Apple Shipped an Estimated 29 Million iPhone X Devices in Q4 2017

[HobeSoundDarryl]

I got a headphone dongle with my X.
It's in the little travel pouch that contains my 20 year old Etymotic headphones I use when I fly.
Which isn't often. So I've yet to use the dongle.
I've also got a MacBook Air which has an gig-ethernet dongle which I rarely use either. Only for when WiFi isn't fast enough for a large/lot of file transferring.
That's what dongles are for. Just in case you really must use something that most people rarely use any more.
Why do we need to have the headphone jack back in?
For the 1% who think they are so self important that it MUST be part of the package. I think not...

Good for you. I'm glad that you are happy with a corporate decision made for you.

I happen to not be you and I'd like it back if I had any such say. I'm also very likely not one of only 1% (nor some kind of elitest) that feels that way. While you may rarely fly, I fly a lot. It used to be nice to be able to unplug from iDevices or Macs and into in-flight entertainment equipment without needing dongles. Now it's a hassle. For what? Nothing. As consumers, we gained nothing with this change.

Consider this:

• if I got my way: you and those who feel like you would be entirely unaffected. A jack doesn't inhibit your alternative approach in any way: you could still carry that dongle if you need it and use it as you do now. I- and those like me- would just get a benefit we want too. Bonus, if you happen to lose that dongle somewhere, you would have a backup to still being able to plug in, rather than just do without until you could buy another dongle somewhere.
• your way: you and those who feel like you are also entirely unaffected. But me and those like me cant get our wants met too, without the hassles of carrying dongles or other solutions we didn't need with former iPhones.

Net result: whether there is or is not a headphone jack, your audio connection approach is entirely unaffected. But those of us who would rather have a unified & dongle-less jack across ALL of our Apple hardware- that is also usable with pretty much anything & everything else to which headphones might be attached in the world- could get what we want too.

The arguments in support of jettisoning the jack should apply to iPads and Macs too. But you see nobody calling out Apple as ignorant or antiquated for keeping the headphone jack in those products. Jettisoning it only makes sense here- in this ONE Apple product. Why? Because Apple chose to jettison it. Any reason beyond that should apply to the other products, and thus cast Apple as wrong for keeping it in those other products. But you never see that.

 

[617660]

Good for you. I'm glad that you are happy with a corporate decision made for you.

I happen to not be you and I'd like it back if I had any such say. I'm also very likely not one of the 1% that feels that way. While you may rarely fly, I fly a lot. It used to be nice to be able to unplug from iDevices or Macs and into in-flight entertainment equipment without needing dongles. Now it's a hassle. For what? Nothing. As consumers, we gained nothing with this change.

Consider this:

• if I got my way: you and those who feel like you would be entirely unaffected. A jack doesn't inhibit your alternative approach in any way: you could still carry that dongle if you need it and use it as you do now. I- and those like me- would just get a benefit we want too. Bonus, if you happen to lose that dongle somewhere, you would have a backup to still being able to plug in, rather than just do without until you could buy another dongle somewhere.
• your way: you and those who feel like you are also entirely unaffected. But me and those like me cant get our wants met too, without the hassles of carrying dongles or other solutions we didn't need with former iPhones.

Net result: whether there is or is not a headphone jack, your audio connection approach is entirely unaffected. But those of us who would rather have a unified & dongle-less jack across ALL of our Apple hardware- that is also usable with pretty much anything & everything else to which headphones might be attached in the world- could get what we want too.

The arguments in support of jettisoning the jack should apply to iPads and Macs too. But you see nobody calling out Apple as ignorant or antiquated for keeping the headphone jack in those products. Jettisoning it only makes sense here- in this ONE Apple product. Why? Because Apple chose to jettison it. Any reason beyond that should apply to the other products, and thus cast Apple as wrong for keeping it in those other products. But you never see that.

Just because iPhone doesn't have a headphone jack now, doesn't mean all iPad and Mac users have to suffer too.

You keep your opinion to yourself. In another word, don't give Apple any wrong idea.

 

[zorinlynx]

I got a headphone dongle with my X.
It's in the little travel pouch that contains my 20 year old Etymotic headphones I use when I fly.
Which isn't often. So I've yet to use the dongle.
I've also got a MacBook Air which has an gig-ethernet dongle which I rarely use either. Only for when WiFi isn't fast enough for a large/lot of file transferring.
That's what dongles are for. Just in case you really must use something that most people rarely use any more.
Why do we need to have the headphone jack back in?
For the 1% who think they are so self important that it MUST be part of the package. I think not...

