Thursday Morning News


#1

Originally published at: http://appletalk.com.au/2018/08/thursday-morning-news020818/

A different set of graphs of Apple’s Q3 2018 financial results from MacStories tells us a slightly different story to what we saw yesterday. I’m looking at the numbers and wondering why there’s a minor difference between Six Color’s graph of revenue by category and the one by MacStories, given that they should be drawing from the same data. Anyway, at 46%, almost half of Apple’s revenue came from the Americas, with Europe at 23% and Greater China at 18%. The Mac saw a 13% revenue change compared to the same quarter from last year, but more on this in a sec.

If you put aside the fact that Apple continues to generate and make incomprehensible amounts of money, further analysis on Apple’s quarter reveals some insights worth pointing out. For example, revenue from iPhone sales is now as high as it has ever been, despite iPhone unit sales being comparatively low. The reason is a way higher average selling price, which I’m sure matters to some bean-counter somewhere. There’s still no hard numbers on Apple Watch sales, but the future is clearly services anyway.

The full transcript of the post-results earnings call is over at Seeking Alpha, if you want to read everything said between Apple CEO Tim Cook, Apple CFO Luca Maestri, and the analysts present. We’ll be including some related commentary below.

For starters, Cook explained why Apple is going ahead with making original TV shows. He talked about this cord-cutting idea, which I presume is the idea that less and less consumers subscribe to cable TV services in light of Netflix and co. Anyway, because Cook thinks cord-cutting is only going to increase and at a much faster rate than we previously thought, Apple’s taking a bet and getting ready for that.

Cook also had words about the smartphone market given that smartphone sales aren’t just what they used to be, now that everyone has a smartphone. Cook believes the smartphone market is still “very healthy”, saying that “whether it grows one percent or two percent or five percent or six percent or 10 percent or shrinks one or two percent, it’s a great market because it’s just huge”. Cook also said that Apple has never performed analysis on how the iPhone battery replacement program has affected sales of new devices, because they don’t care, and it’s about doing something for users.

When it comes to the Mac, things aren’t looking great. Mac sales were the lowest of any quarter since 2010 and the first time less than four million Macs were sold in a quarter since 2013. MacRumors attributes this slump to the fact that almost the entire Mac lineup was outdated, but if recent rumours are anything to go by, we should start seeing updated Macs just around the corner.

Both MacRumors and 9to5Mac point out analyst Neil Cybart’s reasoning that new Macs were released at WWDC last year, as well as this year’s MacBook Pro refresh, as possible reasons for the 13% drop in revenue. It’s entirely possible Apple could do the same thing with Macs that it has done with iPhones; suffer decreased unit sales, but increase the average selling price to increase revenue that way. With Macs being as expensive as they have ever been, maybe that’s an option.

Meanwhile, AppleInsider highlights that Apple’s R&D spend is higher than ever before. Apple spent US $3.7 billion on R&D in the last quarter, with the year total coming in at $760 million more than last year. The increase in R&D spending for the 15th consecutive year doesn’t necessarily correlate to anything in particular, but if it did, it could mean that that Apple knows the iPhone won’t remain their cash cow forever.

Continual monitoring of heart rate by the Apple Watch continues to save lives, with the latest case being that of 24 year old Australian Adam Love. After receiving a notification that his sleeping heart rate was between 130 and 140 beats per minute, Love visited a doctor and was diagnosed with a hole in his heart, a condition he had apparently had since birth.

Four million people are using Apple’s public beta program and currently running a beta version of either iOS or macOS. I think that’s kinda cool.


#2

They’ve already done this with the new MacBook Pros haven’t they? I don’t recall the previous models being as expensive as the new ones. And lets face it - it’s not like Apple’s markup on items is overly small!


#3

I agree, they’re moving the MacBook Pro range Upmarket and positioning the MacBook as ‘premium ultra portable. And they’ve already killed off the entry level MacBook Air 11inch.


#4

Whatever happened to the $999 (USD) MacBook/MacBook Pro deal (ahem, my 2008 MacBook White, my 2010 13" MacBook Pro, my 2012 13" MacBook Pro). This used to be a thing, and it was a thing that made me purchase new MacBooks on a two to three year cycle. Now? Not so much.


#5

I remember when the AU$ was strong against the greenback. It was nice to have cheap(er) Apple products, also was a great time to pick up an even better bargain in the US.


