Apple Reports Q4 2013 Year-End Results: $7.5 Billion Profit on $37.5 Billion in Revenue [Call Concluded]

[racer1441]

Don't bet more than you can afford to lose.

I don't really care. My opinion stands.

 

[IJ Reilly]

I don't really care. My opinion stands.

Since your name calling didn't work you'll just go for an opinion completely lacking in justification, and without responding to anything I said. Nice.

 

[9000]

You are applying logic to financial analysts that wouldn't be able to survive in any field other than the make believe world they live in.


I'm serious, put any of those mouth breathers on a farm, in a factory, or working at an office that isn't about pulling ideas out of their rear ends and they'd be starved out corpses in the ditch inside of a week.

Put you in Wall Street, and you'll lose all your money within a week. Get it?

 

[racer1441]

Put you in Wall Street, and you'll lose all your money within a week. Get it?

Haven't yet. Outside of the mutual fund for retirement, I just buy what I like and sell when it goes up.

It's not hard.

----------

Since your name calling didn't work you'll just go for an opinion completely lacking in justification, and without responding to anything I said. Nice.

Say something decent, and I'll give a informed response. The point stands. We have a whole group of people in society who's only job is to make guesses on things they know little about. These people cannot contribute to society in any way, just like politicians!

 

[9000]

So why is Apple down 2% after hours?

The article never mentioned expectations, which are mostly what matters. But they're up at this point, right?

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Say something decent, and I'll give a informed response. The point stands. We have a whole group of people in society who's only job is to make guesses on things they know little about. These people cannot contribute to society in any way, just like politicians!

Investors provide capital for public corporations or governments. If they didn't matter, corporations would all be private, and the government would not issue bonds.

 

[KPOM]

Even after the profit taking, stock is still above Oct 18th price.

True. Also, the stock recovered about half its after-market losses after Tim Cook's comments. Contrast that with this past April when the stock kept on losing the longer Cook spoke.

Apple all but confirmed that the Retina iPad Mini will be in tight supply, that the 5c isn't a "failure," and that new products are still on the way.

 

[Michael CM1]

Know what those numbers say? All the people yammering about how Apple is in trouble unless a larger iPhone is made can Argo **** themselves. Maybe larger phones are good, maybe they're bad. All I know is THAT'S AN AWFUL LOT OF RED IN AN $8 BILLION PIE.

 

[Xiroteus]

Why are iPod sales so low nowadays.

I imagine because of all the phones. I would still think the touch would do okay because it can do a lot aside from being a phone. If I wanted just a music player I would go find a iPod Nano 5th Gen because that was the last one that looked good.

 

[IJ Reilly]

Say something decent, and I'll give a informed response. The point stands. We have a whole group of people in society who's only job is to make guesses on things they know little about. These people cannot contribute to society in any way, just like politicians!

You wouldn't know something decent if it flew up your nose.

----------

True. Also, the stock recovered about half its after-market losses after Tim Cook's comments. Contrast that with this past April when the stock kept on losing the longer Cook spoke.

Apple all but confirmed that the Retina iPad Mini will be in tight supply, that the 5c isn't a "failure," and that new products are still on the way.

It never fails to amaze me when investors seem to be surprised when Apple indicates that they will actually be releasing new products, as if maybe they might have suddenly decided to go into some other business.

 

[bmunge]

150 million iPhones sold in the last year. Microsoft CEO ousted.

Not what Balmer would have expected six years ago.

Thanks for the perspective. It's truly amazing what has occurred in the tech world the past 6 years because of Apple. This has been a revolution on the same level as the beginning of the Internet and the dot com boom.

 

[asiga]

For all of those above glowing about Apple's 2013 performance, you do realize that the actual Net Profit for the full year 2013 was DOWN over 16% vs the 2012 full year, with significantly declining net margin to revenue % as well. Right?

