Today in Apple Financial News

Apple released its quarterly earnings report, and the news is good. For Apple. The quick summary:

  • Overall, up 7% over year-ago quarter in revenue, 41 million iPhone sales
  • The iPad saw significant growth for the first time since 2014, and this is likely the result of all those now low-priced 9.7" iPads.
  • The Mac line saw their third quarter of growth, defeating analyst expectations and a generally shrinking PC market.
  • Slight dip in iPhone sales from previous quarter - but next quarter is the big one
  • 10% dip in China revenue
  • Apple Watch biggest selling smartwatch, up 50%
  • Services up 22% to 7.26B - bigger than all of Facebook
  • Stock at record highs, total market cap nearly .83 trillion dollars 

In all, a strong performance. This shouldn't be surprising, given that Apple has made this sort of thing nearly routine despite the absence of Steve Jobs for the last decade. 

What does it mean?

The predicted death of the iPad was premature. The lagging sales over the last few years are the result of several factors, some under Apple's control and some not. First, the replacement cycle for an iPad more resembles PC rates, not phone. People get a new one every four to five years, not every two and a lot of people from the first wave of iPad sales are now looking at the new offerings with interest. Steady improvement of the iPad side of iOS are progressively eroding the barriers for certain types of users. Multitasking, drag and drop, and the like make the iPad Pro a viable laptop replacement for a larger class of user. Price drops on the low end of the iPad line open up more sales as well. The growth this quarter reflects part of first and third causes. Next quarter will see the second as well as we'll get a look at a full quarter of the new iPad Pro sales.

We're just a month or so from the announcement (and, likely, availability) of at least two and almost certainly three new iPhone models. Yet, we're still seeing massive iPhone 7 sales. Apple's ecosystem drives these sales in a way that Android cannot.

Apple's services business is a Fortune 100 business all by itself. Growing iPad, Mac and iPhone sales in a market where sales in these categories is diminishing or profitless for most of the competition means that this segment of Apple's empire will only increase in value. 

It's likely that Apple's market cap will be the first to break 1 trillion dollars in the next year.

What else is happening?

Augmented reality, autonomous systems, and American Apple factories.

  • Apple has the position to distribute AR to the masses with its massive installed base of phone and ipad users - all with high quality, Apple-designed chips. Could easily be the first large scale market for AR apps and services.
  • Apple's speculated move into autonomous systems - read, self-driving cars - is the only thing that could derail Musk's march to glory with Tesla.
  • We may or not be able to thank the God Emperor for this (Apple has made noises in this direction before) but we might see American Apple factories - or at least, their announcement - in the next year or even sooner.

Apple continues to innovate. They've got a lot of things cooking, and they have proved to have a finely-tuned sense of what is marketable. Based on their existing pipeline alone - Apple is a strong competitor for the next decade even if they stopped work on new products this evening.

The Yawfle stares and stares and stares... at tech news, without the SJW shenanigans