bought my shares cheap.

P.S. I briefly shook Gilbert Amelio's hand at Macworld Expo. He was a nice congenial guy who gladly chatted and shook the hands of ordinary Apple fans at the Macworld exhibitor rooms. He was opposite of the elitist prick that was Steve Jobs.

 

[RobaxMan]

I bought shares in the 90s too, when Apple CEO Gilbert Amelio was in charge. Do realize that was when AAPL was bleeding into near-bankruptcy, the Newton and eWorld were busts, and Steve Jobs was still mulling Gilbert's offer to come back to Apple. I bought my shares cheap.

I'm guessing you cashed out of Bre-X at the high and went straight into Apple at the low.

 

[jeremiah256]

I mean, this.

Some of these posters and critics are complaining and lamenting over the fact that's Apple's no longer a modest $5 billion computer company. These criticisms do not make much sense to me.

Here's some facts:

• Apple Inc. dropped "computer" from their corporate title while Steve Jobs was alive and the CEO;
• Steve Jobs himself said of the Mac that it was a product that should be milked for all it was worth (in 1997 mind you!) so that Apple could move on to the "next big thing,"
• Apple could not be a $230+ billion corporation in revenue selling only Mac computers in an industry of ever-increasing margins and physics limits in the speed of CPU power.

At the end of the day, if you don't want to buy Macs anymore, get a Windows PC or a PC with an Intel or AMD processor and run Linux or ChromeOS and be done with it. Find a new ecosystem.

People have the right to complain and have opinions, but Apple isn't going back to the 1980s.

I believe part of the reason for the outright hatred toward Apple on this site is socio-economic. Due to the shrinking of the middle class and concentrations of wealth, anything related to high profits is equated with evil. In the minds of many, there is no way the most profitable company in the world is not corrupt. There is no way the users of their products are not tainted or 'sheep'.

 

[Abazigal]

The proof you have are the words from a corporation speaking on an earnings call to its investors. Granted, this is an earnings call, and nothing more.

The proof negatives posts have generally is a sentiment from their experiences with the product and people around them.

Both are valid in different ways. You tend to rely on financials to justify your position. Others tend to trust their experiences more.

See the difference?

People are entitled to their opinions.

However, it’s one thing to say that you don’t like Apple because of something they have done, and another to declare that Apple is dead or doomed or circling the drain just because you don’t like what they are doing.

So when people assert that the iPhone X isn’t selling because of its higher price tag or its looks (to quote an example), where in reality it was the complete opposite, doesn’t it reflect very poorly on their understanding of how Apple operates? Or their willingness to believe the worst in Apple just because they have an axe to grind?

I think it is becoming increasingly apparent that that much of the noise here is due to a small group of extremely vocal critics (and that’s putting it very charitably) who clearly are not representative of Apple’s user base as a whole.

They have every reason to be upset when Apple stops supporting a product they are passionate about, but they don’t understand Apple nor business in general.

 

[Baymowe335]

single digit market penetration since the 80's.

Spin that however you like.

There is no spin in the domination of Apple. They are growing total Apple devices by double digits, according to Cook on a y/y basis. They have over 1.3B in active devices.

This company just made $20.1B in 90 days and now reported $13.8B in profit in the following 90 days. We are talking about $34B in profit in 180 days.

They aren’t trying to have the most market share. They are trying to make the best products and ultimately, be profitable. They make almost all the profit available, so why would they change their strategy? It’s working.

This company is the best in the world, period. Look at the results. The growth y/y is staggering, particularly in paid subscribers (up an insane 100m subscribers) and in China.

 

[Solomani]

I'm guessing you cashed out of Bre-X at the high and went straight into Apple at the low.

Nah. AAPL in the 90s was my very first direct stock purchase ever.

 

[TonnyM]

So every, literally every story about poor iP X sales, slashing orders was complete BS. When will they start to learn that sneak peek into Apple supply chain has nothing to say about general sales and condition of Apples business. It’s the same over and over for years and media aren’t able to draw any conclusions for the hundredth time in a row. How can we now believe in anything they write like poor HP sales for example, since they’ve been wrong every time.

