Apple Reports Record Earnings and iPhone Sales: $18B Profit on $74.6B in Revenue for Q1 2015

[percius1001]

ERM You missed something!

So, I 've said this before, but I think it is worth repeating
___________________________________________________________

I think this is a very clear cut example of Tim Cooks Apple researching and then following market demand and trends to maximize profits and increase market share for the iphone. What it does not do though, is follow the pioneering spirit and vision which was Steve Jobs to make products that were innovative, cutting edge, inventive, and above all...ones that took a chance and were the stuff of imagination. I think that the average person can see the total different direction under two different CEO's. It may not necessarily be a bad thing, especially for the profits of Apple, but I think that people who try and make the case that this company has any soul of what it once was, is lying to themselves and us. Apple is now officially a "me-too" bandwagon company that makes very refined products that its core audience and followers will of course, embrace. Nothing less, and certainly nothing more now.


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You say all this but perhaps you were not on Planet Earth when Apple announced the new Mac Pro and even the most die hard Android fan will have to admit it is an amazing piece of design and engineering. Just because Apple finally made 2 iPhones with bigger screens does not mean they are jumping on any bandwagon. They simply decided to finally give customers what they want rather than continue to ignore them. Samsung and others have done similar things. Giving customers what they want. Did not mean they were jumping on bandwagons either.
Or how about the Apple Watch which by the way has been in preparation for quite some time, before Samsung bought out the Galaxy Gear.
Everybody knows that Samsung panicked some what and hastily bought out the Galaxy Gear quickly to combat what they thought or knew about the Apple Watch(rumoured watch).
You can not bring out world changing and breath taking devices every day just to please people like you who i suspect in my opinion are never pleased and always disappointed.

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but, but, but, Android is winning! Google is teh open! Open always winz!!!

You say Open is good. Consider this then. Would you leave your front door open all the time? No! Why not? Is it because Open mean that your home would be invaded by Thieves and c
Criminals and by people seeking to do damage. Would it also be because you wish to protect not only your home and it's valuables but also the people who live there?
Yes open is a good idea but only and I mean ONLY if you can ACTUALLY code to a high enough degree(being good at playing the late call of Duty etc does not make you good at coding) that enables you to code your own updates and make any changes to the software you wish.
Problem with Android(1 amongst many) is that because it is open many Phone Manufacturers who make Android phones ship them with versions of Android that are different to one another according to how that manufacturer thinks Android should be rather than how it should be.
99.99% of smartphone customers can not code and have neither the ability or the time to. So closed works, closed is safer and easier.
Closed wins!

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I'm concerned about the fact that the iPhone makes up nearly 70% of Apple's revenue. If somebody makes a better phone, Apple crashes. I know that's unlikely given that people have been trying quite hard even since the first iPhone and haven't managed it yet, but still, talk about putting all your eggs in one basket.

I hear you and to a degree I can see what you mean but the iPhone is too well established. it would be like saying Coca Cola will disappear if they stop selling lots of Cokes.

Apple has so much cash reserves that even if sales of every iPhone they sell were to decline by 50% each year they would still function as a company for some time to come.
They will not go away for many years to come, decades even.
They are too good at making money and selling devices.
Ys they may get more money from selling iPhones but that has something to do with the fact that people are likely to upgrade their Phones more often than a Macbook or iPad even. Plus is a bit cheaper. I love MacBooks but they are far too expensive.

 

[wolfie]

What you quoted (second quote) was sarcasm man.

 

[percius1001]

Your so correct

Dude, they just sold a record number of iPhones - a record by a considerable margin.

I don't think they need to worry about their iPhone business suddenly shutting down. Remember, what you think is a "better phone" and what I think is a "better phone" could be two completely different things.

As far as marketing and brand loyalty goes, Apple is second to none in the smartphone industry. I think they'll be ok.

And besides, where else is the smartphone going to go? It's a maturing industry. There aren't many more breakthroughs to be made. What COULD hurt Apple is being slow to move into new areas as their cash cow matures.

We're just now entering into that maturity and it'll be a while before the industry starts the decline. Apple has the Apple Watch, new iPads and MacBooks and lord knows what else on the horizon.

I totally agree with you mate. Plus also let us not forget the fact that as I said to another post with all the cash reserves Apple has they could take a 50% decline in sales of all iPhone every year and still function as a company for some years to come. Regarding the iPhone and smartphone market in a whole. Apple only has to make each new iPhone better than the previous and good enough to tempt the now millions and millions of iPhone owners to upgrade. For example the iPhone 5s has the Touch id sensor which was good enough I say to get iPhone owners(and some non iPhone owners) to upgrade whether or not the rest of the phone was WOW.

