Apple’s decades-long victory over FUD, fiction, and so-called "insiders" continued once again during its most recent financial call, when reports claiming the end times for iPhone were proved, once again, to be clickbait fantasy.
Time for alternative facts
When I use the expression “alternative facts,” I’m not finding some dystopian way to rebrand lies, but taking a factual approach to Apple fan fiction.
Apple’s management told us plenty during the Q2 18 call, in the press release and transcript, reports on what they revealed are everywhere, and I’m not here to bore you with a repeat performance. I thought you might find it more interesting to pick up on some of the numbers people aren't talking about:
Apple is really shrinking
At least, Apple shares are doing so. The company now has 5,024,877 outstanding shares in contrast to 6,637,302 in 2013. If you’re lucky enough to own shares in the company, you’ll probably also be pleased Apple raised the dividend by 16 percent and announced a $100 billion share buyback scheme (meaning it’s repurchasing around 13 percent of its market cap).
6 iPhones sold every second
Apple sold over six iPhones each second across the 91-day quarter. It sells 573,813 iPhones every day (or 6.64 iPhones a second).
This rather refutes all the B.S. claims we’ve heard recently of iPhone sales collapsing, and it shows those indulging in those claims were being misled (at best), indulging in pure fantasy, or worse. (Apple says customers chose iPhone X more than any other iPhone across the quarter.)
NB: It is ironic that Apple likely benefitted from these claims, as it got to repurchase its shares for a little less than they might otherwise have cost. I guess it is possible that one day a well-resourced journalist with a team behind them might recruit some forensic accountants to try to follow the money in terms of who pays whom to spread such claims.
Apple sells a Mac every two seconds
Apple’s most recently introduced iMac Pro was never going to be a consumer favorite, but it has evidently had some impact: While Mac sales fell by around 120,000 units, revenue from the segment stayed steady ($5,844,000 in 2017 quarter versus 5,849,000 this quarter). The implication has to be that Apple sold plenty of Macs at the high end. It sells a Mac every two seconds, its own data shows.
Apple is the world’s biggest PC vendor
Apple also sells an iPad every second. If we choose to assume people buy iPads for similar tasks they would once have purchased PCs for, then you can argue that Apple now sells two post-PC products (Mac, iPad) every second. Given the huge enterprise deployments of iPads and the growing capability of these machines, it makes no sense to me at all to leave them out of PC sales data. Looking at Gartner’s April 2018 data, we see that if Apple’s (actual, reported) iPad and Mac sales were combined you’d get 13,191,000 unit sales. What does that mean? It means Apple has become the world’s biggest PC vendor.
(Don’t neglect iPhone alone generated around $100 billion in revenues in the last two quarters, compared to Microsoft’s full year 2017 revenues of $90 billion.)
Apple’s other $50 billion business
Apple CEO Tim Cook last year said he hoped to double the size of the company’s services business within the next four years. It looks like that target’s going to be achieved ahead of schedule — at $9.19 billion, service revenues are up 31 percent since Q2 17 and 8 percent sequentially ($8.47 billion for a combined $17.66 billion so far), putting the company well on track to achieve $32 billion or more across the current fiscal year. How, just how, will it boost this business?
Tim Cook is an operations genius
Stop me if you’ve heard this before, but it’s pretty clear how effective Apple’s operations team has become. How else to account for the scuttlebutt from out of the company’s supply chain in recent weeks? Apple surely acquires its components months, perhaps years, ahead of time — and given the company is moving to make some of these parts internally, is it any great surprise some external vendors may see sales reducing?
The inconvenient truth is that supply chain production rumors around iPhone sales are useless. Why? Because we don’t know at what point in the supply chain cycle any of these vendors sit.
(Perhaps it would be helpful if those who report such claims as fact learned to ask more complex questions rather than use such information to support their own pre-determined narrative.)
AirPod is the new iPod
Cook called them a “runaway hit,” but the company won’t break out AirPod sales numbers. Anecdotally, I am certainly seeing them around a lot more frequently in everyday use — I bet you’re seeing them around more often, too. I also remember when iPods became a mass market trend, after selling just 600,000 in the first 14months. The analysts think we’re already beyond that.
HomePod: New features “soon”
“We're looking forward to adding new features to HomePod and introducing it to more markets around the world soon,” said Cook. It’s a smart speaker for music fans and (because it is from Apple) will improve with every easy-to-install software upgrade. Siri is a cloud service, and it will continue to improve.
Happiness data
Apple cited 451 Research data that claimed a 95 percent customer satisfaction rating across all iPhone models, while for iPhone 8, 8 Plus, and iPhone X it was even higher, at 99 percent. iPad customer satisfaction ratings are 95 percent.
Apple is an enterprise company
HCA Healthcare recently announced plans to deploy 100,000 iPhones across their hospital sites within the next three years. Apple revealed 451 Research data among business buyers who plan to purchase smartphones in the June quarter that shows 78 percent plan to purchase iPhones. When it comes to tablets, the enterprise is 73 percent planning for iPad.
Apple is growing in China
There were some spurious claims made recently (no link deserved) that Apple’s market had collapsed in China. Because those claims don’t reflect the facts (revenue climbed 21 percent), I can only assume them to have been based on fantasy at best or malicious market manipulation at worst. Facts:
- The most popular smartphone in China is the iPhone X.
- The top three most popular smartphones in China are iPhones.
- Wearable and services were described as achieving “huge growth rates” there.
- Mac and Apple Watch sales are growing in China.
- There are 2 million iOS developers
- China is now bigger than Apple’s European segment (as predicted in 2011).
Apple also set a new first-half record in India. Now read this and this.
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