Apple's Record 4Q 2015 Results: $11.1 Billion Profit on $51.5 Billion Revenue

[cycomiko]

The first is expanding, it will be in most developed by the end of next year or the year after. This will be long before iPhone sales stagnate.

The 2nd is actually doing pretty well, not bad for a service that's only just launched.

The 3rd is just about to release it's next version, it is clearly becoming more than just a hobby.

The 4th, well I'm still not convinced that it exists.

The thing is, they might diversify the company with these offereings.

Apple pay is early stage and apple will struggle more to make it useful outside of the USA, which limits its usefulness to the majority of the population as well as its only really a value for iphone owners. ITs not going to earn 60% of apples income.

Apple Music is ultimately an extnetion of itunes which will dilute money spent there. Which means its not really diversifying thier current business.

Apple TV may be diversification, time will tell. Hoping something becomes large doesnt mean it will. Otherwise the post pc revolution would be growing. They could have and should have done proper app store on this some time ago. Still annoyed the price went up, as with the exchange rate this starts making it expensive - almost as much as an Xbox one locally.

Apple Car is doesnt current exist. IF it did, and was actually successful, it might diversify the company. People like to say Apple is like BMW, but the iphone pretty much destroys BMW for profit. A car will be a very hard task.

 

[Lesser Evets]

Impressive.

I am still surprised that Apple does't focus more on Mac, since it is the 2nd biggest, and rock-solid, earning sector on the pie chart. Where is a new monitor? Where are new MacPros every year? They should be updating the processors every moment possible. Get moving, Apple.

 

[Reds622]

Aah this is the quarterly thread where people temporarily forget that Apple is a business and think they are a charity instead.

Except the more they become a "business," the less desirable the company will become, IMO, to the masses. Constantly taking advantage of current customers through incremental price increases will not end well. Customers may get fed up and think about giving another company their business. Obviously there is a fine line here, and I think Apple is doing everything they can to walk it without alienating their customers. Customers don't like to feel like they are being nickel and dimed to death. All my opinion of course.

 

[nando87]

Stock is now down after hours. It was up 3% at one point. It's not down based on anything Cook said or didn't say it's down because every single question is basically iPhone is doomed iPhone is doomed iPhone is doomed.

The iPhone is not doomed but the fact is AAPL is the iPhone. The biggest company by cap on earth depends on a single, not necessary at all product. That's quite scary as I'm sure you will understand. Every iPhone iteration is like flopping a coin and hope for the sales to increase, as an investor. There is no other company like this. Look at them, Exxon Mobil, inevitable and necessary product, Google, monopoly and necessary product, and you can go on and on...

p.S: the guidance for the next quarter was quite light.

 

[Michael Scrip]

This dependence on iPhone is a bit scary.

Are they really depending on the iPhone?

Or are they simply selling a lot of iPhones and making a lot of money on each one?

Apple has figured out the math: high volume + high margin = zillions of dollars. It's not rocket science.

And don't forget... Apple's other segments are profitable too. It's not like the iPhone is saving a flailing Apple. No... all of Apple makes money.

A company like HTC would be happy to have Apple's iPad revenue... let alone iPhone revenue. Instead... there are some quarters where HTC makes NO money at all. ZERO profit. Actually... LESS THAN ZERO.

So what are they dependent on... bailouts?

 

[nando87]

Are they really depending on the iPhone?

Or are they simply selling a lot of iPhones and making a lot of money on each one?

Apple has figured out the math: high volume + high margin = zillions of dollars. It's not rocket science.

And don't forget... Apple's other segments are profitable too. It's not like the iPhone is saving a flailing Apple. No... all of Apple makes money.

A company like HTC would be happy to have Apple's iPad revenue... let alone iPhone revenue. Instead... there are some quarters where HTC makes NO money at all. ZERO profit. Actually... LESS THAN ZERO.

So what are they dependent on... bailouts?