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I will still stick to what I said some time ago.

As years go by, it's going to be harder and harder and harder for anyone to justify high priced phones and tablets.

Less expensive models from other brands will get better and better, year after year, closing the gap between low end and high end.

You only have to look now.

iPad from 5 years ago against some other cheap tablet around that time, the cheap one was utter garbage.

Same with phones.

5 years on, and 5 years is nothing.
You can get some amazing phones and tablets, far far better than Apple's product were 5 years ago. But for a fraction of Apples prices today.

This won't stop.

Apple, and other will hit technical walls, and year after year, Apple's next model's improvement over the previous model will get less and less.

At the same time the cheap models will get closer and closer.

More and more people will realise, hey, this cheap model is amazing.
It's 95% as good as, say Apple's model for 1/4 the price.

It's inevitable this will happen.

Just with DVD Players, Microwaves, Washing machines, Laser Printers, there will always be a market for the very high end items at very high end prices. But that market will shrink and shrink and shrink, as more and more people realise the cheaper models are by then really good and so much less expensive.

I agree with you, but only to a point. What you don't say is that you also get what you pay for. I have bought items like DVD players that were cheaper than the expensive high end ones and just as good but with some items you can get quality that is good but with most the quality tends to be good enough. With companies like Apple you get quality that is extremely high.
For example I bought my first iPhone the iPhone 4s not because of any tech specs(you should never EVER do that because if you do you will tend to always be disappointed when another better phone comes out) but because of the feature of a very safe app store and closed eco system.
So while many people buy things like cars such as a Ford Focus because you get features and specs that are as good as say a high end Bmw or Mercedes Benz you don't get the sort of quality you get with , say a Bentley.

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Easy, if they lose future opportunities for income. It is possible for a company's value to be less than the amount of cash it holds.

Yes but if they have more than $150 billion in the 'Bank' then even if the value of the firm drops(not likely with that sort of money in the bank and the sales figures they regularly get)they can afford to take sales losses for a long long long time before the firm crashes

 

[s2mikey]

It's called wages and benefits and stock options. They do.

Do you want to share your wealth with me? Please?

Yeah, dirt cheap wages and lousy benefits along with horrible working conditions. Excellent. Gimme a break. Maybe the software guys here do OK but the folks making this stuff are exploited. Do you ever watch the news?

It's amazing the negative spin on such positive news. Maybe you'd be happier if Apple declared backruptcy and the US lost a couple of hundred thousand jobs in the economy?

Why does it have to be completely the other way and so brutal? Can't they make a few billion less and pay people here good wages and benefits? Gosh.... As soon as anyone discusses some reasonable profit sharing and good jobs in the USA, the Ayn Rand chest thumpers have a hissy fit. My goodness.

 

[Mildredop]

It's amazing the negative spin on such positive news. Maybe you'd be happier if Apple declared backruptcy and the US lost a couple of hundred thousand jobs in the economy?

I would.

 

[firewood]

china does this now, you have to pay a percentage of your salary.

Not enough to prevent China from recently minting as many or more Billionaires (even many who aren't the kids of party leaders) than in the U.S.

And Gates and Buffet are probably doing more with their Billions in profits in helping reduce death and disease due to world poverty than most Western governments with their tax expenditures.

So minting Billionaires (with their billion dollar corporate profits) isn't always bad for mankind.

If you think some company is minting "excessive" profits, just buy some stock, and if you get any capital gains and dividends, contribute it to your favorite charity, sending the profits to where you think the money should go. No need to wait for any government force.

 

[IJ Reilly]

Not enough to prevent China from recently minting as many or more Billionaires (even many who aren't the kids of party leaders) than in the U.S.

And Gates and Buffet are probably doing more with their Billions in profits in helping reduce death and disease due to world poverty than most Western governments with their tax expenditures.

So minting Billionaires (with their billion dollar corporate profits) isn't always bad for mankind.

If you think some company is minting "excessive" profits, just buy some stock, and if you get any capital gains and dividends, contribute it to your favorite charity, sending the profits to where you think the money should go. No need to wait for any government force.

Seems kind of confused to me. The value of individual investing, and the massive wage and net worth inequities building around the world, are not really connected.

 

[I7guy]

I would.

That explains it. Not happening however.

 

[firewood]

Seems kind of confused to me. The value of individual investing, and the massive wage and net worth inequities building around the world, are not really connected.

