Tim Cook Says iPhone Activations Set New Christmas Day Records in United States and Canada

[AnthonyG6]

Did you even read the letter? They are going to hit revenue records in many markets. They hit a Christmas Day iPhone activation record. Until that changes, why would they drop prices?

I did read the letter and I did notice that statement about record Christmas day activations. What I also noticed is that it didn't say how many of those activations where iPhone Xs' and how many were iPhone Xr's. But I would bet my bottom dollar that most of them were the cheaper Xr, because why...because it's more affordable by more people!

 

[0837990]

The best phones ever made doesn't really matter when the prices hit the level they have hit. I can easily afford iPhones at the current price, but I'd rather spend that large amount of money on something that gives more back. My iPhone 7 can still easily do everything I want out of a phone. I just upgraded from a 2017 MBP 2.9 to a 2018 MBP Vega 20 fully maxed out except the SSD, because the upgrade will make a big difference to my work, video editing, photo editing, gaming, studies, development, and so on. I'm not reluctant at spending money if the return is worth it.

My phone on the other hand... Is just a phone. It's a time waster device for whenever I just need to browse something to keep myself busy. And for that purpose any phone these days gets the job done easily. Just got a new battery in the 7 as well, and I foresee keeping it until it falls apart completely. The day the new iPhone gives something really worth it back, then I'll consider an upgrade. At this stage I would upgrade my computer, Nintendo Switch, PS4, TV, router, camera, lenses, and mostly everything else before I would upgrade my phone.

Some people "live on their phone" so I understand they would want to upgrade.

 

[greenmeanie]

We are not buying the reason for the stock going down LOL.

Why should they?

The margins on iPhone are far smaller than most Android devices. Additionally, the price is the price. Don't like it don't buy it.

[doublepost=1546529425][/doublepost]I agree Huawei has my attention.

This "issue" with the the Chinese market can be summed up in one word, Huawei. In China, even though that is where most iPhone models are manufactured, the iPhone is not viewed as a Chinese product. Huawei is. There is a strong nationalist feeling among many Chinese consumers that to own and iPhone is anti-Chinese. There are Chinese companies that have actually threatened to fire employees who have iPhones rather than Huawei phones. And the arrest recently of the Huawei CEO while visiting Canada has not exactly been well received by the Chinese public.

 

[Cosmosent]

AAPL's current situation is a direct result of AAPL Over-Playing their Hand, & Buying-Into their Own Hype.

Nothing more, nothing less.

If AAPL truely wanted to pivot to a Services company, they would offer a (viable & credible) new $649 USD iPhone every Sept, with a MIN of 3 GB of DRAM, & certainly would have done so in Sept of 2017 & 2018.

Peak iPhone is NOT a thing of the past ... it does require considerably better Product Planning from AAPL's Upper Mgmt, however.

AAPL set themselves up for a potential major disaster ... AAPL's Board may need to take action to prevent that disaster from occurring.

 

[Defthand]

So much of the leadership’s compensation is stock shares. No wonder they’re sounding an alarm despite record U.S. sales. It wouldn’t surprise me if Cook does anything possible to appease investors, then bails once the share price is restored to its former high.

 

[genovelle]

I am really hopeful the trade issues will sort themselves out.

Everyone loose as this is based on a ideology that is based on a 20th century market. A market where most of our companies only sold in our market and had very limited access to the rest of the world. In the age of e-commerce and Amazon companies that could not leverage the global economies of scale are vanishing at an increasing rate. Those that support this idea fail to realize they are paying the tariffs not the targeted countries involved.

 

[femike]

I was hoping for a huge dip so that Apple could change. It seems they are happy with relying on the iPhone and its associated services then. Even the iPad plays second fiddle.

I'm just as interested in the other products that Tim is not interested in or has shown little interest in or has cancelled, eg, mac mini (this upgrade is pathetic), user upgradeable headless mac, screen, router, keyboard/mouse/trackpad with AA batteries, 17in matte screen laptop, move advanced in macOS, etc

 

[haydn!]

Surely this is effective damage control!

Right?

Partially yes, but also reassurance for staff too.

Having worked in an industry where the media love to attack you for the last 15 years (energy retail in the UK), negative media, however just, can be incredibly demoralising for staff who 99.99% of which will be working their asses off and providing the best they can.

 

[pappy53]

Actually Samsung throttles phones all the time, UNLESS a benchmark is running, then they run wide-open. Samsung says this is for reasons of battery life. Apple only throttles when the battery degrades. Apple is way ahead here. The issue is poor choice of battery. It's not actually up to the job, and still Apple is way ahead.

And you have proof of Samsung doing this?

 

[truthertech]

Let's see how "disappointed" come September.

Translation: We will increase prices to make up for short fall.

That's not how business works. Business 101 folks.
[doublepost=1546533672][/doublepost]

Apple can reduce the high price of its phones. I see little value in buying a phone costing over $1k. I'll keep my SE - thanks to the cheap battery replacement I got late last year.