Totally and completely. If they don't sell iPhones, they will sell even less iPads, less Macs, less services, less accessories, and less of everything. And you know it. The fact that they make huge amounts of money doesn't have to do with the fact that they depend on a single product and the fact that this product is unnecessary and they already sell tons. It's about growth.

 

[ani4ani]

Over 200B in the bank. Almost a quarter of a trillion dollars. Just let that sink in for a second.

Which would drop by $50B if they repatriated it....imagine how much if they paid taxes at the right rates also

 

[mejsric]

The cheaper models accelerate up, at a quicker rate than the best top models can improve by, so all that happens is the gap between cheap and the expensive end gets smaller and smaller.

The problem eventually is that, the public, stop, and think, and eventually say..... "Hey, look, this $200 device actually is pretty dam amazing, it does everything I need, and it's 1/4 of the price of the one I normally get. You know what, I think I'll get this cheaper one and save $600.

And so the end, looms for the higher end models for the mass market. There will still be customers of course, but not in the number there once was for the high priced models, as the vastly cheaper ones are now not that far behind.

This is true. The good thing is that those cheap phones right now are not iOS and never be. I've seen a cheap copy of Samsung phones.. an imitation once.. Chinese imitation... And you can't tell difference they have the same specs and very responsive too.. Of course they are Android too. $100 vs $600 doing the same.

For Apple being only iOS is a great thing.. but not good for Samsung being Android... is just the same to other cheap Android phones who is accelerating fast.

 

[bigchrisfgb]

The thing is, they might diversify the company with these offereings.

Apple pay is early stage and apple will struggle more to make it useful outside of the USA, which limits its usefulness to the majority of the population as well as its only really a value for iphone owners. ITs not going to earn 60% of apples income.

Apple Music is ultimately an extnetion of itunes which will dilute money spent there. Which means its not really diversifying thier current business.

Apple TV may be diversification, time will tell. Hoping something becomes large doesnt mean it will. Otherwise the post pc revolution would be growing. They could have and should have done proper app store on this some time ago. Still annoyed the price went up, as with the exchange rate this starts making it expensive - almost as much as an Xbox one locally.

Apple Car is doesnt current exist. IF it did, and was actually successful, it might diversify the company. People like to say Apple is like BMW, but the iphone pretty much destroys BMW for profit. A car will be a very hard task.

Are you for really? Apple Pay here in the UK is used by loads of people. There are countries out there that use NFC far more than the USA and even here in the UK. Once these countries get it then Apple Pay will take off massively.

If Apple managed to get Apple Pay in every developed nation within the next 5 years then there is a good chance that Apple will be earning a percentage (very very small percentage, but still a percentage) of everything iPhone and Apple Watch users spend. Apple Pay has the ability to be massive, without the USA. As it happens many critics and those in the payments industry think Apple should have brought out Apple Pay sooner and outside of the USA first. Just after the 2012 Olympics the head of Visa said that they were crying out for Apple to bring out an NFC payments service.

iTunes was losing money to streaming services, Apple Music gives users an Apple streaming service option. It will soon be available for Android. Apple Music is just taking off, I'm pretty sure it will be a good competitor to the likes of Spotify.

Apple are trying to change the way TV works, it will take time but if they come out with streaming services (not just in the USA) and causal games, then they could really make a change. Not many set top boxes are offering what the new Apple TV is going to offer.

Apple car, I still doubt it exists, I just can't see it. I think Apple are more in line with battery tech and how we can bring technology to a car. People don't buy new cars as regular as other items, care generally have a long life span compared to computers, phones, and tablets. It ok having the same phone as the next person, but the same car? We all have different needs from our cars, our phones usually offer us similar needs to one an other. There is no car that can offer everything to everyone. Your right in saying you can't count it. It doesn't exists, and if does I have my doubts of it's success.

 

[mrhick01]

One of the clowns on this conference call basically said, we don't care about December Tim but we're really worried about next March. As long as Wall Street doesn't care about yesterday or today and is constantly convinced the future is bleak the stock will do nothing.



