Apple is single-handedly bringing down tech sector profits

“The sheer size and volatility of Apple’s earnings are tipping the technology sector’s earnings the wrong way,” Rayhanul Ibrahim reports for Yahoo Finance. “Currently, the technology sector’s earnings are projected to decrease by 3.9% year-over-year, based on analysts’ EPS estimates.”

“Over the past six quarters, Apple has single-handedly controlled the tech sector’s growth rate. Back in 2015, the tech sector would have been in the red every quarter without Apple,” Ibrahim reports. “This influence is most pronounced back in Q1 of 2015, where earnings would have declined by 4%, but instead increased by 3%, thanks to Apple.”

“However, this trend is now hurting the tech sector. The aforementioned 3.9% expected decline turns into a 2.2% gain in the second quarter, once you strip out Apple earnings,” Ibrahim reports. “Investors may not need to worry for long, though. Right now, Apple is on the ‘S’ refresh of its iPhone upgrade cycle, and sales generally decline during this phase as the ‘S’ refresh generally doesn’t have as many new features or as unique a design.”

Read more in the full article here.

MacDailyNews Take: We’ll have to see about this “iPhone 7” family which, if rumors prove correct, won’t have much of a unique design (exterior) vs. the iPhone 6/6s families.

Even without a unique exterior design, there is much pent-up iPhone demand just waiting for the iPhone 7.

Analyst: Apple’s iPhone 7 will see 12% growth over iPhone 6s – July 11, 2016
Study: Half of all current iPhone owners will upgrade to Apple’s next-gen iPhone – July 7, 2016
Pacific Crest: iPhone users grew by over 70 million during the iPhone 6 cycle and will drive significant growth in upgrade volume – May 23, 2016

[Thanks to MacDailyNews Reader “Tom R.” for the heads up.]


    1. And they have been propping up the USSA for 8 years by showing a profit instead of a loss and keeping Wall Street above water. The only company that survived (and thrived) during the Great Depression of 2008.

  1. Apple is “hurting the tech sector” because investors can’t look at a balance sheet with and without Apple?!?!?

    I thought computers were supposed to fix that problem.

  2. For iPhone7 hardware, its all about the camera. Apple has kept the camera improving with each iteration and this is something that can entice people to upgrade (including me!). Faster is great too, but camera improvement is very concrete. I can see why the same would not work for iPad, since it isles common (for most) to rely on the iPad camera.

    1. The camera benefits from 64bit. Speed has always been important to cameras. The 64bit also helps in editing. The iPhone is not just a camera, it is a whole photo lab.

  3. Am I the only one who thinks that the S year has almost all the time the great features?
    3G, Siri, Touch ID, 3D Touch?

    It’s really odd to read all the time that the S year has nothing to offer just because they don’t change the case for the sake of change.

    1. MDN would argue that it isn’t about the case, but the ‘S’; keeping it an iPhone 4 and adding S (or 5, or 6), the perception is, this is the same iPhone 4 (or 5, or 6), with just a few little improvements, while changing from 4S to 5 (or 5S to 6, etc) is a major change. When you make the next model look the same, AND then call it the same (and just add the ‘S’), people think it IS (almost) the same.

      Had all the phones been simply incrementally numbered, we would have been on iPhone 10, and the perception that the change was minimal would have been significantly weaker.

    2. There’s only so much you can do to change the outside look of a phone which mainly consists of a large glass touchscreen and minimal bezel. The current designs are well loved and proven, so there is no compelling reason to change them just for the sake of change.

      What makes an iPhone special is the stuff on the inside. If you upgrade the insides, you definitely get a better iPhone. If you only change the outside, what you end up with is a different looking iPhone. However there are a hell of a lot of people who make judgements primarily based on the look of things.

      As for iPhone numbering, I think that Apple should simplify things by using the year number, so the next iPhone would become iPhone 17. By doing that, they aren’t rigidly locked into the tick tock upgrade cycle and can make changes according to whatever technology and manufacturing techniques become available each year. Every tear’s model will be perceived to be a genuine new model, rather than some shallow people dismissing them as just a minor update during ‘S’ years.

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