Apple Reports Third Quarter Results

https://www.apple.com/newsroom/2022/07/apple-reports-third-quarter-results/

by todsacerdoti • 4 years ago

126 223 4 years ago

apple.com

pastor_bob2• 4 years ago

Beats all around; not surprising

People can't afford food, but they'll still buy the latest IPhone. Inflation isn't going to touch their sales.

abfan1127• 4 years ago

people 0% finance phones for 2 years, which Apple gets paid up front for.

ratsmack• 4 years ago

It's the free phone tax, where you end up paying double the cost of the phone by the time the 2 year contract expires.

ribosometronome• 4 years ago

which Apple gets paid up front for

Wasn't Apple trying to do some of their own financing here?

radicaldreamer• 4 years ago

The people who can't afford food are not the same people buying the latest iPhone

parkingrift• 4 years ago

Doubt. iPhone 13 is $30/month. All too easy to get on the iPhone upgrade program and perpetually give Apple $30/month.

bpodgursky• 4 years ago

"afford" is an overloaded word

I'm sure a lot of people are frustrated by food costs, and have adjusted their food purchasing decisions, while also buying new iPhones.

Barrin92• 4 years ago

if you've ever worked low income side jobs the amount of people you see with the newest airpods and iphone while living paycheck to paycheck is high. Of all the forms of conspicuous consumption that people get accused of, this is probably the most real one, with the exception of Jordans maybe

dieselgate4• 4 years ago

chuckling because there was a point when I had an iPhone but could barely afford to eat (and couldn’t afford to live in a house). But yeah it was not the latest iPhone

TaylorAlexander• 4 years ago

I feel like the number of people who both cannot afford food and will buy the latest iPhone is vanishingly small. I am sure such people exist, and that is... strange, but it doesn't feel like a useful explanation for what is happening.

pastor_bob2• 4 years ago

How's the Iphone selling so well over the past 3 months then compared to last year, especially in face of weak international currencies? These have been rough months for the average consumer supposedly. Does the Iphone 13 have a particular selling point other than being the latest and greatest? Obviously the people aren't feeling the inflation pressure when it comes to buying Iphones.

zimpenfish3• 4 years ago

At least in the UK, a lot of the (quite dreadful) infrastructure around social support requires you to have internet access - an iPhone on credit with a cheap/free SIM isn't a terrible way to achieve this on a low budget. Plus you know the phone is going to last a long time and hold its value once you're done with it.

tims333• 4 years ago

Sad to see "services" as a headline on Apple's earnings beat. I'm sure it is gratifying for Tim Cook, but this is going to be the thing that brings on much harder regulation for Apple.

JKCalhoun3• 4 years ago

When you've reached all the people that are going to buy iPhones, "services" is where you still have growth. Cloud storage, music, video streaming...

To be sure it is not the hardware company of the 20th Century any longer.

BearOso2• 4 years ago

Profit can't grow forever. At some point your company is so saturated you have to wring water from stone, literally nickel-and-diming people.

adastra224• 4 years ago

Then you invent the next iPad. Or Watch.

Or stop carrying about growth. There are plenty of well respected dividend investments, even in tech.

dmitriid3• 4 years ago

"services" is where you still have growth. Cloud storage, music, video streaming

Too bad Apple is still so, so very bad at this. Their services are barely functioning, at best, with multiple WTFs daily.

When they work, they are not even magic. They are the bare minimum of what you expect them to do (like, for example, to quickly and correctly sync photos between me and my family).

ProAm4• 4 years ago

It's rent seeking. It's what turns a $1000 phone into a $1500-2000 phone over the lifetime of a device (2.5 years)

dymk5• 4 years ago

"Rent seeking" is a weird euphemism for "provides a service that costs money to run"

Here I am, enjoying my 4 year old iPhone, happily paying Apple $3/month for iCloud storage.

orev• 4 years ago

My main issue with services is that they’re degrading the general experience in favor of pushing them. The Music app is barely functional for listening to your own music files, and they make it very difficult to find broadcast radio streams, instead promoting “Apple Radio Stations”.

Setting up a new phone prompts you incessantly about Apple Wallet, iCloud, etc. and uses badges to make you think something is wrong until you begin the process for each (the badges go away if you cancel out of it).

tims333• 4 years ago

100% agree. It is clearly a compromise of their user experience values in exchange for revenue on some slight above mediocre services.

boplicity2• 4 years ago

It's been clear for a couple of years now (to me) that Apple devices have become a sales platform for Apple services. It first started when I was constantly getting notifications that I was "running out of space" and needed to sign up for paid iCloud services. This, in fact, when I had plenty of space on my Macbook.

