Apple Hits Another One Out of the Park
- Paul Thurrott
- Nov 01, 2018
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25
Apple posted another record-setting quarter today, with a net income of $14.1 billion on revenues of $62.9 billion for the period ending September 30.
“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” Apple CEO Tim Cook said in a prepared statement. “Over the past two months, we’ve delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems, and we enter the holiday season with our strongest lineup of products and services ever.”
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Looking at the product lines for which Apple does provide hard numbers, we see the following.
iPhone. Apple sold 46.9 million iPhones in the quarter, roughly flat with the 46.7 million it sold in the same quarter a year ago. But Apple’s newest iPhones barely registered—the iPhone XS and XS Max were only available in the last week of the quarter and the iPhone XR shipped afterward—so things should improve dramatically in the current quarter.
iPad. Apple sold 9.7 million iPads in the quarter, down 6 percent from the 10.3 million it sold a year earlier. Worse, the iPad’s ASP must have fallen too, since revenues were down 15 percent YOY. Apple did just launch a new iPad Pro, but I don’t expect that to impact its results in a major way going forward.
Mac. Mac sales also fell in the quarter, from 5.4 million units a year ago to just 5.3 million units. That said, Apple just launched new and long-awaited MacBook Air and Mac Mini upgrades, so this quarter might see a boost.
Services. Apple’s services business hit an all-time high of $10 billion in revenues, an increase of 27 percent YOY.
Apple says it generated $19.5 billion in operating cash flow and returned over $23 billion to shareholders in dividends and share repurchases in the September quarter.
Also, I’ll point out that the iPhone is now responsible for 59 percent of Apple’s revenues. But if you add in Services, the entire iPhone ecosystem represents about 68 percent of the company’s revenues. This is a bit lower than in previous quarters, but Apple is still very much the iPhone company.
Conversation 25 comments
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provision l-3
<blockquote><em><a href="#359532">In reply to jrickel96:</a></em></blockquote><p>"For instance if there's a major paradigm shift…"</p><p>So, Microsoft had the advantage of being more diverse when the last big "paradigm shift" happened which was the smartphone. At the time Apple was just the "iPod company" that also sold Macs and Google just had search. Fat lot of good that diversity did Microsoft but it is a good line to tell yourself if you are a fanboy that loves a company. What would be really good is if folks like you and MutualCore just gave up your emotional attachment to companies and the us us and them mentality. </p><p><br></p><p><br></p>
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provision l-3
<blockquote><em><a href="#359557">In reply to Sprtfan:</a></em></blockquote><p>I got the point I just disagree with it. Microsoft missed a large shift in mobile phones and ultimately went from being a big player in the the smartphone market to being kicked out. That really wouldn't have been a big deal had the shift not had a broader impact which was people using and consuming P.Cs less. If you remember back to that time Microsoft's revenue took a bit of a hit. They certainly weren't in danger of going away but it wasn't exactly good times either. They then went into a bit of a tailspin and tried some "me too" products (phones, Band, several failed starts at a touch based OS). What really got them on their footing again and to where they are today was catching the services/cloud computing shift early. So, it wasn't their diversity in products that helped them it was catching a shift and capitalizing on it. </p><p><br></p><p>I'm not trying to beat up on Microsoft here, great company and great products. I'm just offering a sober assessment and that was that they had a rough patch for a few years as they struggled to catch on to changes in technology sector. </p><p><br></p><p>Ultimately my point is that there is not a one right way to do things. Microsoft and Apple have more or less been around the same amount of time. During those many decades Apple has largely been a "one product" company and Microsoft has had its finger in may pots. Both companies have had successes and rough spots and both are still thriving. Two different models and both are working. Weirdly people are still keeping this dumb Apple vs. Microsoft thing alive and well even though the companies really don't even compete any more. </p>
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provision l-3
<blockquote><em><a href="#359690">In reply to Sprtfan:</a></em></blockquote><p>I'm not even sure how to respond to this one. I'm guessing you didn't bother to read my response because at no point did I argue against being diverse.</p>
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provision l-3
<blockquote><em><a href="#359789">In reply to Sprtfan:</a></em></blockquote><p>You are correct, I am saying that diversity in itself isn't important and since you seem to think I'm arguing for a one product strategy I'll go ahead and say that in itself doesn't matter. Both rely on execution on the part of leadership to work. </p><p><br></p><p>You keep beating that Nokia and BlackBerry horse all you want but you really think that there are no "diverse" companies that have tumbled as far? Motorola for example?</p><p><br></p><p>I get it, Microsoft is perfection in your mind. Sorry I touched the sacred cow. </p><p><br></p>
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pargon
Premium Member<blockquote><em><a href="#359609">In reply to provision l-3:</a></em></blockquote><p>Actually, if you look at the profits of Microsoft they did EXTREMELY well during that paradigm shift, start of smartphones. Steve Ballmer was a great CEO as far as maximizing revenues and profits, but the market had decided it didn't like him. Maybe because he missed the trend or Windows Vista, or various other swings and misses…..but Microsoft's financials were amazing, something like 3x-4x increase to the business throughout his tenure.</p>
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provision l-3
<blockquote><em><a href="#359737">In reply to Pargon:</a></em></blockquote><p>I don't disagree that Ballmer was a great CEO and great CEOs still have their mistakes. You can look at his entire tenure and financials are great but that is 2000-2014 and we are talking about the latter part of that as the iPhone came out in 2007. In that latter part Microsoft had a drop in year over year revenue form 2008 to 2009. 2010 saw an increase from 2009 but was just getting back to 2008 levels. So, yeah, they had a rough patch in there. </p><p><br></p>
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shameermulji
<p>So much for Apple products becoming too expensive</p>
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PeterC
<blockquote><em><a href="#359511">In reply to briantlewis:</a></em></blockquote><p>Now that brings back memories, like Claris works suite and my old PowerBook oh and 14.4 k modems. Joie de vie!</p>
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provision l-3
<p>Great quarter for Apple. Unfortunately their guidance for next quarter seems to have caused some folks concern. </p>
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provision l-3
<blockquote><em><a href="#359741">In reply to MikeGalos:</a></em></blockquote><p>Yes, it turns out businesses goal is to generate revenue. The one's that don't fair so well. So, it was a great quarter.</p><p><br></p><p>I don't think the unit sales were horrible, mostly flat but if you think mostly flat is "horrible" then you likely think a lot of companies are doing horrible. You are totally welcome to your viewpoint. You are also overlooking the Services and Other categories which grew 17% and 30% respectively which I think is respectable growth especially when you consider that the Other (watch, HomePod and AppleTV) now generate more revenue than the iPad. </p><p><br></p><p>On your last point, marketshare doesn't really have much to do with revenue. Revenue is going be more closely tied to unit sales. Unit sales can go up while marketshare goes down or unit sales could go down while marketshare goes up. So while marketshare can be a useful number in looking at the success of a product it really isn't meaningful when it comes to revenue. </p><p><br></p><p><br></p>
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dontbe evil
<p>increase the price, invest and produce for same or less money = more profit</p>