Category Archives: Apple Inc

Huge iPhone growth is more than a one-off blip, argues Tim Cook, with most still to upgrade

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Updated quote with WSJ correction:

While few would expect the record-breaking surge in iPhone sales generated by the larger-screened models to continue into subsequent quarters, Tim Cook argued in a WSJ interview that the potential is there.

In an interview, Apple Chief Executive Tim Cook, not surprisingly, argued that the demand is more than temporary. He said fewer than 15% of older iPhone owners upgraded to the iPhone 6 and 6 Plus and that the majority of switchers to iPhone came from smartphones running Google Inc.’s Android operating system.

“We certainly believe there are legs to it,” said Mr. Cook of the iPhone sales surge.

Cook noted during the Q1 earnings call that the current iPhone lineup had experienced “the highest Android switcher rate in any of the last three launches.” With CIRP data suggesting that the US rate of switching from Android to iOS has remained broadly constant, that suggests the bulk of switchers have been outside the US–China in particular … 

Not even Cook would suggest that a company of Apple’s size could enjoy a 30% jump in year-on-year revenue two quarters running, but the company has issued guidance suggesting growth of between 14% and 20% this quarter.

Cook’s optimism stems from the fact that most iPhone owners have not yet upgraded. Add late upgraders to a continual stream of switchers, and you have, he believes, a recipe for continued strong growth. The Apple CEO also insisted that there remained upside potential for the iPad, despite a 22% drop in revenue.

Analysts are not so sure. While a Thomson Reuters poll of analysts found that the consensus view was for 22% revenue growth over the full financial year ending this September, they expect the bubble effect of the switch to larger displays to end by then, with growth dropping back to just 4% the following year.

Cook would argue that slowing growth in iPhone sales will be compensated for by other revenue streams, including the Apple Watchlaunching in April–and both domestic growth and international expansion for Apple Pay. The App Store, too, is growing at a rate that would see it become a significant contributor to Apple’s total earnings. One thing for sure: it’s going to be an interesting ride …


Filed under: AAPL Company, iOS Devices Tagged: AAPL, Android, Android (operating system), Android switchers, App Store, App Store (iOS), Apple Inc, Apple watch, china, CIRP, earnings, iOS, iPad, iPhone 6, iphone 6 plus, Revenue, switchers, Thomson Reuters, Tim Cook, upgrades

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Apple now leads the luxury gift market in China, taking the #1 slot from Hermès

luxury

Apple is on rather a roll at the moment. A new world record for quarterly profitsBest-selling smartphone maker in China. Joint leader of the global smartphone market. Record-breaking app store earnings. Now Reuters reports that it’s picked up a new accolade, leading the luxury goods market in China.

Apple Inc has taken the number one luxury gifting spot in China from designer goods maker Hermès International SCA, according to a Hurun luxury report on Thursday, reflecting the iPhone maker’s recent hot streak in the country.

Hermès is a French maker of designer clothing and accessories, known for its scarves and handmade leather luggage … 

Apple also beat Louis Vuitton, Gucci and Chanel to the title. The Hurun luxury report is an annual survey of the spending of millionaires in the country which has been running for more than a decade.

The launch of the Apple Watch in April is likely to solidify Apple’s position in the Chinese luxury goods market.


Filed under: AAPL Company Tagged: AAPL, Apple awards, Apple Inc, Apple Records, china, iPhone, luxury, Luxury goods

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Principal filming finally underway for Sorkin/Boyle Steve Jobs biopic, sticking with ‘three keynote’ focus

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Universal Pictures has announced that principal filming of the Steve Jobs biopic written by Aaron Sorkin and directed by Danny Boyle is now finally underway. The announcement confirms that the movie, dropped by Sony back in November, will still follow the original three-act structure based around three keynote presentations.

Universal Pictures today announced that principal photography has commenced in San Francisco on Steve Jobs. Set backstage at three iconic product launches and ending in 1998 with the unveiling of the iMac, the film takes us behind the scenes of the digital revolution to paint an intimate portrait of the brilliant man at its epicenter.

Surprisingly, Universal says that the final product announcement will be the iMac, in 1998, rather than the launch of the iPhone as had been widely expected … 

Slash Film reports that the two other keynotes are for the original Macintosh and the NeXT computer.

