Apple's Q4 2023 Earnings Call Takeaways

[fbadini]

ROI = 0.00%

To add: VMware fusion player it is free and now automatically download a copy o windows on arm

So ROI < 0%

 

[Karma*Police]

A great quarter, tons and tons of money, but perhaps not enough to satisfy the avaricious machine of capitalism that demands endless, significant year-over-year growth.

YoY decline is NOT a great quarter. And what's wrong with demanding growth? It not only holds overpaid executives like Tim Cook accountable, but it motivates people to be more innovative, work harder, and more efficiently; it's what has given us modern conveniences like air travel, cars, smartphones, computers, hot showers, A/C, TVs, light bulbs, refrigerators, toilets, etc. which weren't even available just 2 lifetimes ago, and that "avaricious machine of capitalism" is what has lifted billions of people out of poverty.

 

[threesixty360]

Welcome to the 80s apple dated designs, no innovation or wow factor, costly products. Its no wonder I am still using my iphone 12 pro max & hanging onto my 2021 16” macbook pro m1 Max.

Its time Apple stops focusing on the ivision pro, makes there prices more competitive & brings life back to the iphone, ipad & mac lines by bringing something new to the table.

You bought a top of the range MacBook less than 3 yrs ago and your “hanging on to it?”

MacBooks are meant to last ages! I had my MacBook Pro 2012 for at least 6 or 7 yrs before I even thought about upgrading.

What is wrong with people? It’s insane how we want Apple to make high quality products which implies they should last. And then get upset when they don’t entice us to upgrade every other year. These are hugely expensive machines!

 

[Kierkegaarden]

And/or the obvious one they are actively engaged in doing, raising prices while cutting costs... AKA "margin expansion," which allows them to sell fewer units but reap "another quarter of record profit." The problem with that is that it only goes so far. At what level of margin does even faithful fans start questioning why does 45 cents of every dollar I'm spending on this new thing not actually contribute to buying any part of it? Does that (does margin) have to become 50% to reach some kind of big "too rich for my blood" epiphany? 55%? 60%? Where does the customer demand more value for the money spent or else?

Through a shareholder lens, fattening margins are exciting and positive: more money for "US!" However, look at the same through a consumer lens and see that all this money is actually buying LESS of the thing I'm buying... while more is sliced away to feed the bottomless pit of "another quarter of record..."

Look through the companion thread focused on Mac sales being down and expectations for many more sales with M3 from Apple. See possibly the most fanatic of fans writing comments about pricing of RAM & SSD getting out of hand, stretching the time with the Mac they already own vs. buying a new one, etc. Where's the all-new, fever-pitched enthusiasm among the fanatics (yes, there is some buy gauge the percentages within that thread yourself)?

I'm an Apple everything guy and I was completely ready to buy that new 15" MBair on launch... until I upped the specs to make it perfect and found the pricing well in excess of MBpro. Long story short: that culminated with me opting to buy a $55 battery on Amazon to get a few more years out of the Intel MB I already own. I'm probably out now until about M5 or so.

And in re-embracing an actual PC because of a need for full Windows instead of hoping for the best with ARM Windows, getting reacquainted with Windows, Windows apps, etc on a more regular basis... along with the huge reminder of relative value of hardware (such as looking at an 8TB m.2 stick for $750 at retail for a single unit sale vs. $2200 as an upgrade to 8TB from Apple who buys in tremendous bulk), I find myself thinking about that next laptop as possibly being a PC instead of Mac. I much prefer Mac & macOS but there's practical considerations like $750 vs. $2200 for the same benefits. By M5, I wonder if that $2200 will be $2400-$2600... while I'm much more confident that $750 will probably be going the other- LOWER- way.

I believe Apple needs to strike a better balance between maximizing shareholder ROI and delivering tangible value for customers. Customers do not need shareholders for anything... but shareholders absolutely need customers to keep opening those wallets to put every dollar into that "another record quarter..." result. While every quarter's "records" strongly imply the opposite, customers do 100% retain the ability- forgotten as it may seem- to say "NO!"... as this customer did to that incredible new MBair... and then to any new MB at all in 2023.

