MacDailyNews presents live notes from Apple’s Q117 conference call

27 Comments

1. Not one word or question about the Mac.

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   1. It’s in the pipeline… 😉

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   2. That is VERY telling. I figure that means there’s nothing coming on the Mac side of any consequence.

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   3. Hackintosh or PC workstation here I come! (And no sale for Apple.)

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   4. .html

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   5. ”Apple had the benefit of a 14th week this year during the quarter.”

      In other words, their comparison year over year is bullshit since they had an extra week of sales here?

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      1. The “period” is the Quarter, and YOY periods are compared for all companies regardless of the appearance of a 14th week, which is a normal necessary accounting procedure (look it up).

         So… it is not “bullshit” to compare YOY qtrs. You just need to take the extra week into account. Cook was being transparent by noting the extra week. BUT… for accounting purposes, Q1 2016 gets compared to Q1 2017, regardless of the number of weeks in them.

         Cook’s pointing it out was,

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         1. Right. So when an entire extra week is factored in, doing some math reveals that Apple DECLINED YOY based on average revenues per week if shaving off 1 week in the current quarter for a fair comparison.

            This extra week is so misleading it’s absurd. A company cannot say it GREW YOY when in fact it is including an extra week. They would have to compare the exact same ending points to make that claim.

         2. I know it is a fluke, but it is a required accounting procedure. And as I said, Apple was up front in stating that they had an extra week in the quarter. It is what it is. View it however you want.

2. Yee haaaa.👍👍👍👍😎😃😃💥💥⚡️⚡️ 🍷🍷🎉🎉🎉🏄🏄🚀🚀🚀

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3. I’m shareholder and happy that the results are good.
   (haven’t sold a share for years and years unlike some like Eddy Cue who liquidated nearly all his Apple shares)

   Results are good but NOTE: there is AN EXTRA WEEK to this quarter compared year ago.

   Also the iPhone was boosted by Samsung, the only significant high end rival IMPLODING from exploding phones.

   And so my good feelings are tempered just as they were in the REVERSE direction during the quarters of doom and gloom prognostications following the giant iPhone 6 launch (analysts never correctly factored that one time event) .

   What I AM concerned about is the LONG TERM trends.

   The iPhone looks good especially the iP8.
   ( besides the new body, the big Chinese market would be attracted to the ‘8’ as to them it’s a lucky number. Chinese businessmen spend thousands on ‘8’ numbered license plates, addresses etc and a prestige phone like iPhone with 8 would be an immediate draw) New body, secondary incentives like the 8 number, people upgrading from 6 , it’s going to be smash hit.

   which translates to good accessory sales like EarPods and apps.

   etc.

   NOTE: Services is booming but a big part of Services revenue is APPLE CARE WARRANTIES. No hardware sales = no app, media and warranty sales.

   Worrisome trends are the Mac line, neglect of the eco system : routers, monitors (big attraction for mac users is SEAMLESS INTEGRATION of various products)

   for people who say Mac is OVER, note that Mac sales this quarter is 7 billion vs 5 b for iPad.
   Mac sales could be much higher if Apple didn’t neglect or mistreat it for years . Look at the slow updates and virtually no marketing (no marketing even during the Win 8 fiasco years). There are dozens of Apple Watch, iPad ads over the years vs the ONE ‘bulb’ Mac ad in spite of Macs good earnings. If Apple had paid full attention to Mac all those YEARS (of neglect) , I suspect the sales would have been easily 10 b or more vs 7 b now.

   Apple needs to fix the desktop and Pro line especially. (Right now top Macs have ONE QUARTER or less the GPU power of a mid range desktop PC card. Not even the new MBP costing thousands can play high end games at full resolution much less deal with certain pro needs like high end 3D rotation etc) . Like I said it’s also about the ECO SYSTEM. Even the lower selling Mac lines are important. Cutting the ENDS of the CURVE off means that the curve keeps getting smaller.
   ( Apple is going to have a ‘built to iPhone Standards’ billions costing new Campus and LG monitors and old Cheese Grater Macs under the tables like this pix of Ive’s studio late 2015? )

   

   Apple already has a kick ass OS in MacOS so there’s not like big development costs (like the Car) , so Apple should use it to the Max in products.

   Space precludes me from talking much about other worrisome trends: launched products supply constrained, issues with Cloud, Siri, iTunes (using it as an interface hub for iOS devices is a pain etc) , Pro iOS file system, bizarre things on the Apple store website (trying to buy certain Apple Watch items is an exercise in frustration, not to mention touting the 2013 non updated Mac Pro –with no price drop– as cutting edge flagship is laughable — the standard MP has 256 GB drive ! … ) , Apple TV (whats with the remote…)
   ETC.

   My conclusion : Good Quarter, gives Apple breathing room, Apple should regain focus and fix some long standing problems.