Such things have only continued. They're adding new products and paid services at a slow but steady pace, and regularly sending me notifications to sign up for those services. When you "upgrade" the OS, you're confronted with a whole slew of opportunities to sign up for more services, with no way to just ignore these prompts. I don't blame them for doing this, but it's become increasingly grating, and turned me off of Apple in general.

Like a lot of companies, they're focused on growing their bottom line, and don't see how they're angering their locked-in customers.

com2kid• 4 years ago

The Music app is barely functional for listening to your own music files, and they make it very difficult to find broadcast radio streams, instead promoting “Apple Radio Stations”.

Oh wow I remember when Microsoft did that! Wow that turned out badly for them, even if the Zune app had an amazing UI.

Same mistakes, different decade.

gumby5• 4 years ago

The Music app is barely functional for listening to your own music files

I do still have all my old itunes music in the Music app, so not sure if that's what you're complaining about.

OTOH both Music and iTunes can only handle a limited set of file types; neither can do anything with my huge library of flac files. Perhaps that's your complaint, which I agree with.

dawson• 4 years ago

This is true for community generated playlists too. I pay for Apple One, therefor Apple Music, but I keep returning to YouTube Music and Spotify because they both prioritise community generated playlists in their recommendation engine and search results.

CSSer2• 4 years ago

I have an Apple TV 4K, series 6 Watch, iPhone 11, a few Homepod Minis, and smart lights. I also have a MacBook Pro. It is astounding to me how much money I've put into the Apple "ecosystem" only to have anything but a seamless experience with Music and Homekit. It is downright pathetic.

Music just doesn't sync well across my devices. Full stop. I can start playing something on my phone, select my Homepods as my speakers via Airplay, and it will play. But if I lock my phone and come back a few minutes later, it'll forget what is currently playing on my HomePods and make me "replace" the music. If I try to control it from my other devices it's the same story. More than once I've had it yell at me for trying to play music in more than one place at a time and try to get me to upgrade to a family plan. I'm single and live alone.

Siri also often misunderstands scene names. I just turned to one of the HomePods and said, "Hey Siri, activate 'Nightlights Only'" (a scene name). She said, "Good night." and did nothing. This happens no matter how well I enunciate (general American accent) or how many times I try.

In the process of messing with it just now to prove my point before sharing, Siri hit a snag and told me to go update my iCloud account in the home app, so I did and ran into the same problem as this user[0] did two years ago (disappearing password prompt). It's wild.

This is not the Apple that made iMessage and Messages in OS X the most seamless text messaging experience I've ever experienced before.

[0] https://www.reddit.com/r/HomePod/comments/jsw122/homepod_upd...

Edit: I had my iPhone’s wifi off. Apparently I had to be on the same network to resolve the iCloud issue. Why not mention that?

bhauer• 4 years ago

The Music app is barely functional for listening to your own music files...

The fact that you can't click a band name to navigate to that band's list of albums when playing local media is perhaps the thing I hate most about iOS. The band name renders in the color of a link, but is non-interactive.

ChildOfChaos4• 4 years ago

Ahhh yes, I hated this. My phone kept saying is wasn't fully set up because I hadn't set up Apple Pay but at the time my bank didn't even support it.

I think I might have ADHD and I like to minimise any visual distraction by removing everything I can, else it becomes overwhelming for me, just seeing that badge marker when going through something was enough to annoy me.

I really wish there was more customisation so you could turn all that crap off that you didn't need / use so it wasn't even through, there is just too much junk on these devices but it's there to serve Apple and not you as a user.

NonNefarious• 4 years ago

The best part is how Cook declared that the future of Apple is in services like Apple Music, but then Apple made it harder to consume those services by removing the headphone jack from its best-selling music player (the iPhone) and gimping its battery to make it "thinner."

So dumb.

throwawaylinux• 4 years ago

Can you expand on that a bit more? Genuine question, I'm illiterate in matters of high-finance.