5-10 years ago, I wouldn't have even flinched... but back then the value proposition felt better. Of course, that was also when target margin was below 40% and there was abundant competition for RAM & storage.

If you listened to the call, you would know that the blended margin was 45 — product margin was in the 30s. And part of their r&d budget goes to increasing manufacturing efficiency & productivity, which translates to a better product margin. I think Apple adheres to knowing where the red line is and never crossing it. The margin they have attained is simply a product of exceptional cost management through the years — and keep in mind that there weren’t mass layoffs at Apple like other tech companies, and their r&d budget hasn’t decreased.

 

[canadianreader]

If you haven't locked in on a monitor for that new Mx Mac, consider NOT-Apple monitors that include a built in KVM-like hub. I went that way mostly because I wanted to pair a Mac Studio desktop with an ultra-wide. The one I chose had a great mix of popular ports and the easy ability to share keyboard and mouse with any other computer attached to the monitor. Mine has FOUR such video inputs, so conceptually, I could attach Mac, PC, game console and AppleTV or similar.

It's almost a knee-jerk reaction to buy ASD with a new Mx Mac... but there are PLENTY of fish in the monitor sea and plenty with some great features for those who maybe need a new monitor to be more than only a Mac monitor.

I watching some videos last night looking for best KVMs I found one about Dell UltraSharp 40 inch very tempting because you don’t need so many hdmi cables but way too expensive about $2k usd and now I realize I only need the kvm for mouse keyboard and sound, for the video aspect I could switch both monitors inputs to hdmi1 or hdmi2 manually and both my monitors are compatible with the Mac Studio and any PC. But if I upgrade my monitors for sure I’ll buy the ones that have KVM built-in now that I’m aware of the tech.

 

[HobeSoundDarryl]

If that Dell 40" ultrasharp was the ultra-wide one which seems likely, while MSRP hovers at about the same as ASD with stand option, many third party retailers offer a good discount off MSRP (23% off as I write this on Amazon). And when it comes up as a refurb on the Dell site or Amazon, etc, the discount can drop well below ASD pricing.

 

[threesixty360]

usual bs from Apple heads as if it’s some football team! The guy runs the most important public company in America. Pretty much every pension fund is invested in Apple stock. Most peoples lives in the USA depend in some way on this guy running a steady ship and all people can moan about is “he’s not innovating enough” blah blah


when Apple innovate they create risk (thin MacBook, Touch Bar, shallow keyboard, trash can mac). And then they get slated by “pros” who want them to go back to less innovative designs (why does it have to be so thin? Etc).
Apple can’t win!

The biggest problem Apple have is Tim Cook will not live forever. His run is unparalleled. Best ceo of a company in world history. Who has delivered more for both customers and shareholders? Not even Steve jobs or gates has. Not bezos. He may not be a “founder” but he runs the best ship anywhere, ever.

Final point.. iPads are barely down YOY and they haven’t even had a new model out. The business is nearly as big as the MacBook which has seen lots of new models recently.
So why is there always so much iPad hate? If you read these forums you’d think it’s a product failure! I don’t understand? Considering its average selling price is so low they must be selling tons more of these than macs! It’s easily there most popular computer sales wise. Yet it’s hated by so many Apple fans. Weird.

 

[Shirasaki]

A great quarter, tons and tons of money, but perhaps not enough to satisfy the avaricious machine of capitalism that demands endless, significant year-over-year growth.

Even more, generate profit out of thin air rather than something tangible. I am actually amazed how we maintain unlimited growth for so long without straight up blowing the Earth Into smithereens, especially since literally everything involved to generate revenue and profit is finite.

 

[Kierkegaarden]

It might go away but it may also open the door for Apple to get into the search engine business which could generate a decent amount of revenue for the company. Whether or not that is even part of Apple's plan remains to be seen.