Every news can be told in a positive or negative focus. On Apple rumors and fan sites, they tell the good numbers, so no wonder users feel shocked about the stock.

But in the rest of the press, the focus is on the severe decline in profits, so no wonder about the stock decline either.

Depending if you read the good or the bad numbers, you can understand what happened.

 

[Macist]

It's actually quite worrying that iPhone makes up over 50% of revenues.

The mobile market moves so fast it only needs the 'next big thing' to put a big dent in those sales and Apple could lose a lot of money fast. Can you say Nokia? Blackberry?

Mobile phones are little more than frivolous bling to many consumers, while a computer platform like the Mac is a long term investment where people are less likely to switch willy-nilly.

 

[Winni]

What kind of excuse will the hayters say now?

I bet they are inwardly squirming.



BTW, where does the iPod Touch fit in the graph?
iPod is tiny, seems too small a % to go there.

If you put down the pink glasses that make the world appear so lovely, the numbers actually say that the gold rush is reaching an end. Three quarters in a row now the net profit shrank significantly - I guess that is what Wall Street didn't like.

The cash cow is the iPhone while the iPad stagnates (read: tablet market saturation, and, let's face it, only minor evolutionary upgrades between product cycles - there's no need to buy new products anymore).

Mac sales have also slowed down, maybe because people were waiting for new models, maybe because they realized that "not everybody needs a truck" and that they're simply happy with what they bought a couple of years ago because it can still handle whatever they throw at it.

It shouldn't be surprising that the iPod is on its way out: People buy smartphones or tablets, nobody needs pure mp3 players anymore that cost as much as a mid-range smartphone.

Yes, they are extremely profitable. But they soon need the next big thing if they want to stay on top of the game.

The actual numbers in a more sober table:

1/09 * 11.880 Mio. 2.255 Mio.
2/09 * 9.084 Mio. 1.620 Mio.
3/09 * 9.734 Mio. 1.828 Mio.
4/09 * 12.207 Mio. 2.532 Mio.
1/10 15.683 Mio. 3.378 Mio.
2/10 13.499 Mio. 3.074 Mio.
3/10 15.700 Mio. 3.253 Mio.
4/10 20.343 Mio. 4.308 Mio.
1/11 26.741 Mio. 6.004 Mio.
2/11 24.667 Mio. 5.987 Mio.
3/11 28.571 Mio. 7.308 Mio.
4/11 28.270 Mio. 6.623 Mio.
1/12 46.330 Mio. 13.060 Mio.
2/12 39.168 Mio. 11.622 Mio.
3/12 35.023 Mio. 8.824 Mio.
4/12 35.966 Mio. 8.223 Mio.
1/13 54.512 Mio. 13.080 Mio.
2/13 43.603 Mio. 9.547 Mio.
3/13 35.323 Mio. 6.900 Mio.
4/13 37.472 Mio. 7.512 Mio.

----------

It's actually quite worrying that iPhone makes up over 50% of revenues.

The mobile market moves so fast it only needs the 'next big thing' to put a big dent in those sales and Apple could lose a lot of money fast. Can you say Nokia? Blackberry?

Mobile phones are little more than frivolous bling to many consumers, while a computer platform like the Mac is a long term investment where people are less likely to switch willy-nilly.

You are absolutely right. The problem is that Apple killed their own Mac market with the iPad, and they never managed to get a foot in the enterprise and business market. Apple does not have one single product for the business sector - they're a consumer brand.

Their strategy is to put an iPhone and an iPad into everybody's hands and then lock the user into the iCloud and iTunes ecosystem. Except for software developers, where is the Mac in that picture? What would anybody need it for?

The bigger problem for Apple: How is that strategy scalable? If they want to win the battle about the living room, they have to come up with a bit more than just an iPad and an iCloud. Where's their Xbox or PlayStation? Where's the TV? Where's the universal remote control for everything (the Xbox One has it)? Where is the full integration into OTHER home devices? Where are their wearables (e.g. watch, glasses)?

