Apple Reports Record Fourth Quarter Results | Hacker News Reader

Apple Reports Record Fourth Quarter Results

apple.com

102 pointsrunesoerensen124 comments

Open articleView on HN

32% quarterly profit growth, 22% quarterly revenue growth. Good night.

In case you're doing the math at home:

~$24M/hour.

~$500,000/minute.

~$6,500/second.

(And an extra $200B in the bank.) Unbelievable.

In this quarter AAPL have made more profit than AMAZ has ever made in its entire lifetime as a company, and probably for the next 5 years too.

AAPL also has about the same revenue growth as FB/GOOGL, while trading at about 1/10th the PE.

Man, Wall Streets really, really hate this company.

To be fair, Amazon is a pretty bad company to compare to with regard to profit; Amazon intentionally tries to have 0 profits while increasing revenue.

Apple is literally running into the, "How much more money could you possibly make?" problem.

Which is ridiculous on the face of it - why would Wall St. subsidize Amazon's quest for 0 profits while spurning Apple's kingly quarterly earnings?

The reason is that Wall St. is threatened by Apple because they cannot control them.

I disagree. The only point people on Wall St pay attention to is how to make more money. Apple depends a lot on iPhone for it's profits to trading at other companies' P/E.

Because they keep growing revenue. It's not that they want to not have profit, it's that they're wanting more to reinvest in the business than just have profit sitting around, or returning it to the shareholders. If it wasn't for that attitude, we wouldn't have AWS. We also wouldn't have the Kindle Fire Phone, so take that statement as you will.

Wall Street is never about the now it's about betting on the future. Apple has a single, massive, product. But growth is slowing due to saturation and they don't have anything else. Amazon meanwhile is gobbling up commerce and has now become the dominant player in cloud infrastructure which still has massive upside. They would appear to have far more upside than Apple today.

Just to be clear, this is the chart that shows how much the growth of Apple's 1 product is "slowing"..

https://twitter.com/BenedictEvans/status/659107811549274112

"Our early take is that the guidance seems to imply flattish (74-76 million) iPhones for December," wrote Apple analyst Gene Munster in a note shortly after the numbers were released.

He added, "This would imply iPhone units down 1% to up 2% year-over-year. We view this as a relief given investors were bracing for the start of the 6S cycle to be down meaningfully (down 5-8% y/y)."

They made like $240B revenue in the quarter.. 30% of new iPhone sales are to people switching from Android.

That second paragraph is key, iPhone sales are very uneven given the Apple upgrade and refresh cycle. Even Gene Munster, who you're quoting, is expecting them to sell ~242 million iPhones in CY2016, which is a 5% YoY increase on an absolutely massive base.

From a summary of his research report;

    Finally, Munster is also bullish on Apple's anticipated
    "iPhone 7," which he believes will begin driving 
    investor hype in the coming months, despite not being
    expected to debut until September of 2016. With a so-
    called "iPhone 7" expected to introduce a revamped 
    design, he believes next year's upgrade will be a 
    "more revolutionary cycle," driving sales of the 
    blockbuster handset even higher.

I guess technically, 5% YoY is slowing growth since their earlier performance was absolutely insane, but their iPhone ASP is still increasing to ~$675, so with 40% margins, 10 million incremental phones is another $2.7B in profits.

Trust me I'm not bashing Apple. I think what they've done is amazing. It's just that there are signs of this being a saturated, or at least slowing, market.

Amazon has always positioned itself for the long term, so it intentionally plows money back into staying ahead of competitors. As a result their competitors for their core business (cloud properties and technology) are far behind.

By stacking up the dollars, Apple is positioning itself to be defined by its profitability. The have an innovative edge right now, but with increasingly less differentiation technology-wise, this positioning will be hard to turn against when they need to invest in reinventing themselves. If they don't plan to reinvent themselves, they face becoming another HP down the line.

Apple re-invest a ton into their business, both in R&D and manufacturing and supply chain. It's just that the amount they invest, even though in the billions, are still too small when compare to their profit and cash reserve.

