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

[Michael Scrip]

The iPhone installed base continues to grow. That’s why Apple is doing what it is. Even if consumers aren’t upgrading as often, the crux is that they will continue to use iPhones. Which makes them a prime target for accessories and services. The sales of which will go a long way towards offsetting declining iPhone revenue.

Unlike blackberry and Nokia, Apple has enough iOS devices in the wild to sustain its own ecosystem and I just don’t see Apple suffering the same fate as they did.

Exactly.

People are quick to say "Apple could be the next Nokia or Blackberry" without realizing what actually happened to those companies.

Nokia and Blackberry got their butts handed to them by two newcomers: Android and iOS. In other words... something better came along and replaced those two.

Do we expect the same thing to happen to iOS or Android, or both? Not bloody likely. It's been 12 years and no one has proven to be a credible threat. Microsoft were probably the only ones who could. And even they couldn't.

And even though the iOS installed base is still smaller than Android... it's waaay bigger than Nokia and Blackberry ever were... combined. We're talking about a billion Apple devices, y'all...

And people like their Apple devices.

So I'm not worried about Apple becoming the next Nokia or Blackberry.

Could Apple have some troubles in the future? Sure.

But I'm not expecting a Blackberry-level extinction.

 

[Rogifan]

No figures or color on Apple News+. Makes me think it’s been a dud so far. And did HomePod get mentioned at all?

 

[Eorlas]

They were never doomed but a 14% drop in profit YoY is not a good sign.

That company is hardly hurting at all, or in danger. Let's not talk like there's a major worry for apple when they're approaching $1 billion in profit per week of the year. This is very, very far away from being a problem at all.

 

[I7guy]

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.

How was Huawei phone division? Comparing the totality of Huawei against Apple is the same as comparing Exxon against GM. Apple’s (pun intended) to oranges.

 

[falainber]

How was Huawei phone division? Comparing the totality of Huawei against Apple is the same as comparing Exxon against GM. Apple’s (pun intended) to oranges.

Huawei actually reported their H1 results (they are not public so they probably do not report quarterly).
"Huawei said it shipped 118 million units of smartphone for the first half of 2019, resulting in a 24% on-year jump." So it looks like they are doing very well there. Even before this they surpassed Apple as the second largest smartphone company (by unit numbers).

 

[mikethemartian]

How do the revenue numbers compare once inflation is factored in?

 

[Pootie Tang]

How do the revenue numbers compare once inflation is factored in?

There is no inflation. The current annual inflation rate is 1.6%. That’s hardly anything to “factor in.”
https://www.usinflationcalculator.com/inflation/current-inflation-rates/

Apple spent over $17 billion on share buybacks of almost 88 million Apple shares, and Apple also paid out $3.6 billion in dividends and equivalents during the quarter.

 

[Iconoclysm]

Compare this to 23% revenue increase for Huawei and it becomes clear who has the momentum.
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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)

You try even close to 20% growth with these kind of numbers, it's next to impossible.

 

[LordVic]

Do we expect the same thing to happen to iOS or Android,

No, And there lies the risk.

BBRY and Nokia didn't expect Apple and Android either, until they manifested.

Not really arguing that Apple is in the same boat. There's really no evidence of that, Just kind of pointing out the incorrectness of the statement.

Tomorrow, someone could release something completely new and revolutionary (like the surprise the iPhone became) that eats Apple and Android for breakfast. We won't even know it till we see it.

This is why companies who get to the top, and start focusing on profit through minimizing costs and small revesions tend to get blindsided by upstarts who are trying to unseat them. Getting complacent and thinking there's no way you can be toppled so you can slow down innovating, is a great way of giving your competition time and space to surprise you.

That's what the biggest failing of BlackBerry was. Complacency of being at the top and thinking that being on the top automatically meant they were the best. Until someone else came along and did it better.

"we're the best because we make the most money" is a dangerous position to take.

 

[falainber]

You try even close to 20% growth with these kind of numbers, it's next to impossible.

Difficult but not impossible. Huawei is not that much smaller than Apple. Also, Amazon (about the same size by market capitalization and slightly bigger by revenues) just reported 20% y-o-y revenue growth.

 

[I7guy]

Huawei actually reported their H1 results (they are not public so they probably do not report quarterly).
"Huawei said it shipped 118 million units of smartphone for the first half of 2019, resulting in a 24% on-year jump." So it looks like they are doing very well there. Even before this they surpassed Apple as the second largest smartphone company (by unit numbers).