I ended up buying Bose noise cancelling Bluetooth headphones. They work great with the iPhone wireless, and I don't need a dongle. Also, Bose includes a cable, which I keep in the headphones' case, which lets me plug into the in-flight entertainment system.

I haven't missed having the headphone jack on my 7 Plus. I realize some people do, but it's pretty easy to work around it with the right hardware.

 

[HobeSoundDarryl]

Just because iPhone doesn't have a headphone jack now, doesn't mean all iPad and Mac users have to suffer too.

You keep your opinion to yourself.

I'm not arguing that. As a consumer, I desire the headphone jack to go back into iPhone to make it an even more appealing device for those of us that don't like dongles or need something better than limited-reach Bluetooth, etc.

And first amendment applies here.

 

[617660]

I'm not arguing that. As a consumer, I desire the headphone jack to go back into iPhone to make it an even more appealing device for those of us that don't like dongles or need something better than limited reach Bluetooth, etc.

And first amendment applies here.

I couldn't agree more with what you said. There doesn't need to be a technical justification, it is totally at Apple's discretion of what they want to add or eliminate from a device.

That's why voting with wallet is so important, and why I am keeping my SE for as long as possible.

 

[HobeSoundDarryl]

I haven't missed having the headphone jack on my 7 Plus. I realize some people do, but it's pretty easy to work around it with the right hardware.

Yes, but that argument could go with ANY corporate decision to kick anything else out of a future iPhone. Kick out the battery and not miss it because we buy it in a separate "dongle" case, a pretty easy workaround with the right hardware. Kick out the camera and not miss it because we buy a separate camera or maybe a case with a camera, a pretty easy workaround with the right hardware. Etc.

That's where it goes to be so accepting of corporate decisions jettisoning useful features. We can always work around ANY such decision. But eventually we could be buying what is basically an empty box, then buying a bunch of other "right hardware" to reassemble or resurrect useful features that used to come INSIDE the product.

Cue someone with a snarky SCSI port post, etc. But there's a big difference and we all know it.

Jettisoning it works great for those of us that can heavily scratch our audio needs with just an iPhone and/or just within the Mac or maybe even a computing-based setup. But try to extend that beyond that limited bubble and it adds burdens that were NOT there before. For what (consumer) gain? Nothing.

I'm entirely for jettisoning legacy stuff when it's effectively replaced. Did this effectively replace this particular thing? Only if we can scratch our audio itch within a relatively limited bubble.
[doublepost=1516810695][/doublepost]

I couldn't agree more with what you said. There doesn't need to be a technical justification, it is totally at Apple's discretion of what they want to add or eliminate from a device.

That's why voting with wallet is so important, and why I am keeping my SE for as long as possible.

I'm right there with you- hanging on to former Apple hardware rather than rewarding decisions that basically got us consumers NOTHING (but hassles). Put it back and I'm first in line to buy again. But as is so often slung around here: "2XX Billion in the bank can't be wrong" doesn't miss my $1000 every year or two... or apparently yours.

 

[thadoggfather]

A price drop once the next variant of a device comes out is one thing but this is why Apple has low, mid and high tier devices.

Its bad for consumers because it placates them into thinking that everything should be in the same pricing tier.

I know if I want iPhone X then I had to pay the premium pricing and I was also aware that if I didn’t then there was a mid tier model.

It’s not the problem of Apple if I am tight or loose with my wallet. I hope current variants of the X are never lowered below 999 until they are older models.
[doublepost=1516763012][/doublepost]

Ask Huawei or google if they would be happy out the gate if they had a single model that had “failure” numbers like that and gained them that much profit.

What? I don’t follow

 

[617660]

So in addition of making monthly payment for my mortgage, car and student loan, I can start making monthly payment for my phone.

Everything is so very affordable when you break it down to 24 pieces or more.

 

[BeforeTheMeds]

This says shipped, not sold. Where are the people that quickly points that out with other companies?

No, shipped does not mean sold with apple. Apple stores stock phones and even (some at least) countries that do not have apple stores have authorized sellers that handle warranty repairs also. Here in mexico its ishop.

So shipped does not mean they have sold that many. Not that I care either way, but it IS a factor abeit not a huge one.

http://www.ishopmixup.com/ishop/webapp/CategoriaIntro.aspx?Category=iphonex&

 

[HobeSoundDarryl]

So in addition of making monthly payment for my mortgage, car and student loan, I can start making monthly payment for my phone.