The keynote-based format had been thrown into some doubt earlier this month when film crews set up in the garage of Steve’s childhood home. However, Slash Film says that this is for one of several short flashbacks accounting for “less than 10% of the […] script.”

  • One with Steve Wozniak (played by Seth Rogen) in the garage talking about the original Mac, focusing on the conversation over whether or not to make the Mac a closed system.
  • Another shows Steve Jobs removed from power at Apple. This is where Jeff Daniels would be playing John Sculley.
  • We also see a few snippets showing Job’s home life. This is where we see Jobs’ daughter, who ages 5 to 19 throughout the story played by Makenzie Moss, Ripley Sobo and Perla Haney-Jardine.

Universal confirmed that Michael Fassbender plays the lead role, after both Christian Bale and Leonardo DiCaprio pulled out, Sorkin having originally wanted Tom Cruise. Seth Rogen will play Steve Wozniak, Kate Winslet former Macintosh marketing head Joanna Hoffman and Jeff Daniels appearing as John Sculley.


Filed under: AAPL Company Tagged: Aaron Sorkin, Apple Inc, biopic, Danny Boyle, Jobs biopic, Kate Winslet, Leonardo DiCaprio, Michael Fassbender, Michael Stuhlbarg, Steve Jobs, Steve Jobs biopic, Steve Wozniak

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Tim Cook insists iPad prospects still rosy despite 18% drop in sales, 22% fall in revenue

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Apple’s press release yesterday noted “all-time record revenue from iPhone and Mac sales as well as record performance of the App Store,” while remaining silent on iPad sales. The reason? The slide continued last quarter, with year-on-year sales down 18%, and a reduction in average selling price meaning revenue was down 22%.

Tim Cook acknowledges that the switch to larger-screened iPhones mean the iPad is being squeezed from both sides.

There’s probably some level of cannibalization that’s going on, with the Mac on one side and the phone on the other.

It’s also undeniable that people upgrade their iPads less frequently than their iPhones–Cook putting the number at “somewhere between” the 2-year cycle of the iPhone and 5-year cycle of Mac–meaning that Apple needs to find a continual stream of customers buying an iPad for the first time … 

While some have argued that this is a big ask in a saturated market, Cook argues that this isn’t the case.

First-time buyer rates are very high. By very high, I mean that if you look at some of the developed markets, like the US, Japan, the UK, you would find that 50 percent of the people are buying an iPad for the first time. If you look in China it’s over 70 percent. And so when you have that kind of first-time buyer rates, you don’t have a saturated market.

Cook says that high usage figures also demonstrate the continued popularity of the device.

Usage is six times our nearest competitor. Usage measured in web browsing is like 71 percent of total tablets. Also the commerce taking place across the iPad is enormous. Essentially over 80 percent of the commerce on tablets is taking place on iPad.

While there would be no “miraculous change” in short-term sales, he believes that the IBM partnership is a sufficiently big deal to “move the dial” on sales, with 100 vertical market apps expected to be available by the end of the year.

I think the partnership with IBM and the work that we have going on in the enterprise [sector] is profound, I think we’re really going to change the way people work.

Cook didn’t comment on the rumored 12-inch iPad Pro, merely observing that new products were in the pipeline.

Via MacWorld


Filed under: AAPL Company, iOS Devices Tagged: AAPL, App Store (iOS), Apple Inc, IBM, iOS, iPad, iPad financials, iPad numbers, ipad sales, iPhone

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Apple’s quarterly profit set new world record for any company, says Standard & Poor’s

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Apple didn’t just set a new record for the company when it beat every forecast in the Q1 results announced yesterday, it set a new world record for the most profitable quarter of any company in history, says credit ratings giant Standard & Poor’s. Its net profit of $18B far exceeded the previous record of $15.9B, set by oil company ExxonMobil back in 2012.

With such huge numbers difficult to grasp, there have been various attempts around the net to put the numbers into perspective.  TechCrunch expressed it as a profit of $8.3M per hour. Reddit user Cal00 noted that Apple made more from the iPhone alone that Google and Microsoft made from their entire product ranges–combined. Business Insider observed that the single-quarter iPhone sales were greater than Yahoo’s entire market capitalisation.