That's an interesting hypothesis.

More likely, in any highly complex connected system, such fat-tailed extreme outcomes should be occasionally expected. Historically, those who think they can completely disconnect or greatly simplify an economic system have often ended up with far worse outcomes (North Korea, etc.) for most everybody.

I think it's nice that currently the most extreme outlier is a tech company and not another oil/gas related one.

 

[IJ Reilly]

That's an interesting hypothesis.

More likely, in any highly complex connected system, such fat-tailed extreme outcomes should be occasionally expected. Historically, those who think they can completely disconnect or greatly simplify an economic system have often ended up with far worse outcomes (North Korea, etc.) for most everybody.

I think it's nice that currently the most extreme outlier is a tech company and not another oil/gas related one.

It isn't a hypothesis. Your response seems to have no connection to my point, which is that a wage and tax system biased towards promoting wealth concentration, will, strangely enough, result in wealth concentration. Trying to bring North Korea into this is a bit odd, to say the least. Again, no connection to investing as a value, not in the least.

 

[firewood]

Again, no connection to investing as a value, not in the least.

Individual investing has little value unless those who invest have the possibility of a more positive outcome than those who don't bother to invest at all. One possible positive outcome from investment is a reasonable probability of ending up with change in wealth concentration towards the investor.

There's either a connection, or else there is little incentive. Why bother investing?

Then system complexity takes over and allows a few extreme outcomes.

 

[dampfnudel]

Apple needs to sell more iPads and MacBooks. I wonder what they have up their sleeves in 2015 to make that happen.

 

[IJ Reilly]

Individual investing has little value unless those who invest have the possibility of a more positive outcome than those who don't bother to invest at all. One possible positive outcome from investment is a reasonable probability of ending up with change in wealth concentration towards the investor.

There's either a connection, or else there is little incentive. Why bother investing?

Then system complexity takes over and allows a few extreme outcomes.

Those who invest will always have the possibility of a more positive outcome than those who don't invest, assuming they do it wisely. This was true long before we decided that a progressively larger share of the national wealth should be increasingly distributed to a smaller percentage of the nation.

 

[johnnyturbouk]

So, I 've said this before, but I think it is worth repeating
___________________________________________________________

I think this is a very clear cut example of Tim Cooks Apple researching and then following market demand and trends to maximize profits and increase market share for the iphone. What it does not do though, is follow the pioneering spirit and vision which was Steve Jobs to make products that were innovative, cutting edge, inventive, and above all...ones that took a chance and were the stuff of imagination. I think that the average person can see the total different direction under two different CEO's. It may not necessarily be a bad thing, especially for the profits of Apple, but I think that people who try and make the case that this company has any soul of what it once was, is lying to themselves and us. Apple is now officially a "me-too" bandwagon company that makes very refined products that its core audience and followers will of course, embrace. Nothing less, and certainly nothing more now.


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whilst i agree you raise many valid points, apple has matured as a company, and thus the direction of the company has changed, c.f. google, as another example.

We all know what Samsung are doing right now. Pooing their pants!

they were already pooing their pants, now they are getting the industrial level nappies out.

It's been really cool to see this company flourish in the technology market. Proud one of the most successful technology companies is American

agreed, one of the most successful corporations ever.

iPhone: 51M year ago, 74.5M this quarter (67M expected)
iPad: 26M year ago, 21.4M this quarter (21M expected)
Mac: 4.8M year ago, 5.5M this quarter (5.5M expected)

Revenue: $57.6B year ago, $74.6B this quarter ($68.7B expected)
Profit: $13.1B year ago, $18B this quarter ($15.7B expected)

iPads continue to disappoint.

I have said this many times, as it currently stands, forsaking mac for ipad development is a mistake. I hope apple continue to cater for their core mac customers.

Uh, the remaining 30% is 22.38 billion dollars. There are CEOs that would sell at least one of their kidneys for those kind of numbers.

Probably both kidneys!

 

[Keirasplace]

If no one does baseline research then products can't be made to make money. The research is the other side of the money making product coin.

Google is not really doing baseline, basic research; not even close. More like Skunkwork research, one would do with a big pile of scientific American magazines on the side for inspiration in a big ass garage.

Most of the thing they dabble into is not at the limit of tech at all. Many others have done driverless cars, VR headsets, etc.

They just look very unfocused. Good that they have the money to dabble. But, doing this can be dangerous long term. Even IBM, which has been a patent generating machine for decades, has always been more focused than Google.