Trends can be over abruptly. Like you said: Look at Nokia or RIM. Heck, look at the Apple II and the Mac when the PC and Windows came out.

 

[olowott]

Rock on!

 

[Merkie]

I think it's Apple's own fault the iPod line is dying. The iPod Nano and iPod Touch haven't been updated for 2013, the iPod Classic is the same from 2009, and the iPod Shuffle is a $49 music player that nobody wants to buy.

They could easily reinnovate the whole line up, and bring some excitement back to the iPod. The watch-like Nano was very exciting for so many people, with customizable clocks and so many 3rd party watch accessories; the clip had endless possibilities, unlike the new Nano which has limited capabilities plus no one is going to watch video on a 2.4" screen. They could've introduced new size screens to the iPod Touch like a 5" or even a 6" iPod Touch that is perfect for consuming media in 16:9, because the iPod Touch doesn't need to be a one-handed device like the iPhone. For the love of God, Apple, please update the iPod Classic; updated design, 128GB or 256GB SSD storage, because there is still a market out there for people who still demand big portable storage for their music. Apple can do so many things with its iPods, but they're just lazy to do anything about it.

Don't blame the market for the lack of interest in iPod. Apple has clearly shown to their consumers that they don't care about its music devices anymore. Yes, the world has shifted for integrated devices with music and streaming services, but there is still a world for people who want cool NEW iPods and massive storage.

You are right, but the iPod is a product in a product category that is not going to exist anymore in a few years.

Let us define what an iPod is: it's a product for mobile consumption of digital information (be it audio, video or text). It was a great product 10 years ago when the digital media age was rapidly expanding and the iPod greatly served in that area.

However, nowadays consumption of digital media isn't new anymore. It's not exciting. It's become a commodity, and because it's a commodity, other product categories are more and more stealing the iPod's thunder. First it was the smartphone, then tablets, and in a few years time electronic wearables will make the iPod obsolete (smart watch, Google Glass).

The iPod will not die, because there will always be a specific group of customers who like a small and portable iOS device that is cheap and can be used for watching video and listening to music, but the general public will not need it. You can even see it now: who's using the iPod? I think it's mostly kids who don't own a smartphone yet, or people who don't have high end smartphones. But today's high-end smartphone is tomorrow's low-end smartphone, so that group of people is quickly shrinking as well.

A 6" screen or 128GB SSD isn't going to solve this, though I'm sure there are people who want to buy it and I'm pretty sure Apple would be able to make some money out of it is as well.

 

[unlinked]

It's actually quite worrying that iPhone makes up over 50% of revenues.

The mobile market moves so fast it only needs the 'next big thing' to put a big dent in those sales and Apple could lose a lot of money fast. Can you say Nokia? Blackberry?

Mobile phones are little more than frivolous bling to many consumers, while a computer platform like the Mac is a long term investment where people are less likely to switch willy-nilly.

I don't think people switch mobile OS willy nilly. Blackberry has been in free fall for years and they still have not hit rock bottom.

Most everything else is down year on year so it was strong phone sales that kept things reasonable.

ipad -13%
mac -15%
ipod -40%

I wish the information was released in more usable amounts. You really need 6 or 8 quarters of data with the important releases highlighted to understand what it means.

 

[BaldiMac]

The cash cow is the iPhone while the iPad stagnates (read: tablet market saturation, and, let's face it, only minor evolutionary upgrades between product cycles - there's no need to buy new products anymore).

Or Apple changed their product cycle with the iPad making YOY comparisons tricky.

Mac sales have also slowed down, maybe because people were waiting for new models, maybe because they realized that "not everybody needs a truck" and that they're simply happy with what they bought a couple of years ago because it can still handle whatever they throw at it.

Of course, Macs have increased their market share 29 out of the last 30 quarters.

0Yes, they are extremely profitable. But they soon need the next big thing if they want to stay on top of the game.