And then iPhone 7 will come out and people will say don't expect AAPL to move until the 8 comes out. With Apple and Wall Street the future is always bleak.

Maybe more companies ought to stay private, to have to stop "feeding the beast" of Wall Street expectations. I wonder if Apple is playing a "long-game" with their stock buy-backs to eventually go this route.

The greed has exceeded a threshold of healthy growth, it's all about short-term gain and quick returns.

 

[sfwalter]

I guess no one thought to ask when the iPad Pro will be released.

 

[nando87]

I guess no one thought to ask when the iPad Pro will be released.

The iPad pro is such a niche product that it doesn't matter financially. It's probably less important than the Mac Pro.

 

[Rogifan]

The iPhone is not doomed but the fact is AAPL is the iPhone. The biggest company by cap on earth depends on a single, not necessary at all product. That's quite scary as I'm sure you will understand. Every iPhone iteration is like flopping a coin and hope for the sales to increase, as an investor. There is no other company like this. Look at them, Exxon Mobil, inevitable and necessary product, Google, monopoly and necessary product, and you can go on and on...

p.S: the guidance for the next quarter was quite light.

Smartphones aren't necessary? On what planet? Btw, Google is dependent on a single product too - advertising. At what point do content blockers make that irrelevant?

 

[firewood]

Indeed, I'm sure we all know too well, looking at history how technology works.
...
The cheaper models accelerate up, at a quicker rate than the best top models can improve by, so all that happens is the gap between cheap and the expensive end gets smaller and smaller.

The "innovators dilemma" menace wins out when the vendors of cheaper products use their massive volumes to accelerate development ahead of the older expensive tech. But Apple ships not only the expensive products, but currently some of the highest volume products as well. Thus Apple's volume will accelerate themselves past themselves, thus keeping them ahead.

Plus, Moore's "law" is slowing down a bit, making it more expensive for even other high volume producers to catch up.

History will (likely, eventually) play out, but Apple's (and Moore's) slow-down offense will likely keep them on the playing field far longer than usual.

 

[Orange Computer]

My concern with this, is a huge portion of what is keeping Apple going, is only the iPhone. Granted IMO it's the best mobile phone in the market, all things being equal, it will soon meet it's end. All things are like that. Even I as an Apple device lover can grasp this.

Question is, what is Apple going to do to diversify it's products?

They're still growing the Mac business (but I'd really like to see more at the high & low ends). There's also the Apple Watch, Apple TV, Apple Music, and business services. Besides that, they have the Apple Car coming soon.
Do you really want them making dishwashers and ships like Samsung?

 

[firewood]

delete

 

[nando87]

Smartphones aren't necessary? On what planet? Btw, Google is dependent on a single product too - advertising. At what point do content blockers make that irrelevant?

Did I say smartphones are not necessary? No. What I said is iPhones are not necessary, don't change my words. Cars are necessary, but BMW M3's are not.

Google depends on its search engine, but in that field they have an absolute and undisputed monopoly. As long as you use their search engine, they make money. It's a causality relation, doesn't matter how it works.

If google disappears, the internet would be caos. It the iPhone disappears, well, we would use other smartphones, which can be slightly different, worse depending on your taste, but not comparable to changing from google to any other search engine. Come on, you understand it, don't say you don't. I like Apple and its products, but this is the reality.

 

[firewood]

Question is, what is Apple going to do to diversify it's products?

Who else is minting enough profit to increase their R&D efforts, or buy promising start-ups with new product ideas, than Apple?

 

[Michael Scrip]

Indeed, I'm sure we all know too well, looking at history how technology works.
Every year it's harder for Apple to make the iPhone THAT much better, The early years as with all new products there was lots to do and many things to add and improve upon, as years go by, what you can do and improve gets harder and harder, so the differences in models in later years get smaller and smaller compared to the early years.

Meanwhile..............

A cheap phone used to be junk, but good tech filters down, and things that were only found on the very best devices become so cheap to make they start appearing the cheaper and cheaper handsets.