It will also be interesting to see how much AI shakes up the search engine market going forward.

Great points — I have no doubt that Apple has a solution ready if that relationship is severed. And regarding AI, I think Google is more concerned about how this will impact search and associated ads.

 

[Kierkegaarden]

Regarding Vision Pro, I wasn’t surprised that Tim said this would be exclusive to the Apple Store — but hopefully there will be option to get fitted beforehand and have the device sent to me.

 

[svish]

iPhone 15 series is definitely helping to boost revenue. Services will continue to bring in more money

 

[Santabean2000]

Everything that goes up must come down, unless Apple find ways to generate new interest in their products. I’m certainly not that excited anymore. Perhaps it’s just age.

I think it's come from the idea that Apple has moved from wanting to make great products that surprise and delight, to simply wanting to make great profits...

I believe Apple needs a cleaner, less punitive product lineup that better reflects what customers want/need in 2023. Surprise and delight us Apple, surprise and delight...

 

[Bodhitree]

Honestly, it’s time for the shareholders to stop thinking that they know Apple’s business better than Apple executives. The Apple DNA in the employee cadre goes back a long way, to Steve and the long success of the company in computers and devices. The role of shareholders is just to provide capital.

I think Tim Cook has done very well in the post-Steve Jobs era, he doesn’t have the same insight that Steve had in product design but he has managed to grow the company to one of the world’s biggest. Apple in 2010 had 50,000 employees and a 50 bn usd revenue, in 2022 they had 160,000 employees and nearly 400 bn usd revenue, that is not a bad progression.

In terms of innovation they are still making smart, long-term focussed calls. Some of the design of the Vision Pro software is very forward looking.

 

[lysingur]

I find comments like this very out of touch with reality. Who in tech is doing mad innovative work? Who would you rather see running Apple? Where is this "visionary" going to come from? What company is producing better, more innovative products than Apple?

As much as people love to lionize Jobs, he nearly destroyed Apple the first time around and he practically ran NeXT into the ground too. Had Apple not chosen NEXTSTEP, the legacy/myth of Steve Jobs would be very different.

Cook is far more than a caretaker. During his tenure Apple launched the Watch, got into Services bigtime, transitioned to Apple Silicon, and plenty more. A lot has happened under Cook. Calling him a caretaker is insulting. He's the most successful CEO in the history of business. He may not be a tech visionary, but that doesn't mean he has no vision. He certainly knows how to surround himself with great people.

So, again, I ask....who is more innovative than Apple? If you find Apple "stagnant, predictable, and boring", what company excites you? What industry figure do you think should be running Apple? Who do you think will do a better job than Cook?

I don't know if Vision Pro will "reignite the magic" (I think you and I share a similar opinion on Vision Pro), but it is a very interesting piece of technology. I'm not sure people will want it, but that doesn't mean it isn't quite groundbreaking.

You named two things that he did right: the Watch and services. If you read up on the development of the Apple Watch, it was mostly luck that it became the product it is today. Cook certainly didn't have an active role in developing it. It was Ives' pet project and it might be a surprise to you, but he didn't envision the Apple Watch to be so health-focused initially.

Transitioning to Apple Silicon was already well underway under Jobs, i.e., iPhone 4, which debuted in 2010.

So the only success Apple has had that can be mostly attributed to Cook alone is the expansion of services, which was being done by almost every single Big Tech company at the time.

I'm not sure if Cook is surrounding himself with great people. The quality of Apple's software has gone down precipitously. If you can honestly say "(Cook) certainly knows how to surround himself with great people" after having used Siri for your smart home for more than a decade, with a straight face. I'm sorry, but you're just a fanboy who hasn't the slightest objectivity.

I would love for you to give just a couple of projects that Cook himself started and succeeded in.