Yep. That's pretty obvious for any tech company though.

The actual numbers in a more sober table:

1/09 * 11.880 Mio. 2.255 Mio.
2/09 * 9.084 Mio. 1.620 Mio.
3/09 * 9.734 Mio. 1.828 Mio.
4/09 * 12.207 Mio. 2.532 Mio.
1/10 15.683 Mio. 3.378 Mio.
2/10 13.499 Mio. 3.074 Mio.
3/10 15.700 Mio. 3.253 Mio.
4/10 20.343 Mio. 4.308 Mio.
1/11 26.741 Mio. 6.004 Mio.
2/11 24.667 Mio. 5.987 Mio.
3/11 28.571 Mio. 7.308 Mio.
4/11 28.270 Mio. 6.623 Mio.
1/12 46.330 Mio. 13.060 Mio.
2/12 39.168 Mio. 11.622 Mio.
3/12 35.023 Mio. 8.824 Mio.
4/12 35.966 Mio. 8.223 Mio.
1/13 54.512 Mio. 13.080 Mio.
2/13 43.603 Mio. 9.547 Mio.
3/13 35.323 Mio. 6.900 Mio.
4/13 37.472 Mio. 7.512 Mio.

Somehow, that's sobering to you.

You are absolutely right. The problem is that Apple killed their own Mac market with the iPad, and they never managed to get a foot in the enterprise and business market. Apple does not have one single product for the business sector - they're a consumer brand.

Maybe if you ignore mobile.

http://www.slashgear.com/ios-is-more-popular-than-android-for-businesses-using-custom-apps-18302021/
http://appleinsider.com/articles/13...th-72-mobile-devices-90-of-tablets-95-of-apps

Their strategy is to put an iPhone and an iPad into everybody's hands and then lock the user into the iCloud and iTunes ecosystem. Except for software developers, where is the Mac in that picture? What would anybody need it for?

So... you made up a strategy that purposely ignored the Mac to prove your point.

 

[PracticalMac]

The actual numbers in a more sober table:

1/09 * 11.880 Mio. 2.255 Mio.
2/09 * 9.084 Mio. 1.620 Mio.
3/09 * 9.734 Mio. 1.828 Mio.
4/09 * 12.207 Mio. 2.532 Mio.
1/10 15.683 Mio. 3.378 Mio.
2/10 13.499 Mio. 3.074 Mio.
3/10 15.700 Mio. 3.253 Mio.
4/10 20.343 Mio. 4.308 Mio.
1/11 26.741 Mio. 6.004 Mio.
2/11 24.667 Mio. 5.987 Mio.
3/11 28.571 Mio. 7.308 Mio.
4/11 28.270 Mio. 6.623 Mio.
1/12 46.330 Mio. 13.060 Mio.
2/12 39.168 Mio. 11.622 Mio.
3/12 35.023 Mio. 8.824 Mio.
4/12 35.966 Mio. 8.223 Mio.
1/13 54.512 Mio. 13.080 Mio.
2/13 43.603 Mio. 9.547 Mio.
3/13 35.323 Mio. 6.900 Mio.
4/13 37.472 Mio. 7.512 Mio.

----------



You are absolutely right. The problem is that Apple killed their own Mac market with the iPad, and they never managed to get a foot in the enterprise and business market. Apple does not have one single product for the business sector - they're a consumer brand.

Their strategy is to put an iPhone and an iPad into everybody's hands and then lock the user into the iCloud and iTunes ecosystem. Except for software developers, where is the Mac in that picture? What would anybody need it for?

The bigger problem for Apple: How is that strategy scalable? If they want to win the battle about the living room, they have to come up with a bit more than just an iPad and an iCloud. Where's their Xbox or PlayStation? Where's the TV? Where's the universal remote control for everything (the Xbox One has it)? Where is the full integration into OTHER home devices? Where are their wearables (e.g. watch, glasses)?