People are missing the point. You and your SE are not of concern. Sales everywhere but China are doing well, indeed record activations in America and elsewhere. China's economy is in trouble.

 

[ksec]

Due to construction at Apple Park

For Christ Sake, they have been spending / wasting so much time on it, when it that bloody thing going to be done and get over with.

And no one has mentioned how the trade war and capture of Huawei CFO trigger wider issues where companies were forcing their employees off the Apple platform in support for Huawei. It has NOTHING to do with China's economy.

India needs Apple, Apple needs India, there is no better excuses to diverge off from China's supply chain hold.

 

[haydn!]

That's not how business works. Business 101 folks.
[doublepost=1546533672][/doublepost]

People are missing the point. You and your SE are not of concern. Sales everywhere but China are doing well, indeed record activations in America and elsewhere. China's economy is in trouble.

“Predominantly China”

Upgrades are lower than expected in established regions also - as said by Tim himself. A record breaking single day, does not make a record breaking quarter (clearly).

Is this SE related? Probably not. Is this people not wanting to pay £1k for a new phone every 12-24 months. Yes.

 

[LordVic]

AAPL's current situation is a direct result of AAPL Over-Playing their Hand, & Buying-Into their Own Hype.

Nothing more, nothing less.

If AAPL truely wanted to pivot to a Services company, they would offer a (viable & credible) new $649 USD iPhone every Sept, with a MIN of 3 GB of DRAM, & certainly would have done so in Sept of 2017 & 2018.

Peak iPhone is NOT a thing of the past ... it does require considerably better Product Planning from AAPL's Upper Mgmt, however.

AAPL set themselves up for a potential major disaster ... AAPL's Board may need to take action to prevent that disaster from occurring.

I think this is an important point:

Services revenues require installation base and market share. Or you will always have a limited market in order to sell your services.

As long as Apple's bulk of their services are tied directly to iOS/MacOS without compatibility outside the ecosystem, any loss in market share, or loss in volume of iPhone is going to negatively affect their service revenues as well.

if in 2 years, Apple is selling 30% less iPhones, that means there's 30% less devices for their services to work on.

Building a service business, while limiting your customer base due to high priced devices for those services doesn't inspire me with a lot of confidence. Especially in a downturning economy where consumers will have less disposable income to part with.

in some markets and economies, it's better to lower profit margins and overall profits slightly, to gain long term market share growth, than to milk every current customer for as much as possible.

a GOOD CEO can balance this act. A Good CFO and bad CEO will not care and attempt to maximize profits above all else today at the cost fo tomorrows business

 

[genovelle]

AAPL's current situation is a direct result of AAPL Over-Playing their Hand, & Buying-Into their Own Hype.

Nothing more, nothing less.

If AAPL truely wanted to pivot to a Services company, they would offer a (viable & credible) new $649 USD iPhone every Sept, with a MIN of 3 GB of DRAM, & certainly would have done so in Sept of 2017 & 2018.

Peak iPhone is NOT a thing of the past ... it does require considerably better Product Planning from AAPL's Upper Mgmt, however.

AAPL set themselves up for a potential major disaster ... AAPL's Board may need to take action to prevent that disaster from occurring.

[doublepost=1546534865][/doublepost]

AAPL's current situation is a direct result of AAPL Over-Playing their Hand, & Buying-Into their Own Hype.

Nothing more, nothing less.

If AAPL truely wanted to pivot to a Services company, they would offer a (viable & credible) new $649 USD iPhone every Sept, with a MIN of 3 GB of DRAM, & certainly would have done so in Sept of 2017 & 2018.

Peak iPhone is NOT a thing of the past ... it does require considerably better Product Planning from AAPL's Upper Mgmt, however.

AAPL set themselves up for a potential major disaster ... AAPL's Board may need to take action to prevent that disaster from occurring.

I guess the fact that China is the primary culprit and Tariffs that were Promised not to apply to Apple products is effecting them and one of their largest markets China has nothing to do with it. Especially since sales here and other countries are fine. Yeah you are so right.

 

[technole]

Upgrades are slower in US, of course they'll be slower in other parts of the world too. Still, as long as iPhone 11 and iOS 13 has something substantial to get people off of 6/7/8 they'll rebound quickly.

For Christ Sake, they have been spending / wasting so much time on it, when it that bloody thing going to be done and get over with.

Apple Park is not at full capacity yet. Most businesses with new campuses are like that, they don't get the master plan done for years even when the first building goes up.

 

[69Mustang]

Per Tim’s memo to employees:

it sure seems like this is mostly a China problem but people want to attribute it to whatever gripe they hav about Apple. Of course it being mostly a China problem shouldn’t be brushed off either. If Apple is not growing in China that’s a huge problem. The question is, is there a fundamental problem with China (economy slowing down, less consumer loyalty to a specific brand) or is it the current trade issues between China/US or a combination of both?