What does services as a headline signify, why would it bring on regulation (and what kind of regulation), and why is that a bad thing?

temende• 4 years ago

Apple's services benefit hugely from being built into the OS. If you're pro-Apple you would say that's just enjoying the benefits of vertical integration, and on the other hand if you're a regulator you would say that's illegal bundling (a la Microsoft w/ IE in the late 1990s).

eatbitseveryday• 4 years ago

Apple intentionally shifted to a service-based company some years ago. This is just the natural culmination of that choice.

lapcat• 4 years ago

A few interesting YoY comparisons:

Mac sales -10%

Net sales +2%

Operating expenses +15%

Net income -11%

Under operating expenses, R&D spending is up >$1 billion YoY

dopeboy• 4 years ago

Interesting that mac sales are down given the breakthrough tech with the M1 & M2.

xdavidliu• 4 years ago

maybe cannibalized by ipads?

akmarinov3• 4 years ago

Not that surprising, pandemic demand of laptops was through the roof + first gen of M1 was out so pretty much every dev got in on the big improvement

alooPotato• 4 years ago

Maybe everyone rushed out to buy the M1s last year because they were so good and disrupted the natural upgrade cycle so that this year there were less purchases?

Jtsummers3• 4 years ago

https://www.businessofapps.com/data/apple-statistics/

Long page, scroll down and you'll find stats for the past 13 years through last quarter showing the numbers for each product per quarter. Sales are, overall, up since M1/M2 were released. There have been other past quarters where there is a major drop in Mac revenue (and same with other products). The iPhone numbers show this with a much more pronounced effect, but that's essentially a single release date for all products whereas Mac products get released throughout the year so it's harder to observe without more breakdown (at least to laptop and desktop levels).

pedrosorio• 4 years ago

I bought my M1 macbook air more than 1 year ago.

gnicholas2• 4 years ago

The laptops with M2 chips weren’t out during the quarter being reported here. The 13” MBP was available on the last two days of the quarter, and the much more popular MBA came out in the following quarter.

pjmlp• 4 years ago

Only matters to 15% of the desktop world, it won't run the software used in remaining 85% of the desktop world, nor the game development SDKs used for 100% of game consoles.

thebigspacefuck• 4 years ago

Our company is Mac only but we haven’t widely adopted ARM yet. I think a lot of companies will take their time to switch.

whiteboardr• 4 years ago

Hard to get my head around the -10% in Mac sales since i expected the Apple-silicon transition to “open up the flood gates”.

Not coming from an investor mindset - mostly because the new macs are finally great value for money again and well built, mostly designed with actual users in mind and thus surprised there doesn’t seem to be a real impact financially.

Can anyone explain or put forward an interpretation on the “why” behind this?

cschep• 4 years ago

Is it possible they just can't make enough? I know I work for a big company that would have purchased a metric ton of these but they simply couldn't get them.

wollsmoth2• 4 years ago

The only thing I can think of is these things are lasting longer and the cheaper machines meet many peoples needs. I can hang on to my 2015 mbp another year or two for personal use anyway. And I won't be replacing it with a $3k MBP, I'll probably be going with an m2 or m3 MBA which will be under $2k.

mrtksn• 4 years ago

Intel sales are down %22. There are also articles about AMD. not doing very well[0].

Maybe simply people are not buying as many computers anymore.

[0] https://seekingalpha.com/article/4526269-amd-we-have-a-probl...

selectodude2• 4 years ago

You couldn’t buy one for literally months earlier this year.

alexwasserman• 4 years ago

I would bet supply constraints meaning they couldn’t make enough to sell. I was trying to buy large numbers for work (orders of 50-100 a time, multiple times) from Q4 through Q2 and ship times were months out at some points.

If you can’t make them you can’t sell them.

joshstrange4• 4 years ago

I know everyone else is saying it as well but the lead time to get a high-specced MBP is insane. So much so that my company had to give new hires a base model M1 Pro because that was one of the only things they could get their hands on.

Base MBP with M1 Pro, 16GB RAM, 512GB SSD: $2,499.00

Minimum desired MBP with M1 Pro, upgraded GPU so you can get more RAM, 64GB RAM, 1TB SSD: $3,699.00

And that's just assuming we wouldn't have considered M1 Max chips. We are a smaller company but have had had to buy at least 2 "compromise" laptops that I know of due to lead time. I imagine larger companies are in a similar position so Apple is losing $1-2K per laptop just because we can't buy the one we want in a reasonable timeframe.