Trends can be over abruptly. Like you said: Look at Nokia or RIM. Heck, look at the Apple II and the Mac when the PC and Windows came out.

I do not see the numbers as sober at all!
Yes, the margins are not as high as past, but they are still strong.

The iPhone and iPad has put Apple in the front seat when it comes to business, and they are in contention with MS to take the drivers seat.

The new iPhone 5S and iPad's are revolutionary with its 64bit chip. Sure one will not see the big deal now, but in a few months the advantage will be clear.

What I do agree is the slow down in purchasing, mainly from much stronger competition and Apples refusal to play in the mud with very low (or no) margin products. If the AppleTV was sold for $50, it would easily pay for itself in iTunes usage.

I also think Apple can afford to take risks, such as above.

 

[BaldiMac]

How many analysts and forum posters are going to completely ignore that Apple will be deferring $900 million in additional revenue in the December quarter as a result of making OS X, iWork, and iLife free? Almost all the comments on forward guidance are ignoring this already.

 

[cwt1nospam]

Anyone else notice that Macs account for 15% of sales? Apple is not even close to being a computer company any more. Even if you throw in the 17% for iPads computers are only 32%, or 1/3 of revenue.

Somebody hasn't noticed that the iPhone is a computer. It just happens to have a phone attached to it.

 

[IJ Reilly]

How many analysts and forum posters are going to completely ignore that Apple will be deferring $900 million in additional revenue in the December quarter as a result of making OS X, iWork, and iLife free? Almost all the comments on forward guidance are ignoring this already.

Deferring doesn't mean the money will go off the books, but will be booked incrementally. The implications to the bottom line, if any, aren't clear.

 

[BaldiMac]

Deferring doesn't mean the money will go off the books, but will be booked incrementally. The implications to the bottom line, if any, aren't clear.

I'm not sure what you are implying here. Deferring $900 million in revenue from the December quarter will directly impact revenue and margins for that quarter.

My point was that there are going to be a lot of people that don't take the deferment into account when making YOY comparisons when next quarter's results are released.

For example, there are several analysts that have commented on Apple's guidance for gross margins as being relatively flat quarter to quarter. However, if you included the deferred revenue, margins actually increase significantly from 37% to close to 39%.

 

[cwt1nospam]

You are absolutely right. The problem is that Apple killed their own Mac market with the iPad, and they never managed to get a foot in the enterprise and business market. Apple does not have one single product for the business sector - they're a consumer brand.

This boggles the mind. The business sector is where profits (and computer makers) go to die. Don't believe me? Ask the folks at Wang, DEC, IBM, Compaq, and now Dell and HP, both of whom are trying desperately to get out of the PC hardware business. Unless you think 3% profit margins are great, stay away from the enterprise.

 

[IJ Reilly]

I'm not sure what you are implying here. Deferring $900 million in revenue from the December quarter will directly impact revenue and margins for that quarter.

My point was that there are going to be a lot of people that don't take the deferment into account when making YOY comparisons when next quarter's results are released.

For example, there are several analysts that have commented on Apple's guidance for gross margins as being relatively flat quarter to quarter. However, if you included the deferred revenue, margins actually increase significantly from 37% to close to 39%.

I'm sure Apple will make that point again in three months. In terms of what the deferral means beyond the next quarter I am not certain, but I don't think it means that the $900 million will go missing entirely as I don't believe it represents lost revenue. Correct me if I am wrong.

 

[BaldiMac]

I'm sure Apple will make that point again in three months.

Absolutely. I'm just guessing that a lot of people will ignore it.

In terms of what the deferral means beyond the next quarter I am not certain, but I don't think it means that the $900 million will go missing entirely as I don't believe it represents lost revenue.

The deferred revenue will be split over subsequent quarters based on which product generated the revenue. Deferred revenue from iOS devices will be split over 2 years and deferred revenue from Macs will be split over 4 years.