Apple’s earnings report shows company is more than just an iPhone maker

“Despite soft iPhone sales in the holiday quarter, Apple topped Wall Street’s profit target and reported record earnings,” Patrick Seitz reports for Investor’s Business Daily. “The Apple earnings report showed that the company is more than just an iPhone maker as other businesses picked up the slack.”

“Apple earned $4.18 a share on sales of $84.3 billion in the quarter ended Dec. 29,” Seitz reports. “Analysts expected Apple earnings of $4.17 a share on sales of $84 billion. On a year-over-year basis, earnings per share rose 7% while sales fell 5%.”

“Services were Apple’s second-largest business last quarter, making up 12.9% of total revenue and growing 19% year over year,” Seitz reports. “On a conference call with analysts, Apple Chief Financial Officer Luca Maestri said Apple has an active installed base of 1.4 billion devices. That includes 900 million iPhones in use, he said. Apple’s services generated a new all-time high of $10.9 billion in the first quarter. Its services include Apple Music, Apple Pay, iCloud, AppleCare and other offerings.”

Read more in the full article here.

MacDailyNews Take: iPhone still accounted for 61.7% of Apple’s total revenue for Q119, but the company has always been more than just “the iPhone maker.” Uh, hello, Macintosh? iPad? Services? It’s just that iPhone is so large, it often occludes all else to those who don’t or won’t look beyond it.

24 Comments

    1. The calm before the storm.

      If more than 60% of your revenue comes from one product, you are heavily dependent upon that product. And with Tim Cook in charge, nothing will change.

      They already admitted that it’s all downhill from here. They will be forced to cut prices everywhere, so gone are those ridiculous margins. The sheeple are now awake and it’s a new day.

      Competition abounds. The iPhone X is my last Apple product until they get rid of Cook. No reason to upgrade my iPads, they are all the same.

      Now comes the stock market porn show. The big investors will pump the stock for awhile, right before pulling out… then the small investors get splooged in the face when AAPL drops below 100, heading for 50 bucks.

      1. Nothing like making stuff up and then whining about that. Nice job.

        By the way, what is your vast business experience that makes you SUCH an expert on how to run a massive trans-national corporation? Please do share. I’m sure it will be fascinating.

        1. @Sean

          Don’t you have some guy’s knob to polish?

          On MDN, it’s best if you are not seen and definitely not heard.

          That’s all the world needs, another Tim Cook teabagger. I can see you and “Jimbo the Nutjob” doing double duty on Cook’s family jewels.

          🤠

          1. I think a bit of sanity is all people ask for, not a quality you seem overly acquainted with. Let’s be honest here Tim Cook might be reminiscent of RoadRunner of late but your efforts are pure Mickey Mouse by comparison. Perhaps you should start a double act what do you think.

          2. Ah, ZeroRandy proves his/her ZeroBrainpower yet again.

            Zero – it’s for when you’ve hit rock bottom and get you’re so randy you’re jealous that a dog can lick it’s own balls, but all Zero is left with is Zero.

      2. Wow you do speak occasional words of sense between the B movie drama queen stuff. But I have to ask when did Cook admit ‘it’s all downhill for Apple’ then? Or maybe taking the Horror movie narrative even further I reckon you are an extra from Invasion of the Body Snatchers and I claim my $5. You could have been a contender there until you totally lost the plot so I suspect that you wrote that before the earnings report expecting the figures to be far worse and thus your hyperbole to look less insane. It’s all in the editing.

        1. @spy

          Look at their revenue forecasts for Q2.

          That’s right, the gravy train has finally come into the station. Apple is set to start cutting prices abroad and you know they will have to do it statside also.

          Apple’s not the only game in town. You can buy an adequate used smartphone for a couple hundred dollars. Even die hard fanboys aren’t upgrading yearly.

          Ya, Apple has a problem.

          That problem has a name.

          The name is…

          1. So your qualifications for going on and on and on and on about what is wrong with Apple are… ?

            How big a business do you own and run?
            Or do you even have a minimum wage job?

  1. Just an iPhone maker? Really? Apple still has one of the lowest P/Es of any major tech stock of the S&P500. It seems as though it’s not even being valued for its iPhone business. It’s just strange how Apple is being valued. Certainly not as a tech company or a retail consumer company. I can’t seem to figure out where Apple sits as a company. It seems to be valued for overall zero growth or declining market share as near as I can tell.

    I’m not complaining. I’m just not entirely sure what Apple has to do to change its value. Acquire an entirely new business or possibly come up with some entirely new product? Apple still has a lot of cash to spend so an acquisition would likely be the easiest thing to do.

        1. But all that explains is why it’s the epicenter.

          On the other hand, people carry Androids with them all day. Apple chooses not to participate.

          That’s their right, but the iPhone is the epicenter. And that’s a vulnerability. All in or all out cuts both ways.

          1. That’s why Apple has a diverse range of product and services, unlike you stuck on repeat like a broken record.

            You, Zero Randy, Doop Snogg, Von Dumboj and other haters are all in one circle jerk.

      1. No comment on financials, …

        Well, I will.

        Buried in the fine print on “Services” is a statement that revenue from iPhones (and Macs) are being shifted into the Services column, as a way for the hardware sales to “pay for” the costs of providing Maps, Siri, etc.

        This is fairly logical approach, but a side effect is that it also very much serves to mask/hide the degree of product mix imbalance at Apple…especially since we don’t know the value of that number.

        Specifically, as per Apple’s CFS, the iPhone earned $52B of the $84B last quarter, which is 62.7% of the total company.

        But since this $52B is after this “skim off” to pay Services (which was $10.9B), to get a better picture on the actual percentage, we need to guesstimate a value and work it backwards.

        For example, let’s assume the skim is 10%. That means that iPhone sales revenue was actually ($52B/.9) = $57.8B The implications of this are that iPhones weren’t 62.7% of total revenue, but were actually ($57.8B/$84B) = 68.8% (!)

        Thus, it is revealed that Apple is even MORE of a “just an iPhone maker” than the top line numbers had indicated.

        TL;DR: this is why it is bogus to claim that the ‘Services’ revenue line really represents a different and diversified portion of the corporation – – namely because it is directly tied back to existing hardware and their sales.

        1. Oh, and one other thing:

          Note that in addition to us not knowing just what percentages Apple is skimming off, we also don’t know (and should not assume) if the percentages between different products are the same.

          Logically, there’s a good argument to be made that devices which use the services more should pay more – – it would be trivial for Apple to cross-reference Siri/Maps/etc calls back to their server to the type of device and then use this to pro-rate the mix. For example, if iPhones are 90% of the usage of Siri/Maps/etc, then 90% of the Services division’s costs would be “taxed” to the iPhone line (and similarly, the remaining 10% gets paid by Mac, iPad).

          Using this perspective, we can also calculate a “worse case” scenario for this iPhone revenue imbalance risk, simplistically by just assuming that 100% of the Services income came from the iPhone being taxed:

          (($52B + $10.9B)/$84.3B) = 74.6%

          Thus, we know: the iPhone’s percentage of total revenue isn’t as low as the ~63% as implied by the $52B “after-skim” value in the CFS, but it also can’t be any higher than ~75% as per our ‘worse case’ total cost shift.

          Just where it is would take some more digging; but a rational guess would be halfway to 62%; call it in the ballpark of 70%.

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