olyjohn4• 4 years ago

I don't get why people thought it would change anything. The OS is still MacOS, and having to use a totally different OS to get a slightly better CPU performance isn't going to convince anybody to switch. None of my geek friends who use PCs give a single rip about the M1/M2 processors. Nobody I know who works with Windows and Linux on x86 systems care either, because MacOS is not their preference nor part of their business. Lots of people are still using 7-10 year old systems that work fine. It has literally zero impact on what they do. Nobody who is not technically-minded is going to care, because they'll either want a Mac or they won't. You turn it on, and it looks the same as the x86 Macs, and for 99% of what people do, the peak performance doesn't mean that much to them.

shuckles• 4 years ago

Mac sales indicating extent of supply constraints. MacBook Pro lead times were multiple months back in April.

steve_adams_86• 4 years ago

I know myself and a few other people settled on M1 MacBook Airs rather than waiting for Pros around that time. Part of the thought process was "what the hell, they're great computers and a Pro would cost n% more". I was fine compromising performance for having a machine I needed when I needed it, and saving some money in the interim.

It didn't make sense to wait several months when the M1 Airs are already great computers. If this was a common sentiment, they lost around $1500 from me alone, and perhaps a similar amount from many other people.

galogon• 4 years ago

I am an Apple fan because I have been a fan for 20 years. However, Apple has been objectively a "boring" company the last 10 years. They are famous for design but they don't push design forward anymore because they don't have a crazy, arrogant person at the top to rally the troops in a unique direction.

The only area they're not conservative in is chip design, but that's not a cool and trendy thing. You don't hear regular people talk about the chips in their iPhones. How is Apple able to stay relevant among younger people and convince them to buy iPhones when Android phones are just as capable and look just as good?

llampx• 4 years ago

Green bubbles vs blue bubbles

qeternity• 4 years ago

How are they able to convert newer people to buy iPhones when Android phones are just as capable and look just as good?

There's an embedded statement in this that might be incorrect and would give you the answer to your question.

eunoia• 4 years ago

This is such a tired and lazy line of thought.

Completely leaving out services , the “secret” projects and incremental improvements in hardware to existing products, in the last decade:

- AirPods - Apple Watch - Apple Sillicon

Each one of these new product verticals would be ten to hundred-billion dollar companies if independent.

I look forward to hearing why none of this is actual innovation and actually quite boring.

askafriend4• 4 years ago

Not to mention AirPods and Apple Watch became mini cultural revolutions in their own right. How quickly people forget.

onlyrealcuzzo• 4 years ago

Sales of Apple Watches are down 35%: https://www.digitalinformationworld.com/2021/12/apple-watch-....

I doubt that's a $10B company with that type of negative growth.

howinteresting• 4 years ago

Apple Watch is only what it is because Apple shut off the ability for anyone else to have that level of integration. Hope the EU forces them to open it up.

mikestew• 4 years ago

How is Apple able to stay relevant among younger people and convince them to buy iPhones when Android phones are just as capable and look just as good?

If you truly can't figure it out, first thing I'd recommend is checking your assumptions.

throw03172019• 4 years ago

The UX on Android is completely different. Everything is slow and laggy. Im looking at you, Samsung.

The Google Pixel’s Android version is better but not iOS.

mentos• 4 years ago

Ben Horowitz’s peace time CEO vs war time CEO in ‘The Hard Thing About Hard Things’ comes to mind. Tim Cook is a great peace time CEO that can ‘focus on expanding the market and reinforcing the company’s strengths’. In war time (like when Jobs joined Apple and was weeks away from bankruptcy) ‘a company is fending off an imminent existential threat..has a single bullet in the chamber and must, at all costs, hit the target.’

There are probably ten thousand hackers on here that day dream about being at the helm of Apple with a world class team and war chest at their disposal. I know I’ve day dreamed about it and truthfully if money and technology were no object I’m not sure what opportunities remain for products that can fit inside a briefcase that Apple does not already pursue.

Curious to hear ideas that aren’t VR/AR or a SmartCar..?

(The best I can do is just a new take on existing products like a eInk iPod with 2 million songs and a month long battery.)

candiddevmike• 4 years ago

More integrated services for the home. HomeKit was supposed to be this big thing and it seems to have been silently forgotten. Same with improving the developer experience for building things on Apple platforms: the docs suck, the APIs are arcane (sign all your things, read this spec to figure out how!). IMO, aside from the swift fanboys, no one I've met enjoys developing for Apple.