Everything is so very affordable when you break it down to 24 pieces or more.

Right. And don't be surprised to see that plan expand to 36 and 48 months as the press for record revenues pushes the prices higher and higher. Only <seemingly small> monthly payment can seem small at $1500, $2000, $2500 and more if you make the timetable long enough. For example, a $2000 iPhone 12 or 13 can be "only $8.33 more per month" on a 120-month plan.

In my lifetime, one used to be able to buy- not lease- a whole car at about current lease-price payment amounts over a 24-36 month term. Now the car companies have that out there at 72+ months and, even there, can't make the price attractive enough such that the thrust of the promotional offers are dominated by only renting a car (with ever-reducing mileage limits too).

Watch where this goes. 36 and 48-month terms will come, probably not too far down the road either.

 

[IJ Reilly]

I would still love to "fail" the way Apples does, but I think their recent iOS software quality issue and the schism created by offering both iPhone 8 AND X in the same quarter ultimately impacted there sales. Had, perhaps, Apple focused only on the X release, and then offered the iPhone 8 as a mid-cycle "value" phone, they might have seen much higher sales figures.

I mean sure, Apple "fails" in this market better then most other companies succeed, but if you look at Apple specifically compared to their past performance, as an investor you should be worried about last year. Apple made decisions that impacted its growth, period, both by releasing unpolished OS software AND by trying to dump a bunch of different, but not very different, phones on a market at the same time. Both speak to the quality of leadership at Apple.

Apple can usually bank on whatever quarter they release their iPhone as being their best quarter for that year, the other 3 quarters are usually mediocre by their standards, and even by their competition. If Apple screws up a quarter, even in a way that still has them emerge as the top phone maker in that quarter, it should be concerning to investors. The other 3 quarters are not going to make up for the lower then expected iPhone 8 and X sales, historically they never do. So in the end 2017 was a miss for Apple, period. Ultimately X will not grow the brand as much as Apple hoped for.

Whether this is a one time snag, or an emerging trend is yet to be seen, but at the end of the day Apple is ONLY worth its market cap if investors trust it can deliver growth on every iPhone release, otherwise it will slip to becoming an also-ran company that might have very good sustained profits but not the growth like what Apple has been used to over the last 10 years. One trillion in market cap means nothing because it can evaporate very quickly if Apple continues to lag on software AND hardware quality issues like iOS 11 and batterygate.

Regardless of how well Apple did compared to the competition, Apple is in recovery mode, or at least should be, based on their own performance history. If consumer confidence, and investor confidence, starts to chip away from their brand even a company as big as Apple can lose a lot of ground quickly.

You are certainly right that if a company doesn't produce steady earnings growth, they will have rightly been seen by investors to have failed, and a lot of market cap can evaporate in a hurry. We don't need to go back very far in Apple's financial history to find where that very scenario played out, more than once.

I've said it before so I will say it again: the numbers will likely prove out that Apple was wise to offer both the iPhone 8 and iPhone X at the same time. It provided them with an up-sell opportunity. This might be a less familiar strategy for Apple (at least for the iPhone), but it sure isn't unusual in many other industries. Apple also practices up-selling in their other product lines, though it goes largely unnoticed.

As for quarters, Apple is a seasonally cyclical company. Their best quarter is nearly always FQ1 (October-December). This is why typically they try to get new products into the pipeline in September. The iPhone X was a bit behind the curve so more sales may have shifted to the iPhone 8 than they might have preferred. But having them both available as new models at the same time wasn't a mistake, it was a deliberate up-sell strategy, and I believe the numbers will show it was the smart way to go.

 

[JediZenMaster]

What? I don’t follow

I don’t think the price should be lowered just to please people. It’s a high tier device and either you pay what they are asking or not.

 

[convergent]

I got a headphone dongle with my X.
It's in the little travel pouch that contains my 20 year old Etymotic headphones I use when I fly.
Which isn't often. So I've yet to use the dongle.
I've also got a MacBook Air which has an gig-ethernet dongle which I rarely use either. Only for when WiFi isn't fast enough for a large/lot of file transferring.
That's what dongles are for. Just in case you really must use something that most people rarely use any more.
Why do we need to have the headphone jack back in?
For the 1% who think they are so self important that it MUST be part of the package. I think not...