They literally can't spend that much money, nobody can, Apple has enough cash reserve to fund NASA for the next 12 years for a literal moonshot project. Meanwhile Amazon's positive cash flow is less than one billion dollars per quarter and it's much easier to reinvest that much.

Even if Apple fund the entire Google X, it won't register as much bigger than a blip on their cash reserve.

> their core business (cloud properties and technology)

not their core business.

I just checked: Cloud computing represents only 8% of their revenues but one half of their profits. So even from a purely monetary perspective, it's an easy case to make that Cloud Computing is indeed their core business.

The core business is their most relevant line of business. Again if you're defining Amazon's core business as the largest percentage of their revenues, you're missing the point.

Assuming $18T (static) US dept, apple can pay it in 85 years?

Apple are doomed.

I'm sorry I don't get it, doomed why? Honest question.

It's sarcasm.

Industry analysts and the media often claim that Apple is doomed, but given their earnings obviously this is far from the case.

They still can't fix their software. (Drag and drop is intermittently borkened in El Capitan.)

And besides - what are they going to do with all that money?

At some point the actual size of the cash pile becomes an irrelevance - unless they're buying countries, secretly trying to set up a private army that could take on all the world's superpowers at the same time, or running a combined FTL/anti-gravity research lab.

> And besides - what are they going to do with all that money?

The consensus seems to be that they will enter larger markets, like automobiles. Cars cost billions to research and develop and are therefore a difficult and expensive market to enter. If Apple does enter and dominate this market, that would cost them a huge amount of their cash store but would open up additional revenue streams similar or greater than they currently enjoy.

Cars cost billions to research and develop and are therefore a difficult and expensive market to enter.

There's no market that Apple might enter that won't cost billions in research and development. How many billions have been invested already in iPhone, iPad and Mac product cycles?

If Apple does enter and dominate this market, that would cost them a huge amount of their cash store but would open up additional revenue streams similar or greater than they currently enjoy.

The development of the Apple car is being paid out of the R & D budget. Further, even with the tons of cash on hand, Apple has been active in bond markets around the world, since interest rates are near all-time lows. According to the conference call, Apple has borrowed around $56 billion, which they could easily fund all kinds of stuff, including the car.

Here's some evidence: "Apple R&D spending hit $8.1B in 2015, suggests continued work on massive project" http://appleinsider.com/articles/15/10/28/apple-rd-spending-...

Apple Pacemakers. Apple Aerospace. Apple Commercial Jumbo Jets. Apple Aircraft Carriers.

World class software requires a certain amount of money. But increasing the talent and will for better software is not a problem you can just throw more money at to solve. The number of people who can write software at Apple's level is finite, and you can't just buy your way into owning all of them.

Now imagine if McDonald's or Walmart got these same earnings. A large contingent would be calling for Tim Cook's head for earning billions while Apple's lowest earning American workers who assemble their computers earn "poverty" wages, even lower than Walmart's own minimum wage of $10 per hour. I do find it befuddling how some companies are given a pass but others aren't.

What do "Apple's lowest earning American workers" make?

edit: About $25k a year, with benefits according to the NY Times[1]. That would be about $13 an hour, although the NYT also quotes an employee making $11.25 an hour.

http://www.nytimes.com/2012/06/24/business/apple-store-worke...

There's a huge contingent of people doing exactly this.

Not exactly, especially when compared to the angry voices directed at Walmart or McDonald's. I implore you to count the number of news stories admonishing Walmart or McDonald's wages and the number of protests against their wages. Then compare it to what Apple gets.

I'm certainly not going to put much effort into proving you wrong when the impetus is on you to support your own point...

but google searches for "apple poor working conditions" yields over 9mm results while "walmart poor working conditions" yields only 350k.

If they can't finally get the iPhone 7 right, I'm not sure what's going to become of them.

Apple is the premium seller with highest customer satisfaction, but looking forward the following risks exist; iPod disappeared as a story and iPad doesn't seem to be a growth area. IWatch doesn't seem becoming as big as iPhone. On the iPhone, more focus is needed as 63% of revenue comes from phones and there all bullets seem to be fired: China expension, large screens.