#6

The second hand market should be healthy, as the fanbois buy new gear. Might see whats what there in a few months, rather than persist with my old old hardware.


#7

The problem with the 2nd hand market - when you are wanting to buy - is that they retain their value pretty well. Of course, that’s also a blessing if you buy new and want to sell off to help finance an upgrade… :slight_smile: Though more and more of us will be going 2nd hand if Apple does opt to increase pricing on their Macs even higher. Given Cook’s comment on price not being a consideration when making a computer - I wouldn’t be surprised if prices do go up.

I think if anything this all backs the thought that Apple is less interested in the Mac. If your R&D budget is around $14b pa, and Macs are only contributing a small % of your revenue - you wont be spending a lot of that budget on Macs… And if you aren’t spending money on R&D for Macs, then less people will buy them…

Ok - sure, that’s not based on any real fact - whoever the hell is in charge of the Mac division at Apple could well put a case forward to get a big chunk of the R&D pie in order to revamp the brand - but I’d hazard a guess without involving Google that the average person is more likely to own a mobile phone and/or tablet than a laptop/desktop computer…

Ahhhhh couldn’t resist.

Computer / Smart Phone Ownership - USA

  • 86% of US-households have a computer = 108.56 million households (approx 10m being Mac - ie 10% of the market)
  • 77% of people have a smart phone = 250 million people (approx 109m being iPhones - ie 43.5% of the market)

* Figures are based on vague internet research only, and should not be considered Pub Quiz Worthy.


#8

It is my experience that whilst the majority of households have a computer that many of them are (more recently) education purchases or work related and that households are more likely to have multiple phones (and replace them more often) than they are computers.

Of course that is biased by my experience and there will be exceptions.


#9

Also, @cosmichobo, there’s the problem of regional market disparities. In Japan, the prices of used Macs are so ridiculous that it’s NEARLY worth it to pay the shipping from Australia, UK, or US.

I’m angry at Apple not just for the poor state of its offerings, but the fact that it no longer really makes a “Pro” laptop. Not even a Prosumer laptop. Apple doesn’t currently make laptops for professionals. Apple makes a laptop for people who will just use it until it breaks and then buy another one. I don’t know any business IT department that runs like that, and my union IT department (which I run) absolutely doesn’t.

I’m slowly coming around to the fact that, painful as it is, if I want to be able to run Mojave, or heck, anything AFTER Mojave, I am almost certainly going to have to shell out for a MacBook/MacBook Pro I can’t upgrade, can’t repair, and has a form factor/color/keyboard I don’t want. Maybe this would be acceptable if I could get decent specs for US $1000, but I cannot.

There are two potential alternatives here:

  1. Hackintosh laptop - as someone who has been a loyal Apple customer for years, this hurts. I only ever had a Hackintosh once for the very real purpose of “trying before you buy.” This option bothers me ethically to some degree, but I’ve given so much money to Apple over the years that truthfully, I think at this point I’ve paid for macOS over and over and over again.

  2. Linux laptop - I worked hard to get Linux Mint to be as close to the user experience of macOS as possible, and now I am very comfortable with it. It’s not near perfect, but it’s very very good.

I’m thinking something like the Xiaomi Mi Notebook Pro 15 or similar.

I’m sad. :frowning_face:


#10

Interesting. Natively running which OS?


#11

macOS or Linux Mint

Death before Windows.


#12

Steve set out to make the computer as ubiquitous in people’s homes as kettles and toasters (or at least - so I believe he is quoted as saying??)… and I think he can be largely attributed to that.

Now however, it’s gone even further, with computing power not just in the home, but in the majority of people’s hands, almost constantly be it a smart phone or pad. This success has made the traditional computer redundant to the masses.

After decades of resisting, my father became a computer user in his late 50’s. However, he only uses it for solitaire and emails / web surfing - all of which he could accomplish with an iPad + keyboard.

My son as another - uses his iPad at school… comes home and uses it more. He does use my desktop for some homework, but could probably manage on the iPad for that, too.

It’s just a shame some of us really do still need a proper functional desktop. My move back to a tower from an iMac has proved to me that I’m not ready for desk-top-less computing - nor modern slimline Macs. But, I’m not the masses. :frowning: Apple didn’t become a trillion dollar company by making Macs.