 

[Baymowe335]

So every, literally every story about poor iP X sales, slashing orders was complete BS. When will they start to learn that sneak peek into Apple supply chain has nothing to say about general sales and condition of Apples business. It’s the same over and over for years and media aren’t able to draw any conclusions for the hundredth time in a row. How can we now believe in anything they write like poor HP sales for example, since they’ve been wrong every time.

I told everyone not to listen to any of the fake news on “supplier checks” and order cuts. It’s ALWAYS fake and wrong, designed to get the price down.

Apple simply crushed it yet again.

Beautiful quarter.

 

[torana355]

Apple has become a Phone and Services company.

Macs and even iPads are just side projects. Makes me sad, but this is what it is.

That right there is why i'm slowly moving away from Apple. I guess the bigger joke is the unloved OSX is still better then Windows.

 

[Abazigal]

single digit market penetration since the 80's.

Spin that however you like.

That the iOS App Store earns more revenue than the google play store is all the evidence you need. It’s not market share in a vacuum which makes or breaks a company, but usage share.

Apple’s smaller market share is still a very large number in an absolute sense. Apple has aggregated the best customers (defined as those with the most propensity to spend), and it shows in the sales of apps and accessories.

Just ask any OEM out there - would you rather have Apple’s profits or Android’s market share?

 

[AppleScruff1]

Why are you wasting your life on this website then? Seems like a huge waste of your short time on this earth to spend it on a company who you don't see doing anything great ever again. If that's honestly how you feel, I'd move on and find somewhere better to invest your time.

Do you really want to look back on your life when asked and be like "I spent a lot of time on a website for a company I didn't think very highly of and didn't think would ever do anything great."

As opposed to looking back on your life and being proud of how much time you spent on a website for a company you worship?

 

[I7guy]

As opposed to looking back on your life and being proud of how much time you spent on a website for a company you worship?

As opposed to being proud of American companies who do well? Proud <> worship.

 

[doublesupercool]

Man, those graphs really don't fill me with hope for the future of Mac computers :/ I guess when you can charge computer prices for a phone, then you will keep pushing phones and the computers will fall by the wayside.
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At what point do you admit that Macs are no longer the backbone of the company?

I admitted this about 6-7 years ago. It was clear that Apple was going to focus on phones first and computers would get the dribble down run off benefits/tech.
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That right there is why i'm slowly moving away from Apple. I guess the bigger joke is the unloved OSX is still better then Windows.

Yeah, I LOVE OSX and my Macbook Pros but it has been clear for a while that "computers" is not really what Apple has been about for a while and the use of "PRO" on the MBP is increasingly a bitter pill to swallow for the price you are expected to pay...

 

[sunwukong]

Article Link:​

Apple Reports Q2 2018 Results: $13.8B Profit on $61.1B Revenue, 52.2M iPhones​

​

Thing is, for me, and I'm not the whole market, but I AM the market in my own house, that they are not going to get any of the red, the purple, the grey, the orange, the green, if they can't or refuse to offer me something I want and can use in the dark green. That underpins the whole stack for me. Ignoring and abandoning that, reducing Macs (Mac Pros) to monolithic, sealed, non-upgradeable, all in one machines is not where I want to go.​

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That graph shows why apple doesn't seem to focus on Macs as much as others.

But it's like a set up. They ignore it for years and years, fold macOS team into iOS, nickle and dime everywhere, basicaly heave overboard non-iMac or iphone machines, so tne sales flag, so gecause the sales flag they justify giving them short shriftbeven more, so sales flag further.

 

[pratikindia]

They still need Macs for everything.

 

[sunwukong]

Image, Apple would come out with a revolutionary e-cigarette. 10 times more flavourful and only half as dangerous as the competition. Everybody would start smoking and Apple would make a trillion, iPhones would only contribute to 10% of all income. That would be a super smart company.

Would You like that ?!?!?!?

I would not. I don't care about their numbers. I really liked Apple for a very long time, when every Keynote was exciting. Jobs had a mission, he wanted to change the world, he wanted to give us tools to improve our productivity and to ignite our creativity.