If it wasn't for brand inertia, Google would be in trouble even in their core domain of searches (and ads). They're not really ahead in a really significant way.

 

[firewood]

Those who invest will always have the possibility of a more positive outcome than those who don't invest, assuming they do it wisely. This was true long before we decided that a progressively larger share of the national wealth should be increasingly distributed to a smaller percentage of the nation.

Who is this "we" and when did they make such an explicit decision?

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I have said this many times, as it currently stands, forsaking mac for ipad development is a mistake.

Most CEOs would love to make a "mistake" that brings in almost 4X more revenue than the Mac does. iPad sales could crash downward by more than 50%, and still bring in tons more cash than the Mac.

 

[Rocketman]

Yeah, dirt cheap wages and lousy benefits along with horrible working conditions. Excellent. Gimme a break. Maybe the software guys here do OK but the folks making this stuff are exploited. Do you ever watch the news?

When you compare workers in China and Malaysia to here they have more harsh conditions. But also consider Apple is probably the very best employer they have ever had in terms of working conditions, employee respect, wages and opportunity for continued employment.

Besides, technically they are employees of subcontractors for Apple and those contractors other customers don't give a hoot about working conditions like Apple tries to actually do.

Even in the USA they employ people in expensive cities like Cupertino, Austin, etc. You are far too judgmental for actual reality as it exists. Besides I would like to see you employ somebody, anybody, and still feel that way. I know.

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Those who invest will always have the possibility of a more positive outcome than those who don't invest, assuming they do it wisely. This was true long before we decided that a progressively larger share of the national wealth should be increasingly distributed to a smaller percentage of the nation.

Technically it is not national wealth, but a collection of individual wealth(s). Those individuals are acting in their own interest trying to earn money, avoid taxation to a tiny degree, and donating to charity at a rate about double the next highest country.

National wealth is a concept, not a practical reality. Individuals are what this country is about. "We the people".

Practically our national wealth is negative. The obligations of governments, largely to overpromises for pensions and benefits and services it can in no way pay for, or tax for, vastly exceeds the actual assets they own or incomes they can tap. Our national wealth is negative.

 

[IJ Reilly]

Who is this "we" and when did they make such an explicit decision?

We, meaning the Congress of the United States. These tax policies were implemented during the 1980s, redoubled during the 1990s, and held to firmly ever since. Am I seriously telling you something you didn't already know?

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Technically it is not national wealth, but a collection of individual wealth(s). Those individuals are acting in their own interest trying to earn money, avoid taxation to a tiny degree, and donating to charity at a rate about double the next highest country.

National wealth is a concept, not a practical reality. Individuals are what this country is about. "We the people".

Practically our national wealth is negative. The obligations of governments, largely to overpromises for pensions and benefits and services it can in no way pay for, or tax for, vastly exceeds the actual assets they own or incomes they can tap. Our national wealth is negative.

Technically is a technicality. Tax policy actually matters and produces actual results. If that was not the case then Washington would not spend so much time fighting over who pays how much in taxes.

 

[rmsanger]

When you compare workers in China and Malaysia to here they have more harsh conditions. But also consider Apple is probably the very best employer they have ever had in terms of working conditions, employee respect, wages and opportunity for continued employment.

Besides, technically they are employees of subcontractors for Apple and those contractors other customers don't give a hoot about working conditions like Apple tries to actually do.

Even in the USA they employ people in expensive cities like Cupertino, Austin, etc. You are far too judgmental for actual reality as it exists. Besides I would like to see you employ somebody, anybody, and still feel that way. I know.

The competitive advantage due to wages and working conditions is narrowing every day. Many companies are seeing huge wage inflation in India, China, Singapore, Malaysia, and the rest of ASEAN. The significant cost benefit that once was has equalized when netting taxes, duties, and shipping charges.

The scary part is that labor productivity is improving in those countries through competition which offsets part of the cost inflation.

 

[Rocketman]

The competitive advantage due to wages and working conditions is narrowing every day. Many companies are seeing huge wage inflation in India, China, Singapore, Malaysia, and the rest of ASEAN. The significant cost benefit that once was has equalized when netting taxes, duties, and shipping charges.

The scary part is that labor productivity is improving in those countries through competition which offsets part of the cost inflation.

I actually agree. Hence why globalization [Clinton] was a bad idea to begin with!!

 

[I7guy]

Yeah, dirt cheap wages and lousy benefits along with horrible working conditions. Excellent. Gimme a break. Maybe the software guys here do OK but the folks making this stuff are exploited. Do you ever watch the news?