While revenue, profit and iPhone sales all exceeded even analyst expectations, the analysts were right about one key thing …

It had been predicted that high sales of the iPhone 6 Plus, together with more people opting for the middle storage tier after Apple doubled capacity to 64GB, would boost margins beyond the 37.5-38.5% forecast by Apple. This was indeed the case, notes the WSJ, averaging selling price rising year-on-year by $50 to $687, enabling Apple to hit a gross margin of 39.9%.

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CEO Tim Cook was also keen to point out that many of those buying the iPhone 6/Plus were new customers, per MacWorld.

I would point out that only a small fraction of the installed base has upgraded, so there’s a lot more people within the installed base, but I would also point out that we had the highest number of customers new to iPhone last quarter than in any prior launch. And also that the current iPhone lineup experienced the highest Android switcher rate in any of the last three launches in any of the three previous years. We didn’t look back to the other years, I don’t know about those.

The iPhone now accounts for 69% of total Apple revenue.

The record-breaking numbers also explain why, despite the stock buybacks and dividends paid out by Apple, its cash reserves continue to climb, now standing at $178B. As Business Insider commented, this would be more than enough to enable Apple to buy IBM, Ford, GM and Tesla with $41.3B in change.

Via BBC News


Filed under: AAPL Company Tagged: AAPL, Apple Inc, ExxonMobil, iPhone, iPhone 6, Net profit, Standard & Poor's

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Apple supplier Foxconn to cut workforce despite likely record iPhone sales [Update: Foxconn denies]

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Update: Foxconn has denied the Reuters report, stating that the claim is “completely inaccurate and totally without foundation.” The company told us that increased automation will result in reduced recruitment, but that there are no plans to reduce its workforce “now or anytime in the future.”

Foxconn, the lead assembler for iPhones, is planning to cut its workforce despite widespread expectations that Apple will today announce record sales of its smartphones, reports Reuters. It’s likely that the proposed reduction in staffing relates to Foxconn’s work for other manufacturers, who account for around 60% of the company’s revenues. Also, Apple sells a lot more stuff during the run up to the holidays so seasonal workers might be let go after demand is met.

Special assistant to the chairman and group spokesman Louis Woo did not specify a timeframe or target for the reduction, but noted that labor costs had more than doubled since 2010 […]

“We’ve basically stabilized (our workforce) in the last three years,” Woo said. When asked if the company plans to reduce overall headcount, he responded “yes”.

Foxconn experienced double-digit revenue growth from 2003 to 2012, but has seen that growth slip in the past couple of months as the PC market contracts and smartphone growth rates slow. The company has been trying to work its way up the Apple food-chain from assembly and low-cost components into more expensive parts like displays.


Filed under: Tech Industry Tagged: Apple Inc, china, Foxconn, iPhone, iPhone 6, Terry Gou

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Anticipated iPhone numbers would see Apple threatening Samsung’s smartphone lead

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If Apple does indeed report iPhone sales in line with analyst expectations of 66.5M units, the company could be closing in on the market share lead Samsung has held in the smartphone market since 2011, reports the WSJ.

Research company Canalys notes that Apple’s anticipated growth in iPhone sales coincides with a dramatic drop in sales of Samsung smartphones.

Samsung’s share has been falling, hurt by lackluster sales of its flagship models and the rise of homegrown brands in fast-growing emerging markets. In the third quarter, Samsung shipped about 78 million smartphones, about 25% share of the global market, down from 34% a year earlier, Canalys said.

While that still leaves Samsung well ahead for now, it’s a trendline which could see Apple regain the lead it once held … 

Apple is expected to announce its most profitable quarter ever later today, thanks to record iPhone sales generated by demand for the larger-screened iPhone 6/Plus.

While the first quarter after an iPhone launch usually marks a peak in sales for the year, Samsung is coming under increasing competition from Chinese manufacturers like Xiaomi, while Apple is seeing its Chinese sales grow. Analysts expect Apple to have sold more iPhones in China than in the US during Q1.

“It’s going to be closer than it’s ever been since Samsung took the lead,” said Chris Jones, principal analyst at Canalys.

While Apple and Samsung are rivals in the smartphone market, the two have a close relationship in the supply chain, with Samsung expected to make the majority of the A9 chips for the next-generation iPhone.


Filed under: AAPL Company, iOS Devices Tagged: AAPL, AAPL earnings, Apple Inc, china, iPhone, iPhone 6, iPhone 6 sales, Market share, Samsung, Smartphone, Xiaomi Tech

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