Cook only wants us to subscribe to music, iCloud and buy tons of tons of stupid software on the app store and even more stupid in-app-purchases.


This whole celebration of profit and this pie chart are an insult to the decades old sophisticated Apple customer.

I havent been sble to stomach getting through a snoozenote for the past few years. I miss the good times and energy. I feel ike I'm in (a boring) church. I used to record them ans download when available. Now I dont even bother and I am saddened. Things have changed. People crow about profit and revenue but it was never about that. They're putting cart before the horse for past 10 years.

 

[Solomani]

I havent been sble to stomach getting through a snoozenote for the past few years. I miss the good times and energy. I feel ike I'm in (a boring) church. I used to record them ans download when available. Now I dont even bother and I am saddened. Things have changed. People crow about profit and revenue but it was never about that. They're putting cart before the horse for past 10 years.

It has everything to do with Apple being the largest (by market value) company in the world. The largest company in the world is literally OWNED and controlled by its millions of investors, corporate allies, creditors, lenders, suppliers, etc.

Sometimes I wish (even as an AAPL stock holder, but I don't really own that many shares) that Apple would lose its #1 position and get knocked down a few notches, still a big profitable company, but become the underdog once more. Only in the days when Apple was the underdog, did insanely great products come before profits.

Losing the #1 spot also has a secondary advantage for Apple: Once Google or Amazon becomes the #1 (largest) company in the world, all the small greedy lawyers and patent trolls will refocus their sights (and litigation) away from Apple.

 

[DeepIn2U]

Glad I bought more shares yesterday. w00t!

You and me both! It’s the long haul this time.

Never forget that EPS will continue to be artificially inflated by the share repurchase program.

Please explain how you see it this way. I’m at a loss.

"Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter."
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Nothing artificial about real value.

They made $13.8B in profit, the most ever in Q2 for AAPL. Not good enough for you?

Lol good enough until next years Q2

But it's going to be harder than usual to get me to invest this much money again. What could they possibly bring in the next few iPhones, that would get me to upgrade for that price again?

Seems like a short "victory".

I think there’s a lot of room for phones, but the 5-6yr run is in glasses and watch eventually replacing the phone if a major advancement in battery tech emerges.

Nobody predicted doom and gloom - just flat iPhone sales, which is exactly what happened. What they're worried about is the future - you can't keep growing earnings when your sales are flat and people are showing resistance to further price increases.

Analysts , bloggers chip component techs earnings lower than analysts expectations prettt much said it was gloom.

The move to services shows how they recognised the profits were far too dependent on a single revenue stream (iPhone sales) and as well as mitigating risk, I'm sure the focus on services will help keep people within the Apple ecosystem.

The days of the Mac however are now firmly in the rear view mirror.

Seems like departments under Eddie Cue is doing phenomenal job! Queue the hate redirect though.

Keep in mind theses major increases in service revenue is synergistically dependence of active iPhone, ipad, watch, Apple Watch users and finally Mac users. All in that order

The beautiful irony here is how TC is as diametrically opposed to #45 on just about every social issue imaginable yet reaps what is likely the most substantial of all rewards from the tax plan and of course uses the money to buy back stock.

Elon Musk might have principles and might accomplish something significant like many consider Steve Jobs did. TC, instead, is interchangeable with just about any other CEO aside from lip service to a few social issues.

What is #45??!!!!???

You will never know. They never tale anyone and that’s a fact. Don’t believe a word Cook says about it either as ALL th evidence points to the contrary of what he claims.

Lol what evidence points contrarily to the facts?? ?? ??!?

 

[ipponrg]

So every, literally every story about poor iP X sales, slashing orders was complete BS. When will they start to learn that sneak peek into Apple supply chain has nothing to say about general sales and condition of Apples business. It’s the same over and over for years and media aren’t able to draw any conclusions for the hundredth time in a row. How can we now believe in anything they write like poor HP sales for example, since they’ve been wrong every time.

On the contrary, this type of news is what you want as a trader. Buy low, sell high. Its purpose is to drive the stock down. This is why AAPL is so attractive to traders both long and short. You can trade options on this and make a HUGE profit easy because of how easily it swings on news.