Not sure how you decided that 1% of people want a wired headphone jack, but I'm part of that group. When I buy something, I have a list of things that I consider requirements. I don't think that makes me think I'm "self important". Are you in the habit of buying things that don't meet your requirements? If you are an Apple customer, you have to be OK with that, because your choices are severely limited vs. what is available in the broader market.

Apple's fake "courage" line of poop was part of the reason why they have little credibility. The argument further went that they needed to take it out to make room for a bigger battery and to make it waterproof. Meanwhile, the competitor they most hate has a competing product with similar battery life, a headphone jack, and is waterproof... and throw in removable media for bonus points. So when I can buy something that has what I want, and not lose anything the competing protect has, why would I not want that?

You don't have a problem with dongles... great. I travel a lot and want a simplified kit to travel with. I don't want to be somewhere in a foreign country and have lost a dongle that I can't easily replace. I've lost plenty of items like that in transit, hotels, planes, conference rooms, etc.. The less things I have to keep track of, the better. On long haul flights, a rechargeable bluetooth headset battery will not make it. A wired headset will.

Glad you are happy with the X. Its a nice phone. I'm not a fan, so I bought something else. Not thinking I'm "self important" because I bought something that meets MY needs.

 

[thadoggfather]

I don’t think the price should be lowered just to please people. It’s a high tier device and either you pay what they are asking or not.

but you understand that that makes no sense right

it wouldn't be just "to please people"

it would be to usher in a whole new market of buyers who liked the X but were turned away by the price. And more units moved.

Making X a $100 uncharge vs $200 from the Plus wouldn't be the end of the world for the premium X tier, or Apple, or consumers, for example

 

[JediZenMaster]

but you understand that that makes no sense right

it wouldn't be just "to please people"

it would be to usher in a whole new market of buyers who liked the X but were turned away by the price. And more units moved.

Making X a $100 uncharge vs $200 from the Plus wouldn't be the end of the world for the premium X tier, or Apple, or consumers, for example

That’s why they have lower and mid and high tier devices.

As well as they will most likely discount this generations X also even though if they keep it around after the new one comes out.

You got to pay to play and if you don’t pay then you can’t play. Anyway let’s just agree to disagree because my view is not changing I know yours is not either which is fine.

 

[Baymowe335]

Analyst numbers are all over the place. Some show the X selling less than 10% for the quarter, some say 20% of U.S. sales, and this says around 38% of expected global sales were the X. I'm not putting any more credence in this positive report than I put on the negative reports. We'll have a better idea once Apple releases its earnings in just over a week and we see iPhone sales, revenue, and average selling price.

I wonder if Tim Cook would do a callout to emphasize the new generation's success, something like "the iPhone 8, 8 Plus, and X accounted for 60% of total sales" to refute the multitude of reports that show the 7 and 7 Plus taking the top spot by a fair margin.

Most likely, all the analysts are going to be essentially wrong in their sales projection. Analysts and investment firms are notorious for having ulterior motives to manipulate the stock, nothing more. It's illegal, but hard to enforce. There has been so much fake news debunked by Apple in their earnings reports, I can't even count them. Nikkei is one of the biggest culprits. It's literally made up news and pure conjecture extrapolated from very loose data.

Apple always debunks it when they report a blowout. Just last quarter was a great example.
[doublepost=1516815536][/doublepost]

That has to be the worst argument ever and a clear showing that you don't understand why it's bad.
[doublepost=1516806054][/doublepost]

You made a lot of good points, but what's the general goal here? Revenue or customer upgrades? Revenue could be equal or possibly greater on the X vs 6 for the quarter comparison, but you only got ~half to upgrades. Did you lose those ~30M to other brands? Are they staying put with their current iPhone?

With only half the number of upgrades, it could be argued that the CLV is going down. How much, I have no idea. Maybe it's being offset by X owners increasingly spending more.

I'm pretty sure you've mentioned before you're an investor so good for you, honestly. I've got no skin in the game. Don't currently have the $ to invest. So I understand why you're bullish on things, and rightfully so. But it blows my mind how happy people are and even encouraging higher prices when all they are is a consumer. Mind blowing.

The goal for Apple is to sell more products that people love at a higher ASP. I think X was designed to drive up ASP and give some of the "techie" people something different and cool to gravitate toward with the iPhone design getting long in the tooth. They are going to sell a lot of 8 and X, but they don't have to sell as many X to equal the the revenue from lower end models.

