Apple Reports Q3 2019 Results: $10B Profit on $53.8B Revenue, Highest June Quarter Revenue Ever


Zen_Arcade

macrumors regular
Jun 3, 2019
107
99
In line with expectations.

Which is very impressive given how high expectations are.

Interesting revenue/margin guidance for next quarter.
 

Baymowe335

macrumors 603
Oct 6, 2017
5,183
9,083
Compare this to 23% revenue increase for Huawei and it becomes clear who has the momentum.
[doublepost=1564519563][/doublepost]

And the services is mostly app store fees and subscriptions and Apple Care. That's not going to explode any time soon (especially taking into account slowing iPhone sales)
Apple and Huawei are different companies and growth rates spanning different companies in different markets doesn't make sense. Huawei has about 8% profit margins, meaning they will stop at nothing to increase sales. Apple

Apple showed solid growth in 4/5 businesses and posted the best June revenue ever.
  • Mac 11% growth.
  • Wearables staggering 48% growth.
  • Services 13% growth.
  • iPad 8% growth.
  • iPhone 12% decline was better than expected.
 

I7guy

macrumors Core
Nov 30, 2013
20,389
8,219
Gotta be in it to win it
Compare this to 23% revenue increase for Huawei and it becomes clear who has the momentum.
[doublepost=1564519563][/doublepost]

And the services is mostly app store fees and subscriptions and Apple Care. That's not going to explode any time soon (especially taking into account slowing iPhone sales)
Sure but two different business. Apple makes in a quarter what huawei makes in a year.
 
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realtuner

macrumors 65816
Mar 8, 2019
1,408
3,677
Canada
Compare this to 23% revenue increase for Huawei and it becomes clear who has the momentum.
[doublepost=1564519563][/doublepost]

And the services is mostly app store fees and subscriptions and Apple Care. That's not going to explode any time soon (especially taking into account slowing iPhone sales)
Have you paid any attention to Services revenues over the last few years? It's been going up regularly.

Huawei? This chart sheds some perspective on their numbers. Q2 has always been a strong quarter for Huawei. Not this time. Sales were flat.

huawei.jpg
 

Baymowe335

macrumors 603
Oct 6, 2017
5,183
9,083
Listen to the calls guys. They are extremely bullish.

Wearables and services together approach the size of Fortune 50 company.

Return to growth in mainland China, despite foreign exchange headwinds.

Active installed base of iPhone new all time high and up y/y in all of the top 20 markets.
 

Solomani

macrumors 68040
Sep 25, 2012
3,702
6,182
Alberto, Canado
I'm guessing services business has lower margins than products business?
Logic says that services would actually have higher profit margins than manufacturing and spending gazillions in R&D for iPhones/Mac/hardware. Let's realize that it costs Apple almost nothing to sell an iTunes gift card or Apple cash? They sell themselves. Apple doesn't have to pay for expensive factories to churn them out. Apple also doesn't need multi-million-dollar factories to sell those AppleCare+ warranties. They pretty much sell themselves also.

Services still do cost some money… for example, the cost of maintaining the cloud servers for iCloud, the cost of paying employees that operate the iTunes Store, the cost of negotiating contracts with third party content providers (e.g. the ones that produce music, movies, etc). But it's still not much compared to the billions and billions they have to invest in hardware R&D, investing in factories with FoxConn China, investments in future 5G implementation, and dealing with the stupid costly factors like the China trade import tariffs, etc.
 

Dirtfarmer

macrumors regular
Jan 18, 2012
210
270
Ruh roh.

Not looking good Tim.

Better dig out that time machine and invent world-changing technologies starting ten years ago.

Oh, wait, you don't have a time machine.

This is why I think they should #FIRETHEACCOUNTANT
 

falainber

macrumors 68000
Mar 16, 2016
1,625
2,201
Wild West
Sure but two different business. Apple makes in a quarter what huawei makes in a year.
Only if "makes" here stands for profits (which is a correct use of the word). But it's not that simple. This quarter Huawei had US$58.26 B in revenues which is higher than Apple. If they reinvest the profits (and being a growth company, they do) this would lead to lower profits.
 