 

[Solomani]

How so? People simply just are not buying Mac’s as the same rate as other devices.

Even if the product line was vastly different it would be the same. This is the future

True. And people are simply not buying PCs at the same rate like they used to. It's just saturation. Everyone in developed countries that needs a PC (Windows or Mac) already has one. They have no need to keep replacing it every year or two as long as it works.

Very soon, the same can be said of all smartphones (Apples or Androids)….. statistics will reveal in coming years that the smartphone market will become saturated, even rural Chinese farmers and Indian slum residents will have some cheap (Huawei-made) smartphone that's adequate (for their needs) if not great.

This is why Apple has no choice but to keep looking at future revenue streams, be it "wearables" or Services. As much as I love my Macs (iMac fan for years), I understand Apple cannot tie itself down to a single product (personal computers) whose era has peaked.

 

[ipponrg]

As opposed to being proud of American companies who do well? Proud <> worship.

I'm glad we're conflicted with our American companies such that we praise Apple more than Google. Nonetheless, I am definitely proud of "designed in America" products that are assembled in China.

Very soon, the same can be said of all smartphones (Apples or Androids)….. statistics will reveal in coming years that the smartphone market will become saturated, even rural Chinese farmers and Indian slum residents will have some cheap (Huawei-made) smartphone that's adequate (for their needs) if not great.

It's part of the reason Apple is slower than other companies in their iPhone tech or passively forces you to upgrade to newer software. They can create more iterations of their phones hence keeping people coming back to "upgrade" purely due to their retention rate.

It's undeniable that their current business model is around the iPhone. It's their bread and butter which might be part of the reason Macs/minis has (briefly?) taken the back seat.

 

[ThatGuyInLa]

Of course with so much of the company leveraged in one area, if that part ever does crash and burn...

 

[gavroche]

They dropped "computer" from their name, they stopped upgrading their Macs regularly, they're showing "What's a computer" ads on TV and the revenue from all Macs is going to be surpased by iPads in a year or two.

All this tells me is that if things continue like that, Macs could probably cease to exist within a decade. I don't care about how much profit Apple can make if the end result is the death of macOS.

If you think that will never happen, remember that the iPod made a lot of profits but Apple stopped making them when profits slowed down and people started using their iPhones as music players. The same could happen with Macs being replaced by iPads, which is fine for users but not for programmers, designers, etc.

Windows, Linux and BSD will be the only possible choices in the near future, unless macOS goes open-source or something.

I hear ya.... but isnt this an industry wide problem? Seems like comouter sales are in sharp decline across the board... not just macs. People (non-techies or professionals that rely on computers) can do most everything on portable devices.

 

[jarman92]

Remember when the X was announced at $999 and all the defenders said that the margins are worst.

El oh freaking el.

Sell less and make more money.

Btw I’m an owner of the X but let’s be honest, bean counter CEO raised the price to make more profits, not because the margins were less.

Except if you read the article you would notice that gross margins are down; since the X was the best-selling iPhone this quarter the results are totally consistent with the X having smaller margins. Not saying its true, but your snark is entirely wrong.

 

[gavroche]

I don’t buy into if they released new macs each year then they would sell more.

The reality is that the Mac is never going to be the star of the lineup again. Same thing will happen to iPhone and all products.

As an Apple user I welcome change but I see so many others don’t and still think it’s the 1980s or something.

Computers dont improve yearly like they did back in the day. Its hard to get people to shell out a couple grand on a machine that might be 5-10% faster. Not much benefit. And that is in addition to people not needing them as much as they used to (since 90% of what most people used them for is now done on peoples phones).
Phones are still seeing much more significant improvement each year. That will slow down as their processors get better and better, though.
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THIS, is the correct answer. WEEKLY unit sales could tally as below and Tim Cook wouldn't be lying

X - 5
8+- 4
8 - 4
7+- 4
7 - 4
6s+ - 4
6 - 4
SE - 4

And if you actually believe that each of those models is selling a nearly identical share... or that the X is barely outselling each of those old outdated models... well... i feel very sorry for you.