Right 24% means nothing, the same as Apple's reporting. However, how does this line-up in the same price point? Lower price point?
[doublepost=1564533842][/doublepost]

...
"we're the best because we make the most money" is a dangerous position to take.

We're the best, because we have high customer satisfaction, people love our products, we have a large and loyal following and our corporation has great corporate goodwill. As a consequence we make a lot of money. See the difference in this statement vs. "we're the best because we make the most money"?

 

[Pootie Tang]

Difficult but not impossible. Huawei is not that much smaller than Apple. Also, Amazon (about the same size by market capitalization and slightly bigger by revenues) just reported 20% y-o-y revenue growth.

Forbes lists Apple as the world’s most valuable brand at $206 billion. Huawei is number 97 at $108.9 billion.
https://www.forbes.com/powerful-brands/list/

 

[Moonlight]

Reading these comments is like listening to a hamster talk about the weather.

 

[StoneJack]

half of Apple is relying on iphone sales, not good.

Also, not sure to be impressed by iPad sales almost as much as Macs, or does that mean Macs are selling really bad.
I thought tablets were dying market.

well, obviously you were wrong

 

[chatin]

Reading these comments is like listening to a hamster talk about the weather.

No one seems to care Apple is under major profit pressure thus keeping prices higher than ever.

 

[StoneJack]

looks like the shift into services is doing it's job making up for declining volumes in sales.

that and higher prices to help makeup the difference.

Will be intriguing to see if service revenue can continue to go up if iphone sales continue to dip

as another interesting point, while revenues are up, margins shrank slightly and profit itself is down.

(not a complaint, just an observation).

Well, it is possible. Microsoft is transitioning to services company, after all. Profit down is largely attributed to Apple, spending few billions of revenue to buyback shares.

 

[MrSkoTA]

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’s not exactly hard to have bigger momentum when you are not on the top already! 23% growth of $1 is not very big. 23% of growth on $100B is HUGE and not sustainable. There isn’t that much money in the market to be given to a single company, let alone Apple who wants higher margins on better products.

You should learn math and business before making such silly comments because this comment clearly shows no clue was had before your 2 cent was given. When Huawei is as big as Apple and still doing 23% growth with the same margins as Apple, then some new people may start bowing to a new king. Not until then.

 

[Pootie Tang]

No one seems to care Apple is under major profit pressure thus keeping prices higher than ever.

I find it hard to believe that there is “...major profit pressure” when
“Apple’s cash hoard now at $225.4 billion”
https://www.cnbc.com/2019/04/30/apple-now-has-225-billion-cash-on-hand.html

 

[Baymowe335]

Huawei actually reported their H1 results (they are not public so they probably do not report quarterly).
"Huawei said it shipped 118 million units of smartphone for the first half of 2019, resulting in a 24% on-year jump." So it looks like they are doing very well there. Even before this they surpassed Apple as the second largest smartphone company (by unit numbers).

Check their profit margins. They will stop at nothing to increase the top line. That’s fine, but they are entirely different business than Apple. Apple is far more profitable.
[doublepost=1564539146][/doublepost]

Difficult but not impossible. Huawei is not that much smaller than Apple. Also, Amazon (about the same size by market capitalization and slightly bigger by revenues) just reported 20% y-o-y revenue growth.

Again, different business. Apple drawfs Amazon in profit. Amazon’s entire business is pushing sales.

 

[Baymowe335]

A year ago they had $11.9b in profit.

Profit fell 13% year over year.

Do you understand why or do you just keep posting the number you read on the NYTimes?

If you understood why, you would know gross margins were almost even, like revenue. There are many things under GM that impact net income.

 

[Squeak825]

If they put app store revenues and in app sales into that, it is capped at 30% less costs. They probably associate most server costs with this business segment, lowering it further.

I am 99% positive that Apple does not count the developers share of app sales in their revenue numbers -- only their cut.

 

[BuddyTronic]

They were never doomed but a 14% drop in profit YoY is not a good sign.

I think they paid down $4 billion or $5 billion in debt so stuff like that can reduce the bottom line profit number, and so can a dozen other things on the ledger.

All-time record revenue for this quarter. That’s a sign to notice.

 

[M5RahuL]

People still pitching that tired old joke?

Yup, and they’re usually one of the first to comment

 

[Virinprew]

How about making an interactive chart that can switch any product category to the bottom so we can see the change of that line? Mac has reached the steady state for a while now. It's not interesting. May be the services or the iPhone at the bottom?

 

[R.P.G]

$10 billion in profit. Does the company do any kind of profit sharing for it's employees?

why should they get share? they are getting salaries.

common folk who owns stocks gets paid..because they are investors.