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   1. Oh not that picture again…

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      1. love that pix, shows so much! Stops people arguing with me immediately when they say ” Macs are of no use to anyone, pros can work with iOS devices alone and the Cylinder is GREAT and can do ANYTHING… etc “.

         (I’m not the one that made the INGREDIENTS possible for that classic pix– namely 6 year old MPs — last Cheeser model was the 2010 — in the THROBBING HEART of Apple . They must be using them for the upgradable GPUs because they can’t be trying to SAVE money right ?– billions in the bank, billions to make the Campus, and they MAKE the Cylinders — don’t think so, so fact they are using them (instead of Cylinders ) TELLs a lot.).

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         1. “Macs are of no use to anyone”

            It just shows that Macs are of use to people in that room 🙂 They’re not going to release a Mac Pro for 23 people!

            The better statement is Macs are of use to FAR fewer people than iOS devices. That’s because the vast majority of people don’t have complex needs that require a Mac.

         2. “They’re not going to release a Mac Pro for 23 people!”

            but they will make coffee table books, furniture for charities, Christmas trees (Ok that’s probably Ive and Apple designer Newson’s hobby but still… ) , sponsor fashion shows like the Met Gala, hold debates about Kanye West, make a mini series “sex filled romp of Dr. Dre’s Life” (the six episodes seemingly taking longer production than a two seasons of Game of Thrones) , protest about social issues that don’t have even remote connection to Apple ( I won’t specify as I’ve been called BOTH a Conservative freak AND a Liberal Nut) etc etc etc.

            I think the Mac Pro is more important than those things.

            People who don’t use them keep looking down on them YET NOBODY HAS EVER GIVEN ME PROOF THAT a Proper TOWER Mac won’t sell. Dell, HP etc keep making Desktops (HP especially recently innovating like crazy) , you would think they would stop making them if there was no market. (Mac Minis btw were Amazon top desktop bestseller for years ) Also please note Mac sales have LAGGED Windows PCs sales recently when they surpassed Win Growth for many years when Apple decided to neglect the desktops (besides the MP , they neutered the Mac Mini by dropping Quad core and making RAM non upgradable. Why do you need to make a DESKTOP non upgradable so they can be THINNER by an inch or something — fashionistaness gone crazy but that’s another topic…. ).

            Microsoft says they have shipped 300-400 million Win 10 licenses and their target is 1 Billion. With market share now at lowered 7% for Mac, there’s a HUGE market opportunity.

            ALSO: The reason aapl is ONE THIRD the PE of Goog/alphabet, (one of its PEERS) — i.e the stock would be 300+ and Not 100+ now if it had their valuation — is that big investors refuse to buy in because they say it’s a DANGEROUS ONE PRODUCT IPHONE COMPANY (your iOS ref I believe is about iPhone as Macs make more than iPad). Since Tim Cook has spent about $100 BILLION in buybacks etc to Boost the stock NOT SPENDING ON MACS to SAVE RESOURCES is CRAZY. (like I said I believe even TOWER desktops would make money). If TC wants to boost the stock a DIVERSE product line would do more than billions in buybacks.

            Also there is NEGATIVE HALO effect I believe, cut high end macs (and also the entry level minis) and people might start cutting other stuff because a company (like Apple) that need high end machines might not like a few high end Win/Linux workstations and then MacBooks etc, they might decide to switch everything .

            I can go on …..
            (oh Yeah GIVE US THE MYTHIC MID TOWER– between mini and Pro — MAC as well ! since I’m ranting I might as well go all out… !)

         3. talking about fears of one product iPhone company , I always find it weird that investors don’t consider Goog as a one product search company, maybe because their PR for crazy moonshot ideas is so effective .

            Also I think big investors believe iPhone is vulnerable (like Blackberry, Samsung exploding Notes) while Goog search has a wide moat. So anyhow DIVERSIFY the product line is in Aapl’s best interests.

         4. “The better statement is Macs are of use to FAR fewer people than iOS devices.”

            but perhaps this is because they have NEGLECTED the Mac?

            imagine a MICROSOFT forum:
            people would be saying (paraphrasing you) :
            “Msft is right in emphasizing Windows desktop because many more Windows desktops are sold than Windows Phones. ”

            perhaps if Msft. had NOT NEGLECTED the mobile market that would not be true?

            note that stats show that Phone Market growth is slowing just like PCs a few years ago.
            (people should sit back and think about this a bit before they beat up on the Mac and ‘the future is just iOS’… ).

            Also there is No reason , no lack of resources that prevents Apple from doing BOTH iOS and Mac.

            (the Mac desktop issues I believe is more fashionistas in Apple not wanting to do ‘trucks’ — look at the neutered Mini like I mentioned: make a DESKTOP RAM non upgradable so that it can be ‘thinner’ and more jewel like — than lack of sales potential )

            Not to mention WITHOUT MACS imagine the PR disaster if Apple Hardware Software had to be designed on Windows machines….

         5. (since I got some more time now let me add.. )

            I’ve not even talked about the ETHICAL ISSUES on continuing Mac Pro support.