I think Apple is focusing on a large product mix to appeal to more customers since iPhone is becoming more popular. It's ludicrous to limit your market to just 2 phones when you can have entry level, mid, and high end markets. I think it's a brilliant move from Apple and it's already working.

Customer satisfaction, at least according to Apple, is all time high. Switch rates from Android are also at all time highs. They can't lie on earnings calls, but you can always question their sources and/or methodology for reporting this data. I look at the numbers and their financials are unbelievable. Apple is a very strong brand. Not perfect, but you'd think it's terrible reading these boards and it's just not.

 

[Carnegie]

If Apple was able to sell (i.e. sell-in) 29 million iPhone Xs in the last quarter, then it likely blew through consensus expectations for revenue and EPS. That would be an incredible result. Apple's own guidance doesn't suggest that it expected to be able to sell that many.
[doublepost=1516815947][/doublepost]

Q1 will be between 80-82 million total iPhone sales. Of that the X will be roughly 35-38 million units being optimistic. Gross revenue for Q1 will be between 84-85 billion. Margins still at 38%.

If Apple sold 35-38 million iPhone Xs, and 80-82 million iPhones total, then its revenue for the quarter would have to be more more than $84-85 billion unless it did very poorly in other areas. And its gross margin would likely be a fair bit higher than 38%.
[doublepost=1516816172][/doublepost]

No, that’s $29B in revenue from 1 phone and definitely more because ASP will be over $1000 because of the $1149 model.

Revenue is MSRP times units sold. You calculated gross profit as they have around 40% gross margin overall, although likely more on iPhone X.

Revenue isn't based on MSRP, it's based on what Apple gets for the iPhones. That would, on average, be meaningfully less than the MSRP. There are also other issues. A portion of the revenue from iPhone sales is deferred (i.e. not counted in current revenue) to account for Apple's expectation that it will continue to upgrade the software for sold iPhones for a period of time. That means that deferred revenue from previous quarters would be included in the present quarter, but in quarters where sales are greater than the average (over the last couple of years), the net effect would be a reduction in reported revenue.
[doublepost=1516816440][/doublepost]

There is no data to back up your first statement and has been speculated actually the opposite. I follow Apple closely and can tell you the iPhone X is almost assuredly their highest margin product. And don’t start quoting speculation like bill of materials. All meaningless.

iPhone X only being readily available for 2 weeks in the quarter in SOME markets doesn’t prove anything. People hold off for all kinds of reasons and 3 new phones to choose from is always better than 2. Supply was constrained the week of xMas in the US (I track it) and remained constrained in China and Asia through the new year and up until about a week ago in some places.

ASP on iPhone X will be close to $1100 as it’s speculated over half choose the $1149 model. That means 30m at $1100 is $33b and $33b at $600 which is roughly the asp for other iPhone models is 55M. So they can sell 55M regular iPhones and only have the same revenue as 33M X. The X is is like gasoline on the fire of sales. Adds up quick.

The ASP for iPhone Xs is surely higher than for iPhones in the aggregate, but likely it wouldn't be almost $1,100. The more expensive model is $1,149 at retail, and Apple isn't getting retail (or, at least, isn't counting the retail price for revenue purposes) for most iPhones sold. Though, there are currency exchange factors to consider.

That said, your larger point is right. Apple doesn't need to sell nearly as many iPhone Xs as it does other models to generate the same (1) revenue and (2) gross profit. Its margins on iPhone Xs are likely higher than on iPhones in the aggregate (and its average gross profit on the former is surely higher than on the latter), and margins on iPhones in the aggregate are higher than Apple's overall margins.
[doublepost=1516816582][/doublepost]

What is your definition of large? I’ve don’t recall Apple ever being close to an $8B beat.

Though I agree a beat would be far less likely of a notice than a miss.

Since Apple has been guiding to a range on revenue, it typically hasn't beaten the upper end of that range by a lot. About half the time its revenue results are within the range.

However, it did beat the upper end of its revenue range by more than $8 billion (and 12%) for its first quarter of FY 2015 (i.e. the Christmas 2014 quarter). That was the blowout quarter when the iPhone 6 and 6 Plus were the newest models.
[doublepost=1516816748][/doublepost]

This says shipped, not sold. Where are the people that quickly points that out with other companies?

No, shipped does not mean sold with apple. Apple stores stock phones and even (some at least) countries that do not have apple stores have authorized sellers that handle warranty repairs also. Here in mexico its ishop.