Doctor_Fegg• 4 years ago

Never mind cars, I’d love to see Apple revolutionise bikes.

cwp2• 4 years ago

Apple is about to find its self in need of a wartime CEO. The threat will come when China is no longer a viable place to manufacture high-tech devices. Apple has deep pockets, but they've been doubling down on China with each new warning sign. At some point they'll have to scramble to start manufacturing on this side of the Pacific, and it'll be rough.

Clubber• 4 years ago

I'd like to see a carry around device (phone format or even nano) that can dock into other things like a desktop or laptop and convert into that thing.

So I'm on my MacBook, pull out the device (like a cartridge) and it's a phone. Plug it into something else and it's a desktop. Plug it into a car and it's a CarPlay. Everything I plug it into charges it too.

A universal computer.

prewett• 4 years ago

Apple have been plenty innovative. In the past 10 years, Apple have:

- released Apple Watch

- all displays are Retina. (As far as I can tell by looking at all the monitors from other companies in an electronics store, they all still think that 96-dpi is acceptable)

- Apple displays have a much wider color gamut (I suspect the largest in the industry, but don't know)

- Apple Silicon (as you mentioned)

- AirPods, which people seem to really love

- continuously improved cameras on iPhones; no comparison between the current camera(s) and the iPhone 5 from 2012.

- Touch Bar (might or might not like it, but it is innovative)

- new, thin keyboard design (turned out not to be a good design, but it was innovative)

- integration between iOS/macOS: use your iPad as a monitor, handoff calls between phone and computer, shared copy/paste, etc.

- macOS can now run iOS apps

- Rosetta 2: invisible translation of x86 code that even runs faster than on their most recent native Intel laptops

- privacy as a feature (arguably innovative, but compared to what everyone else is doing it is...)

There's not so many new-category-defining innovations, but Apple have hardly been sitting on their hands.

codsane• 4 years ago

There's not so many new-category-defining innovations, but Apple have hardly been sitting on their hands.

Yep! With more to come too. Seeing Apple’s take on VR/AR in these next few years is going to be very interesting. Probably not as big of a paradigm shift as the iPhone, but still exciting nonetheless.

davewritescode• 4 years ago

Agreeing with others that this is a lazy take.

Apples AirPod revenue alone in 2020 was more than Twitter, Spotify and Square combined.

Apples ability to create diverse, revenue generating lines of business is unparalleled.

shard3• 4 years ago

How is Apple able to stay relevant among younger people and convince them to buy iPhones when Android phones are just as capable and look just as good?

There is quite an element of peer pressure for young people to display status through having new and expensive technology (which I believe is one strong reason the design of smartphones are rev'd every year, so that people can tell at a glance whether you have the latest device), and add upon it Apple's cultural cachet to be the "cool/in" brand, it's often hard for young people to resist the pressure. This has led to issues such as "blue bubble versus green bubble" where young people on Apple devices exclude those on Android device based on not wanting to see an out-of-place color in their text message window.

maxcan2• 4 years ago

Who forgot to tell $AAPL that there is a supply chain crisis?

akmarinov3• 4 years ago

Tim Cook, the literal supply chain god is in charge of Apple

tradertef• 4 years ago

literal god?

compiler-guy• 4 years ago

Early in his career, Tim Cook called himself the "Attila the Hun of Inventory", meaning he knew how to handle a supply chain so aggressively that the firms he managed (Compaq at the time) didn't need to carry that very expensive inventory. It could be obliterated.

He has only gotten better at it since then.

Apple is supply-chain constrained today, especially around Macs. But it has managed this difficult supply-environment way, way better than most other firms.

maxcan2• 4 years ago

100%. I should have made that clear in my somewhat sarcastic quip.

For years I was telling anyone who'd listen that COO Cook was more important to AAPL than Jonny Ive.

radiojasper3• 4 years ago

Sorry for being ignorant, but I suck at reading numbers. Especially the comma confuses me as a European. Do I read correctly that Apple turned over more 40 billion USD on iPhone sales this quarter alone?

Jtsummers3• 4 years ago

Yes.

radiojasper3• 4 years ago

in-freaking-sane. Thanks, I feel very small now.

saagarjha2• 4 years ago

That is correct.

layer82• 4 years ago

They sold 240 million iPhones in 2021. They basically sell almost a million iPhones per business day, on average.

radiojasper3• 4 years ago

Baffling, really. Those numbers are ridiculous.

s1k3• 4 years ago

I tried to buy a MBP in Feb. it got pushed all the way back to June before I cancelled my order. They had serious supply chain issues for a while.

Apple Reports Third Quarter Results

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