            Many Pros listening to Apple’s Marketing Spiel that they are committed to Pros (Apple’s Photoshop shootouts with PCs, buying FCP, pushing the Cylinder… etc) . Abandoning pros, some of whom have spent tens of thousands on the pro eco system, now is sort of hypocrisy as Apple’s has touted it’s ‘ethical’ stance in helping minorities etc…. are OUTSIDE minorities more important than Customers? (and like I argued above I don’t even think a Tower would lose money ).

            Leaving Pros without updating (the non upgradable) Cylinder, not giving an answer whether it is discontinued ( do pros switch over to Windows, retrain their staff etc?) is bad form. The new MBP has quarter the GPU power of a mid range desktop PC card, for Pros needing high end GPU abilities there is no good solution now.

            If Apple abandons , betrays its pro uses it would really damage it’s ‘ethical’ front. (and that’s in addition to all the other good reasons I listed above for keeping up the Macs).

   2. I have a feeling 2017 will address a lot of our concerns…
      hold that thought and lets see what unfolds !

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      1. really hope so.

         If news is true the designer who masterminded the Cylinder has gone to work at Tesla….

         Most of the problems I listed I think are relatively to the complexity of something like ‘the Self Driving Car’ easy to fix if they focused.

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      2. Didn’t we say the same thing last year?

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   3. Yes, there was an extra week this year, but, last year, they got ~$550M extra from a patent infringement case that they did not get this year. That extra ~$550M pretty much makes up for the extra week.

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      1. That $550 M of which you speak is accounted for very differently than the numbers we are discussing. It does not fit into the direct comparison, especially when you compare product segments.

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         1. “Maestri notes that, while there was an extra week in the quarter this year from last, last year’s software and services revenue included a patent-infringement payment of ~$550 million, so that cancels out.”

            Source: http://blogs.marketwatch.com/thetell/2017/01/31/apple-earnings-expected-to-rebound-thanks-to-iphone-7-live-blog/

   4. Let’s do the arithmetic (I won’t call it math, it’s really that simple).

      If you scale the numbers back for a 13 week quarter rather than a 14 week quarter in order to do a direct comparison you get, in unit sales:

      iPhone: -2.8% year over year growth
      iPad: -24.7% year over year growth
      Mac: -6.1% year over year growth

      In gross revenue you get…

      iPhone: -2.2% year over year growth
      iPad: -27.5% year over year growth
      Mac: -0.3% year over year growth
      Services: 10.0% year over year growth
      Other Products: -14.1% year over year growth

      So with ALL of the product segments contracting except services on a year over year basis why is *anyone* celebrating? Hell on a direct 13 week comparison even the iPhone contracted! On a 13 week direct comparison even the unit sales of the iPhone contracted. On a 13 week direct comparison the only bright spot on the iPhone was the increase in average selling price ($694.57 versus $690.50, a 0.59% increase, which is barely positive, but positive nonetheless). Similarly, the average selling price for Macs went up by 6.14%, likely due to the radical increase in MBP prices and the pent up demand for the higher end models of those Macs.

      Now, one could argue that the extra week was the first week of the quarter (not the “average week” as I did it) so that the final results would not appear so negative. However, one could also argue that the extra week was during the holiday shopping period so that the best week needed to be excludes so that the final results would appear significantly worse than the way I did it.

      The only product segment that saw unmitigated growth was the Services segment. Does this mean that Tim and company are pushing Apple to become a Services company? Only time will tell.

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4. Apple is spread in too many directions.

   When Jobs came back in the 90s, he found product lines with myriad confusing models and features. He scrapped it all and illustrated it all by a little diagram. He drew a cross; above it, he wrote Consumer | Pro; on the side, he wrote Desktop / Portable. The resulting table contained iMac and Powermac, and bottom was iBook and PowerBook. Four models, with minor variants between them. Those were the four product lines of Apple, and the only stuff beside that were Studio Displays that were sold with those PowerMacs.

   Today, we have multitude of hardware, and for some of it, it’s unclear where it belongs. From iPods, phones, watches, to iPads, Macs, let’s not forget services and software, a spaghetti tangle of offerings far, far away from Jobs’s simple four-field table of Consumer/Pro Deskop/Mobile.

   I wonder if at least some of these product lines could be brought down and simplified with the same diagram….

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   1. Apple should focus on new/better Macs, reintroduce Apple displays, make APPLE TV great, before defocusing on new TV shows, etc.

      Sounds like they will be doing the opposite. 🙁

      As a shareholder I think the days of unusual growth are over …. UNLESS Apple fixes its focus and pulls some major new product area out.

      Augmented reality would be great, but the technological hurdles of a VR system are more realistic for now and a complete VR OS would be awesome!!

      Loving my Rift and wishing it had a full (Apple) OS and I could work in it. Would get more exercise standing and moving with that too. This seems like a huge opportunity Apple might be missing.

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