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now i see it

macrumors 601
Jan 2, 2002
4,010
8,013
so they raise the prices and we all have to pay for it, then they say they made the most money ever and we're supposed to be happy about that?

Basically they just stated that they've screwed over their customers once again and the future is looking bright
 

pacalis

macrumors 6502a
Oct 5, 2011
597
228
These results were much better than I was expecting. Competition is fierce in phone hardware, the market is saturated and Apple phones are seriously overpriced. A 12% decline is not as bad as it could be.

That said, I hope Apple will price the phones more competitively (saturated market) to increase platform adoption, which will translate to the services business. Tim Cook suffers seriously from MARGINITIS, but the services markets (new and growing) are a tremendous opportunity that is basically infinite. A short run margin hit, or even longer target margin adjustment, could be minor given the future income possible in services. However, that only works if a lot of people are on the platform.
 
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Baymowe335

macrumors 603
Oct 6, 2017
5,183
9,083
Services growth is misleading. Yes, it has grown 13% year-over-year. But services is supposed to be largely recurring revenue. Quarter-over-quarter, services was static at 0% change.

Hopefully, Apple will revitalize their internal services revenue (not third party apps subscription) with Apple TV+, Apple Arcade, and iCloud (which will offer folder sharing). I think the success depends on Apple offering a compelling bundle. I doubt meaningful number will pay significant sum for Apple TV+ and Apple Arcade individually.
Still a record and sequential quarters are hardly far enough to apart to see any real trend. I'm not sure how they account for services, but currency headwinds were strong too. It was 18% growth for services y/y in constant currency.
 

ipponrg

macrumors 68000
Oct 15, 2008
1,655
1,242
Here's the thing though, almost 75% of their business is based on one product line and it's supporting services. Remember Blackberry and Nokia.
Don't think Apple is going to fall as hard as Blackberry/Nokia did anytime soon. They are sitting on a massive cash pile.

Regardless, the people that should be thrilled by the numbers should be shareholders right now. Most shareholders, including myself, love the volatility of this stock.
 

Baymowe335

macrumors 603
Oct 6, 2017
5,183
9,083
Compare this to 23% revenue increase for Huawei and it becomes clear who has the momentum.
[doublepost=1564519563][/doublepost]

And the services is mostly app store fees and subscriptions and Apple Care. That's not going to explode any time soon (especially taking into account slowing iPhone sales)
It just hit a record despite those declining iPhone sales, which improved as well.

In constant currency, services were up 18% y/y. Currency headwinds are no joke because of the strong dollar. I think it was solid performance from services, although it could have been a bit stronger. The new iPhone should help.
 

pacalis

macrumors 6502a
Oct 5, 2011
597
228
Logic says that services would actually have higher profit margins than manufacturing and spending gazillions in R&D for iPhones/Mac/hardware. Let's realize that it costs Apple almost nothing to sell an iTunes gift card or Apple cash? They sell themselves. Apple doesn't have to pay for expensive factories to churn them out. Apple also doesn't need multi-million-dollar factories to sell those AppleCare+ warranties. They pretty much sell themselves also.

Services still do cost some money… for example, the cost of maintaining the cloud servers for iCloud, the cost of paying employees that operate the iTunes Store, the cost of negotiating contracts with third party content providers (e.g. the ones that produce music, movies, etc). But it's still not much compared to the billions and billions they have to invest in hardware R&D, investing in factories with FoxConn China, investments in future 5G implementation, and dealing with the stupid costly factors like the China trade import tariffs, etc.
It also depends how they recognize the revenue in service, particularly as they start financial services where the margins are thin, but a lot of money can be made.
 

BuddyTronic

macrumors 65816
Jul 11, 2008
1,121
738
Only if "makes" here stands for profits (which is a correct use of the word). But it's not that simple. This quarter Huawei had US$58.26 B in revenues which is higher than Apple. If they reinvest the profits (and being a growth company, they do) this would lead to lower profits.
I thought that Huwei number was for Q1 + Q2 right?

Check again. This is what I heard.
 
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