1. Apple TV+ has been hemorrhaging money since its inception, with no end in sight.
2. Project Titan has failed and just because some say it's just a rumour doesn't change the fact that Apple had hired thousands of engineers to work on it.
3. Siri is still an abomination for all these years during which your beloved Cook is at the helm.
4. Apple even missed its own deadline in transitioning to Apple Silicon and introduced an anemic Mac Pro with no real expandability just to complete it.
5. Cook held on to the iPhone like his life depended on it but failed to get ahead on AI or the next big thing that could potentially replace the iPhone as the next cash cow.
6. He even failed to identify gaming as crucial to the success of Vision Pro and only in the past year started to divert some of the attention he paid to Apple TV+ to build real relationships with game developers. That was only one year before this supposedly generational product was to be made available to consumers.

Cook committed a series of massive blunders as I detailed above but only got away with it because iPhone sales were so strong. I have predicted earlier than anybody here that Apple couldn't do without gaming and that it should either start developing its own games or commission a game studio to develop an AAA game that can demonstrate the superiority of ASi chips. Apple only started doing this in the past year, rather than during the transition to ASi.

I hate to break it to you but Apple's decline has started. It's not to say Apple is doomed, but Apple is morphing into something akin to Sony. Apple is such a large company that once the organizational momentum gets started for a project, e.g., Apple TV+, there is almost no way to stop it. Apple has to succeed in entertainment and as a studio, but just like in entertainment, you tend to lose money, and a lot of it, a lot of the time. Cook didn't have a great plan going into it and he certainly didn't have a Plan B. Once iPhone sales start to really slow, his ill-advised adventure into entertainment will be exposed as a monumental misjudgment. To think all that money could've been directed into the materialization of an electric car replete with Apple's state-of-the-art technologies just makes one's stomach turn. Apple Silicon could've been used to power Apple's in-house self-driving technology, on top of CarPlay, Apple Music, tracking (a la AirTag), Spatial Audio, Apple Glasses, iPhone as remote control, etc. Cook squandered a golden opportunity.

Not saying he wasn't a great CEO up until the pandemic (perhaps earlier as I'm being generous) but it's time for him to go and let someone else with fresh ideas try.

 

[lysingur]

No it's not normal. Expecting more is entitled, that's all. Back in reality, anyone can see that Apple is doing a lot of very interesting work. Whether you're interested in it or not, Vision Pro is pretty insane from a technological standpoint. No other company is close to delivering what Apple has accomplished. There's nothing stagnant, predictable or boring about that.

So what do you expect from Apple? What would you like to see them do? Surely if you can pass judgment on how boring, stagnant and predictable they are, you must have LOTS of ideas about what they should be doing instead and who would be doing a better job of leading them.

Let's hear some. Otherwise your words are pretty cheap.

Vision Pro isn't even on the market yet. And it sure is insane that the battery life is only two hours for a device advertised for serious productive work.

 

[nickosbad]

The “Mac sales being down” response makes me laugh….no Tim…your machines are already fast enough so the M3 will not drive sales up….what will drive up sales is giving consumers what they actually want:

An iMac bigger than 24”…give us at least a 27” one again

A MacBook Pro with 16gb ram as standard

A Studio display that runs Apple TV

the problem is Apple seem to still be in this mindset of selling a baseline product and expecting the consumer will “upgrade” it to get it to what they expect it should be out of the box for the price they are paying

As for Vision Pro….they are living in cuckoo land if they think that this is gonna sell and be a real success…..not a chance at the price they are selling it at!!!

 

[lysingur]

If it does go away, then Apple will just launch it's own search engine and make even more money.
Google as a search engine is dying!

The search engine is dying in general. Why would you want Apple to start a dying service?

 

[lysingur]

The “Mac sales being down” response makes me laugh….no Tim…your machines are already fast enough so the M3 will not drive sales up….what will drive up sales is giving consumers what they actually want:

An iMac bigger than 24”…give us at least a 27” one again

A MacBook Pro with 16gb ram as standard

A Studio display that runs Apple TV

the problem is Apple seem to still be in this mindset of selling a baseline product and expecting the consumer will “upgrade” it to get it to what they expect it should be out of the box for the price they are paying

As for Vision Pro….they are living in cuckoo land if they think that this is gonna sell and be a real success…..not a chance at the price they are selling it at!!!