The cheaper models accelerate up, at a quicker rate than the best top models can improve by, so all that happens is the gap between cheap and the expensive end gets smaller and smaller.

The problem eventually is that, the public, stop, and think, and eventually say..... "Hey, look, this $200 device actually is pretty dam amazing, it does everything I need, and it's 1/4 of the price of the one I normally get. You know what, I think I'll get this cheaper one and save $600.

And so the end, looms for the higher end models for the mass market. There will still be customers of course, but not in the number there once was for the high priced models, as the vastly cheaper ones are now not that far behind.

There will always be a certain niche for Apple products primarily because Apple offers something different than all the other vendors.

Windows PCs have traditionally been cheaper than Macs... yet Macs are still a good business for Apple to be in.

It doesn't matter if HP launches some new Pavilion laptop for $299... or any of the other dozen PC vendors. Mac users want MacOS and Apple is the only company who deliver it.

PCs are cheaper and are sold in more volume... but Apple still sells more than enough Macs.

Same for smartphones. You can buy a cheap yet good Android phone from 1,000 different vendors. But if you want iOS on your phone... it's only made by Apple.

Thus... Android phones sell in more volume... but the iPhone is (obviously) still a good business to be in.

To your point... I think those good $200 Android phones will cause more damage to the $600 Android phones.... not iPhones.

In fact... we're kinda seeing that already with Samsung's falling sales. Like I said... there are 1,000 vendors selling a product called "Android Phone" so the competition is fierce and prices are dropping rapidly.

Yet Apple is the only company selling iPhones so they basically have their own market.

 

[SSDGUY]

My concern with this, is a huge portion of what is keeping Apple going, is only the iPhone. Granted IMO it's the best mobile phone in the market, all things being equal, it will soon meet it's end. All things are like that. Even I as an Apple device lover can grasp this.

Question is, what is Apple going to do to diversify it's products?

You're talking about the company that brought the first real graphical computer interface, first portable music player that was worth owning, the first smart phone with a touchscreen, the first tablet that was reasonably groundbreaking, the Apple Watch (I'm not interested but many are) and supposedly a car. I wouldn't worry too much about them diversifying. If there is a truly "next big thing" to come around, I'll not be surprised if Apple will be the one to bring it.

 

[dampfnudel]

R.I.P. iPod :/

Unless things turn around, it will be R.I.P. iPad in a few short years.

 

[nando87]

Who else is minting enough profit to increase their R&D efforts, or buy promising start-ups with new product ideas, than Apple?

Their big expending these last years in R&D was, supposedly, the Apple Watch. At least for now, the Apple Watch is like everything else Apple sells, but even more: it depends on the iPhone, and because of that, on the iPhone sales. iPhone iPhone iPhone, everything is the iPhone directly or indirectly. Everything is directly or indirectly an iPhone accessory.

The electric car thing could be interesting however.

 

[iBug2]

Totally and completely. If they don't sell iPhones, they will sell even less iPads, less Macs, less services, less accessories, and less of everything. And you know it. The fact that they make huge amounts of money doesn't have to do with the fact that they depend on a single product and the fact that this product is unnecessary and they already sell tons. It's about growth.

Sorry but which product out there is necessary? There's an alternative for every tech gadget or service out there.

 

[firewood]

Look at them, Exxon Mobil, inevitable and necessary product, ...

Very few things (food, water, etc.) are really necessary. One survey showed a certain growing demographic would rather give up driving their autos than their fashionably new smartphones. Or would rather vote for crazy ideas like zero carbon emissions.

 

[OSX7]

Apple is doomed
Apple died with Steve Jobs
Apple isn't the same company that it was years ago
They have ran out of ideas
They can't innovate anymore
Only one port?! They are lagging behind everyone else, just look at the surface book.

Yet Apple's profits are higher and higher and higher, something is not right here, RIGHT?!
I just love Apple haters' tears every time they post an article like this to ground them into reality.