So shipped does not mean they have sold that many. Not that I care either way, but it IS a factor abeit not a huge one.

http://www.ishopmixup.com/ishop/webapp/CategoriaIntro.aspx?Category=iphonex&

What is often referred to as shipped (i.e. sell-in) is what is typically counted as sold for financial reporting purposes.

That said, Apple always tells us the channel inventory change for iPhone units so we know its 'shipped' (i.e. sell-in) and its 'sold' (i.e. sell-through) for iPhones.

 

[IJ Reilly]

Revenue isn't based on MSRP, it's based on what Apple gets for the iPhones. That would, on average, be meaningfully less than the MSRP. There are also other issues. A portion of the revenue from iPhone sales is deferred (i.e. not counted in current revenue) to account for Apple's expectation that it will continue to upgrade the software for sold iPhones for a period of time. That means that deferred revenue from previous quarters would be included in the present quarter, but in quarters where sales are greater than the average (over the last couple of years), the net effect would be a reduction in reported revenue.

Are you referring to GAAP vs. non-GAAP accounting? I thought Apple was able to give up reporting revenue with deferrals some years ago, due to changes in SEC reporting requirements, or some such thing.

 

[Carnegie]

Are you referring to GAAP vs. non-GAAP accounting? I thought Apple was able to give up reporting revenue with deferrals some years ago, due to changes in SEC reporting requirements, or some such thing.

From Apple's latest 10-K:

For multi-element arrangements that include hardware products containing software essential to the hardware product’s functionality, undelivered software elements that relate to the hardware product’s essential software and/or undelivered non-software services, the Company allocates revenue to all deliverables based on their relative selling prices. In such circumstances, the Company uses a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of selling price (“ESP”). VSOE generally exists only when the Company sells the deliverable separately and is the price actually charged by the Company for that deliverable. ESPs reflect the Company’s best estimates of what the selling prices of elements would be if they were sold regularly on a stand-alone basis.

For sales of qualifying versions of iOS devices, Mac, Apple Watch and Apple TV, the Company has indicated it may from time to time provide future unspecified software upgrades to the device’s essential software and/or non-software services free of charge. Because the Company has neither VSOE nor TPE for the unspecified software upgrade rights or the non-software services, revenue is allocated to these rights and services based on the Company’s ESPs. Revenue allocated to the unspecified software upgrade rights and non-software services based on the Company’s ESPs is deferred and recognized on a straight-line basis over the estimated period the software upgrades and non-software services are expected to be provided.

 

[IJ Reilly]

From Apple's latest 10-K:

Something did change in the way they handle this accounting, but not being a CPA I wouldn't even attempt to interpret this language, beyond that they do hold back some revenue against speculative future upgrades. How much is that, wonder? The suspicion is not very much. I recall in the past Apple charging for "unlocking" hardware features. They were always token amounts (that nevertheless tended to annoy their customers).

 

[apolloa]

Best shipping or best seller lol?

50M was the goal so...

The downward revisions come on the heels of a Taiwanese news report that Apple will cut its first-quarter iPhone X demand from 50 million to 30 million units.
https://www.cnbc.com/2018/01/02/cls...ns-still-too-high-despite-stock-pullback.html

It depends on the actual numbers right? Always gotta make it look positive to the markets right so all the AAPL share holders on here can make some money..

Numbers shipped actually mean jack though in reality.

 

[Baymowe335]

What is your definition of large? I’ve don’t recall Apple ever being close to an $8B beat.

Though I agree a beat would be far less likely of a notice than a miss.

They used to give insanely low guidance and routinely beat it by crazy amount. I am too lazy to pull it for you, but Q1 is the quarter for it to happen if it will happen. Supposedly, the new guidance is more in line with reality, but the X was such an unknown, we'll see. $8B would be a lot, but it's still only about a 9% beat. We are talking really large numbers here. I promised my wife something really big if they do over $95B, so I'm kind of on both sides here.

 

[Michael Goff]

I'm not arguing that. As a consumer, I desire the headphone jack to go back into iPhone to make it an even more appealing device for those of us that don't like dongles or need something better than limited-reach Bluetooth, etc.

And first amendment applies here.

The headphone jack likely won't ever be back until everything else shrinks and they stop wanting to put more things in there. And no, I am not talking about thickness.