Vision Pro is going to be a niche product and will likely remain so as long as Cook is CEO. Apple's positioning and messaging of Vision Pro as a generational product is deplorable at best. Two-hour battery life but let's use it to experience a feature-length film...and then talk to grandma afterwards. 😂

 

[Marshall73]

Not bad results when you look at global inflation, wage pressures and increased cost of living reducing available cash for luxury items.

 

[JamesHolden]

Vision Pro isn't even on the market yet. And it sure is insane that the battery life is only two hours for a device advertised for serious productive work.

Lol. Plug it in. Problem solved.

 

[scrapesleon]

I think Apple themselves should give people some deals this holiday season you know maybe a 10% off come on Tim

 

[Velli]

The “Mac sales being down” response makes me laugh….no Tim…your machines are already fast enough so the M3 will not drive sales up….what will drive up sales is giving consumers what they actually want:

An iMac bigger than 24”…give us at least a 27” one again

A MacBook Pro with 16gb ram as standard

A Studio display that runs Apple TV

the problem is Apple seem to still be in this mindset of selling a baseline product and expecting the consumer will “upgrade” it to get it to what they expect it should be out of the box for the price they are paying

As for Vision Pro….they are living in cuckoo land if they think that this is gonna sell and be a real success…..not a chance at the price they are selling it at!!!

What a weird list. None of that will make a dent in Mac sales. iMac is a minute part of Mac sales, regardless of which size you put out. 16GB can be had at 200 USD more, so what you're really asking for is a price drop of 200 USD. Will that increase sales significantly? Enough to offset the lower margin? Probably not, and even if so, only temporarily. A studio display that runs Apple TV?? Which consumers are you talking about that actually want that, other than you? I have heard that requested exactly one time, including this one. How many people watch TV shows on their 27 inch computer screen? I'm willing to bet that a lot more is using iPads in their beds for that, than sitting in their office chair in front of their computer.

As for Vision Pro, Apple always plays the long game. Apple TV was a very low selling device for many years, until it got to the point where you now seem to believe that it is somehow the saviour of Mac sales... Apple Watch was widely considered a flop among many pundits for quite a while. Sales number of the first device is irrelevant. What's relevant is how many they are selling in five years.

As Tim Cook presented: Mac sales are down because overall PC market is down, combined with the fact you are comparing to a quarter with for example a newly released Macbook Air, which is the most sold Mac.

 

[JamesHolden]

You named two things that he did right: the Watch and services. If you read up on the development of the Apple Watch, it was mostly luck that it became the product it is today. Cook certainly didn't have an active role in developing it. It was Ives' pet project and it might be a surprise to you, but he didn't envision the Apple Watch to be so health-focused initially.

Transitioning to Apple Silicon was already well underway under Jobs, i.e., iPhone 4, which debuted in 2010.

So the only success Apple has had that can be mostly attributed to Cook alone is the expansion of services, which was being done by almost every single Big Tech company at the time.

I'm not sure if Cook is surrounding himself with great people. The quality of Apple's software has gone down precipitously. If you can honestly say "(Cook) certainly knows how to surround himself with great people" after having used Siri for your smart home for more than a decade, with a straight face. I'm sorry, but you're just a fanboy who hasn't the slightest objectivity.

I would love for you to give just a couple of projects that Cook himself started and succeeded in.

1. Apple TV+ has been hemorrhaging money since its inception, with no end in sight.
2. Project Titan has failed and just because some say it's just a rumour doesn't change the fact that Apple had hired thousands of engineers to work on it.
3. Siri is still an abomination for all these years during which your beloved Cook is at the helm.
4. Apple even missed its own deadline in transitioning to Apple Silicon and introduced an anemic Mac Pro with no real expandability just to complete it.
5. Cook held on to the iPhone like his life depended on it but failed to get ahead on AI or the next big thing that could potentially replace the iPhone as the next cash cow.
6. He even failed to identify gaming as crucial to the success of Vision Pro and only in the past year started to divert some of the attention he paid to Apple TV+ to build real relationships with game developers. That was only one year before this supposedly generational product was to be made available to consumers.

