Q316 earnings signal new direction for Apple

“In the first nine months of 2015, Apple’s total sales was $73.08 billion in 2015 and this year it has only made $66.45 billion, a full $6.6 billion less than it did last year,” Shudeep Chandrasekhar writes for GuruFocus. “The sales decline was not a country-specific or region-specific one.”

“On the product side, iPad picked up some momentum during the quarter, and revenues from the tablet increased by 7%. As iPads are more expensive than iPhones, they provide better margins for the company,” Chandrasekhar writes. “Although iPad revenues increased, the total number of iPads sold actually went down, which means people are buying the higher-priced ones. That’s a positive sign for the company; it will help expand its margin even though sales were 9% down from the year-ago quarter.”

MacDailyNews Take: Better, even more powerful and capable iPads (with more RAM) and “iOS Pro,” please!

“Sales of iPhones are responsible for more than 50% of Apple’s revenues, and this is the segment that will determine the company’s overall performance. During the third quarter, the company started shipping iPhone SE, the low spec/low cost iPhone, which was lapped up around the world with demand outstripping supply through the quarter,” Chandrasekhar writes. “When you sell more products at a lower price point, your margins are, of course, going to take a bit of of a hit. The average selling price – or ASP – for iPhones was $595, a full $65 less on a year-over-year basis, though the company attributed $20 of the $65 to foreign exchange. Apple expects ASP to improve next quarter.”

“Right now, Apple is at a point where it has the opportunity to grow users,” Chandrasekhar writes. “If it can do that while increasing revenues at the same time but lose a few percentage points on margins, it should double down on that.”

Read more in the full article here.

MacDailyNews Take: iPhone SE is not a “low spec” iPhone. That is in large part exactly why it’s successful. iPhone 5C “failed” to achieve the same measure of success as the SE precisely because it was a “low spec” iPhone.

11 Comments

  1. Something for all the analysts and trolls who think Apple is a one trick pony and has no long term plan to consider… and probably ignore. I’ve said before, only the executive team and some of the BOD have any idea about everything Apple is developing for the future. You think they’re gonna tell you about it before hand so the slavish copiers can get a head start?

    1. Apple certainly has not offered for sale anything that I consider new, innovative, and distinctly Apple. Besides, once these mysterious products are released they no doubt will be imitated. Apple can’t fear imitation as a reason for innovating.

  2. $6.6 billion decease, yes, decrease. Tim Cook had certainly been innovating “like crazy” because no sane person would agree that this trend is acceptable. Personally, I think Timmy’s efforts will be too little and too late. I see Tim Cook’s attempts to reverse Apple’s decline as boardering on desperation. Sleep well, Tim, and start updating your CV.

          1. How you liking Apple’s new diection…negative trend. Very impressive, actually. I never expected Tim Cook to f@ck things up this badly. The man does have some hidden talents.

  3. Innovating “like crazy” is great. I just want them to have more frequent product updates of the Macs, too. I see no reason for them to not keep improving existing products (also in declining in sales volume), even without new CPUs from Intel (Mac Pro, Mini, Air, Macbook Pro….)

    1. Yes more love for the Mac!

      In my view, Apple should release updated MacBook pros, iMacs, and Mac Pros with the latest and fastest Intel processors within 60 days of each new processor generation’s release.

      In addition, I think it is time for Apple to give the “I.T. Doofuses” what they think they want: a small computer with two HD/SSD slots, upgradable memory, upgradable graphics chips, and centralized deployment.

      Most importantly Apple needs to provide a long term road map for the Mac product line for business. Right now, if you go out and deploy a large quantity of Macs (with software) you REALLY DON’T KNOW if Apple will exit the business market. It is possible that the Mac will only be used for iOS development. Given the over 2 years since the last Mac Pro update, this is the message Apple is sending.

  4. “In the first nine months of 2015, Apple’s total sales was $73.08 billion in 2015…”
    total bullshit, that’s maybe just iphone sales.
    “As iPads are more expensive than iPhones, they provide better margins for the company…”
    total bullshit. iPad ASP is LOWER, and their margins are lower too.
    “…even though sales were 9% down…”
    total bullshit. unit sales were down.
    with so much sloppyness, it’s no wonder you can’t trust analysts. Maybe he puts his beliefs ahead of facts, like some other people do…

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