Why does it have to be completely the other way and so brutal? Can't they make a few billion less and pay people here good wages and benefits? Gosh.... As soon as anyone discusses some reasonable profit sharing and good jobs in the USA, the Ayn Rand chest thumpers have a hissy fit. My goodness.

I have no clue about benefits or wages that apple pays or how it handles its' sub-contracting business; certainly the appear to care about working conditions in its' offshore suppliers by what has been in the press. My comment was in regards to what appears to be a resentment apples success and think somehow the world is magically entitled to apples piece of the pie. (some might call it wealth redistribution) I'm sure apple has generous philanthropic programs, most companies do and a lot of highly-paid execs also have personal philanthropy programs.

Apples compensation programs really have no place in these discussions as we are discussing revenue with respect to it's product lines. The other discussions probably more appropriately belong in PRSI.

 

[TallManNY]

I hear you and to a degree I can see what you mean but the iPhone is too well established. it would be like saying Coca Cola will disappear if they stop selling lots of Cokes.

Apple has so much cash reserves that even if sales of every iPhone they sell were to decline by 50% each year they would still function as a company for some time to come.
They will not go away for many years to come, decades even.
They are too good at making money and selling devices.
Ys they may get more money from selling iPhones but that has something to do with the fact that people are likely to upgrade their Phones more often than a Macbook or iPad even. Plus is a bit cheaper. I love MacBooks but they are far too expensive.

Actually, the interesting thing is that even if their iPhone sales declined by 50%, they make such a larger profit off those sales and they can control their inventory to control costs, that Apple would still make a healthy profit. Obviously their stock price would plummet, but Apple would still make billions every quarter. The process would be first they launch the iPhone dud. Launch sales are terrible, but even with 50% less demand they would still be selling out in lots of places. The iDud would be quickly revealed and Apple would move into crisis mode. Future orders would be scaled back to the furthest extent allowed in their contracts. Where orders couldn't be curtailed, Apple would negotiate buyouts. But remember even with 50% less demand, every iPhone in existence on the launch day would be sold fairly quickly. Apple would scramble for the rest of the quarter to bring supply down. It would be a disaster, but every iDud made would still get sold eventually. Some might sit on a shelf for a few months instead of the current few weeks, but eventually supply and demand would be balanced. Remember Apple would have a whole year to do this and their initial supply at launch day (which is when they find out they have a dud and they start responding) is small compared to 50% of their yearly sales. The supply chain would get balanced eventually. And we haven't even had to resort to price cuts, which there is plenty of margin to implement if that was needed.

Apple would then work really hard to make sure the next iPhone wasn't a dud. But they would also be much more conservative in their orders for the next iPhone. So even if next year's demand is 50% of even the already 50% drop, Apple would be much less exposed. Again Apple would respond. New contracts would have more flexibility to ramp down production built into them. Contingency plans would be in place.

Profits would tumble, but assuming other parts of the business aren't also seeing 50% declines year over year, there is no reason why Apple couldn't finish this horrific year with a profit.

And then, as you point out, Apple has the $175 billion cushion. But on a year to year basis, they probably wouldn't need it. Or if they did, it would be a fairly slow burn.

Kind of amazing, right?

 

[01silver4]

But, but, but, i thought no one wanted big phones. At least that's what Macrumors forum members all said?

I have been saying for a long time, if Apple made the iphone bigger it would be a hit. but 34,000 iPhone 6 sold very hour!! is just mind blowing. Despite a lot of people on here saying they don't want the bigger phones, I for sure wasn't one of them. I have been waiting along time for this, since the 4S.

 

[viorelgn]

Huge is an understatement. I thought 70 billion in revenue would be hard to get. Just insane.

 

[s2mikey]

The competitive advantage due to wages and working conditions is narrowing every day. Many companies are seeing huge wage inflation in India, China, Singapore, Malaysia, and the rest of ASEAN. The significant cost benefit that once was has equalized when netting taxes, duties, and shipping charges.

The scary part is that labor productivity is improving in those countries through competition which offsets part of the cost inflation.

I guess this is a good thing but I bet companies stop using China or where ever to make stuff if they can find an even more miserable people to use. Labor tends to end up where people are the most desperate and miserable. Could idevices be made in Afghanistan soon? Don't laugh....imagine how low those wages could be?

Oh well, it's the way of the world. Just sad that these big companies that are taking in trillions of dollars can't do everything here in the USA. They CAN, they just refuse to. Maybe someday.