 

[john123]

I'm not being dismissive of your 'friends dad' or his return, but this is such a baseless argument about returning an iPhone for the notch. The Majority of iPhone consumers could care less about the notch because they they are more poised and focusing on wanting the latest device for XYZ reasons.

Anecdotally, but the majority of those who I do know who have the iPhone X, have never even mentioned the notch or even reference to it. It's a non-issue outside tech form.

The point is, you can't speak for it being a "non-issue outside [sic] tech form [sic]" because you lack the data to back up that assertion.

Unless you work in market research AND have done studies on the subject, you're engaging in conjecture. And worse, that conjecture is likely being fueled by your own personal bias.

How do I know? Because you're making blanket statements without any evidence to support them. You cannot speak for the "majority of consumers."

Try being open minded to the idea that some people don't like the noarch even after using it. If it doesn't bother you then that's GREAT. It means you got the phone that's right for you.

But just as some people wish to use their old flip phones while others prefer an Android while others like an iPhone with a physical button, everyone is different. Going around dismissing everyone with a viewpoint that doesn't match yours is just not a good recipe for, well, life.

 

[Baymowe335]

What are the numbers for return? I bet there was alot.

Speculation? Historically, return rates to Apple Retail are under 1% but I don't have then numbers for the X.
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If Apple was able to sell (i.e. sell-in) 29 million iPhone Xs in the last quarter, then it likely blew through consensus expectations for revenue and EPS. That would be an incredible result. Apple's own guidance doesn't suggest that it expected to be able to sell that many.
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If Apple sold 35-38 million iPhone Xs, and 80-82 million iPhones total, then its revenue for the quarter would have to be more more than $84-85 billion unless it did very poorly in other areas. And its gross margin would likely be a fair bit higher than 38%.
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Revenue isn't based on MSRP, it's based on what Apple gets for the iPhones. That would, on average, be meaningfully less than the MSRP. There are also other issues. A portion of the revenue from iPhone sales is deferred (i.e. not counted in current revenue) to account for Apple's expectation that it will continue to upgrade the software for sold iPhones for a period of time. That means that deferred revenue from previous quarters would be included in the present quarter, but in quarters where sales are greater than the average (over the last couple of years), the net effect would be a reduction in reported revenue.
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The ASP for iPhone Xs is surely higher than for iPhones in the aggregate, but likely it wouldn't be almost $1,100. The more expensive model is $1,149 at retail, and Apple isn't getting retail (or, at least, isn't counting the retail price for revenue purposes) for most iPhones sold. Though, there are currency exchange factors to consider.

That said, your larger point is right. Apple doesn't need to sell nearly as many iPhone Xs as it does other models to generate the same (1) revenue and (2) gross profit. Its margins on iPhone Xs are likely higher than on iPhones in the aggregate (and its average gross profit on the former is surely higher than on the latter), and margins on iPhones in the aggregate are higher than Apple's overall margins.
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Since Apple has been guiding to a range on revenue, it typically hasn't beaten the upper end of that range by a lot. About half the time its revenue results are within the range.

However, it did beat the upper end of its revenue range by more than $8 billion (and 12%) for its first quarter of FY 2015 (i.e. the Christmas 2014 quarter). That was the blowout quarter when the iPhone 6 and 6 Plus were the newest models.
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What is often referred to as shipped (i.e. sell-in) is what is typically counted as sold for financial reporting purposes.

That said, Apple always tells us the channel inventory change for iPhone units so we know its 'shipped' (i.e. sell-in) and its 'sold' (i.e. sell-through) for iPhones.

I'm not going to go into unknowns on exact figures for Apple discounts through channel partners, but what he calculated was entirely wrong at $11B in revenue. He calculated their gross profit based on a 38% gross margin. I was just trying to teach him that revenue = sales.

Your assessment that Apple sells retailers iPhones "meaningfully less" than full MSRP would not be accurate, although NO ONE knows these numbers. I've combed their 10K and it's just not there. There is speculation we are only talking a few percentage points lower than MSRP. Every analyst talks revenue based on street prices for phones.

Furthermore, I work at a fortune 10 company who bought 6,000 iPads at one time. I know the person who did the order personally and he told me Apple gave us a 1% discount off MSRP. He joked he literally could have bought them from the Apple store for practically the same price.

I believe it too because you just have to look at their sales numbers. They aren't giving anything close to deep discounts. If anyone discounts the phones, the carriers and retailers themselves are the ones running the promotions and shrinking their own margins.

This could have changed recently, but I doubt it.

You're right about everything you said though.