Cooks address to investors pointed to China and a host of other things that lead to where we are. You can't ignore all of the other reasons he cited. China can be the primary reason, but it doesn't negate all the other reasons either. Apple has a bigger problem than just China. Mind you, China is a BIG problem. Just not the only one.

Regarding that employee memo. Look at quote for what it actually says and not what it implies. They set a record for XMas Day activations? A one day activation record? That means what exactly. It certainly not a sales indicator.

They expect to set revenue records in certain markets. Apple has proven it's more than possible to have higher YoY revenue AND lower sales. They've done it before by simply raising prices... which they did.

His memo to the employees is as purposely suggestive as it is intentionally devoid of actual information. The purpose of the memo is to provide a canvas for the recipient to paint their personal narrative. Some will see what he said as possitive, others as negative, and neither will be right or wrong because he actually doesn't say anything relevant.

 

[rtomyj]

So you numb nuts gonna keep saying it’s the price? Realize that Apple is building a phone that’s good for 5+ years. Apple knows this and made their phone more premium at a higher price. Don’t like it? Go to Android. I’m sure $1000 for a Samsung note and $850+ for a pixel is sooo much better with their 2 years support.

The fact that phone activations are up during Christmas, during trumps trade war, during an S release should tell you all everything.

Also;
External forces may push us around a bit, but we are not going to use them as an excuse. Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple's mission — delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger.

This Is great news.

 

[dgdosen]

So who's live-blogging the all-hands meeting?

 

[Stella]

No, people are not missing the point at all.. seems like you haven't been paying attention (1) to what Tim stated and (2) to what people have been replying to your post.

That's not how business works. Business 101 folks.
[doublepost=1546533672][/doublepost]

People are missing the point. You and your SE are not of concern. Sales everywhere but China are doing well, indeed record activations in America and elsewhere. China's economy is in trouble.

 

[Skeptical.me]

In all honesty it could very well be the ridicules prices Apple are charging for a new iPhone model, and maybe innovation. I mean I still love Apple products but they don't seem to be making the great strides they use to make in innovating. Its like things just got bigger, smaller, a notch, and Pro slapped after the name lol

 

[haydn!]

So you numb nuts gonna keep saying it’s the price? Realize that Apple is building a phone that’s good for 5+ years. Apple knows this and made their phone more premium at a higher price. Don’t like it? Go to Android. I’m sure $1000 for a Samsung note and $850+ for a pixel is sooo much better with their 2 years support.

The fact that phone activations are up during Christmas, during trumps trade war, during an S release should tell you all everything.

Also;
External forces may push us around a bit, but we are not going to use them as an excuse. Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple's mission — delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger.

This Is great news.

Activations up on ONE day in 90 day period tells us nothing. That is Apple pushing out positive news to offset the negative announcement.

They’ve said themselves upgrades overall are down in the US this quarter.

And, to your point about not liking it, go elsewhere. That’s the point. People are choosing to go elsewhere... and it’s hurting Apple’s bottom line.

 

[B4U]

of course it did. i bought all of my kids some iphones and i have a lot of kids. northwest, southwest (not the airline) and eastwest. i got them all the xr. kim said not to spend too much on them. i used one of them to take the selfie in my profile pic. feeling cute but might delete later idk.

You know, Northwest was an airline also.
And what is EastWest?!

 

[SoyCapitanSoyCapitan]

From now Macs should be updated more often and have more built to order options to keep prices competitive with PCs. We need to go back to when selling Macs was very important.

 

[Rob_2811]

Do you have any facts to back up your statement about margins?

Of course not because it's not even close to correct.

Apples margins are more than double Samsungs on smartphones according to Strategy Analytics. Apple took a 32.4% margin for the year in 2017 as opposed Samsungs 11.6%. Not sure if they've published numbers for 2018 yet.
[doublepost=1546543912][/doublepost]

That's not how business works. Business 101 folks.
[doublepost=1546533672][/doublepost]

People are missing the point. You and your SE are not of concern. Sales everywhere but China are doing well, indeed record activations in America and elsewhere. China's economy is in trouble.

If that was the case why did Cook provide a whole list of reasons for their revised guidance? It wasn't just China that was cited.

While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.

https://www.apple.com/newsroom/2019/01/letter-from-tim-cook-to-apple-investors/

 

[Theophilos]

I'm sorry to write this, but it's about time. Apple has been mismanaged ever since Steve Jobs' passing. Tim Cook thought he could hitch Apple's wagon to pop culture and thereby win the mainstream through supposedly "courageous" policies on social issues and the environment, but what he actually accomplished was the destruction of Apple's focus on innovation. Even worse, he isolated and lost Apple's faithful creative core when he ceased to take the Mac seriously and essentially pushed professionals to embrace powerful PCs as the only option when no equal Mac was being produced.

These are all ideas that will be reflected in a decade by the author who writes the book on Apple's spectacular decline.