Cook committed a series of massive blunders as I detailed above but only got away with it because iPhone sales were so strong. I have predicted earlier than anybody here that Apple couldn't do without gaming and that it should either start developing its own games or commission a game studio to develop an AAA game that can demonstrate the superiority of ASi chips. Apple only started doing this in the past year, rather than during the transition to ASi.

I hate to break it to you but Apple's decline has started. It's not to say Apple is doomed, but Apple is morphing into something akin to Sony. Apple is such a large company that once the organizational momentum gets started for a project, e.g., Apple TV+, there is almost no way to stop it. Apple has to succeed in entertainment and as a studio, but just like in entertainment, you tend to lose money, and a lot of it, a lot of the time. Cook didn't have a great plan going into it and he certainly didn't have a Plan B. Once iPhone sales start to really slow, his ill-advised adventure into entertainment will be exposed as a monumental misjudgment. To think all that money could've been directed into the materialization of an electric car replete with Apple's state-of-the-art technologies just makes one's stomach turn. Apple Silicon could've been used to power Apple's in-house self-driving technology, on top of CarPlay, Apple Music, tracking (a la AirTag), Spatial Audio, Apple Glasses, iPhone as remote control, etc. Cook squandered a golden opportunity.

Not saying he wasn't a great CEO up until the pandemic (perhaps earlier as I'm being generous) but it's time for him to go and let someone else with fresh ideas try.

Lol. I love random business know it all’s on fan forums. Cook sucks….but you seem to have all the answers. Maybe Apple will hire you to take over when he’s ousted and you can show us how easy it is!

 

[JamesHolden]

Vision Pro is going to be a niche product and will likely remain so as long as Cook is CEO. Apple's positioning and messaging of Vision Pro as a generational product is deplorable at best. Two-hour battery life but let's use it to experience a feature-length film...and then talk to grandma afterwards. 😂

And you have no available plugs in your house? I guess your TV runs on battery power too? I mean, sure, the two hour battery life might pose a problem when I’m camping…but sitting at home on the couch? Is that really the best you can do? I’m skeptical about Vision Pro, but two hour battery life for a product that’s mostly designed to be used indoors where wired power is readily available…that’s the least of my concerns.

 

[Hoyboy]

No it's not normal. Expecting more is entitled, that's all. Back in reality, anyone can see that Apple is doing a lot of very interesting work. Whether you're interested in it or not, Vision Pro is pretty insane from a technological standpoint. No other company is close to delivering what Apple has accomplished. There's nothing stagnant, predictable or boring about that.

So what do you expect from Apple? What would you like to see them do? Surely if you can pass judgment on how boring, stagnant and predictable they are, you must have LOTS of ideas about what they should be doing instead and who would be doing a better job of leading them.

Let's hear some. Otherwise your words are pretty cheap.

Gaming is a huge area where they could improve. Invest in AAA game studios like Microsoft have to encourage others to jump on board as well. Adopt industry standards that make it easier for developers to port games.

They could make a console version of Apple TV and make their own first party gaming controller and also one that transforms the phone into a handheld gaming device.

Apple silicone has the potential to change the gaming industry.

Then you have Macs. There should be bigger screen sizes. There could develo even larger imacs with hinges that allow the screen to fold flat and to be used as a touchscreen with Apple Pencil for designers.

MacBook could also have hinges that allow them to fold completely flat and have touch screens for the same purpose.

iPads could run macOS when docked to make it all cohesive with the option to run iPad os on the go.

iPhone could have different folding form factor that could support iPads apps when unfolded.

Street view in Apple Maps that’s integrates into CarPlay for augmented reality.

Apple Card services for more countries.

The list goes on. These are just some initial ideas off the top of my head which I’d like to see.