IPhone market share peaked long time ago and iPhone isnt growing as fast as the smartphone industry overall. Due to 3M sales from China moving to Q4 we didn't see sales peak but Christmas quarter seems to be a sales peak for YoY growth. Initial activation nunbers from China suggest a YoY decrease in units sold as well as some providers suggest Apple cut orders.

Let's see what Tim Cook can do as he has to use some actions beyond calendar tricks in next 4 quarters. Investors will hate a YoY revenue and iphone sales drop.

Are you doing satire as well?

Reads like one of those awful investor blogs you get when you google AAPL

With that unbelievable 40% margin it seems like they could wipe out all competition by lowering their prices. I wonder if they worry that that would get them into monopoly territory and bring heavier regulation.

Apple earns 92% of all smartphone profits. There is no competition to wipe out.

http://www.wsj.com/articles/apples-share-of-smartphone-indus...

Profit-share is STILL a stupid, vanity metric. This is the metric that says, "If a well-funded competitor steals your market-share at the cost of running a loss, that is actually good for you."

Edit to add: This is the metric that says that life is awesome for taxi companies because Uber runs enormous losses. Profit is a useful metric (and Apple has awesome profits). Market share is a useful metric (and Apple has a small minority of the smartphone market share). Profit-share is something that somebody made up to make Apple's market share not seem as small.

You assert that iPhone market share is the important metric, but never actually demonstrate why. Care to put some reasoning behind it?

Your taxi analogy is unsatisfying for a number of reasons, not the least of which is the utterly unrelated market conditions between that and the mature consumer electronics industry, but feel free to expand if you think it will go somewhere.

edit: clarity

The only reasonable answer to you is: No, of course I won't try to justify why market share is a meaningful metric, and I particularly won't try to justify why this utterly standard metric is meaningful in the context of someone coming up with a ridiculous vanity metric and asserting that it has some value utterly divorced from any argumentation.

But what the hell, I'm feeling unreasonable today:

Market share is meaningful because it demonstrates the size of the market that Apple could potentially reach.

Market share is meaningful because if Apple's market share falls below a critical percentage, people will not target the iPhone for app development (as happened with the Mac and is currently happening with, say, Windows Phone).

In the case of app development targeting, I'd agree that Apple's market share is probably more important than Apple's profit share. However, the most relevant metric is probably iOS share of wallet vs. other mobile OSs. $MOBILE_OS can have an arbitrarily large market share but if people don't pay for apps on it, it's not going to be very interesting to app developers.

That said, market share is, of course, at least one of the relevant metrics but the market needs to be defined. Companies don't typically target the largest theoretically possible market for their products. They target a subset for a variety of reasons.

I think that's a slightly dated view. I don't think that the app market is mainly defined by "I'll pay $1 for an app" anymore. In a few fields, perhaps. But the most important apps are at this point free ones, and their users are monetized in other ways.

Except the data says differently. From the transcript of the conference call:

>The App Store set new all-time quarterly records for both the number of transacting customers and overall revenue. The strong performance of the App Store helped fuel 1.5 billion dollars in services revenue, also an all-time record.

In-app payments and other forms of monetization are still monetization that require users to pay money. That said, I agree there's a balancing act. If a hypothetical "luxury smartphone" had a tiny market share, it wouldn't be an attractive development target in general even if its buyers spent a lot of money on certain types of apps.

But the iPhone isn't really in that position. Certainly, it seems to have no trouble attracting developers and companies creating apps to target travel, subscription, and other services.

There are plenty of forms of monetization that don't require users to pay money (ad supported being the obvious one), and there are even more forms of monetization that require the users to pay money, but not pay money for an app (think Uber or Grubhub), and while it does seem to be the case that Android users are less likely to pay money for an app than iPhone users, I'm not aware of any sign that they are less likely to pay for a physical good or physical service through an app.

But clearly iPhone is not in that position, I agree!

and while it does seem to be the case that Android users are less likely to pay money for an app than iPhone users, I'm not aware of any sign that they are less likely to pay for a physical good or physical service through an app.

You mean like last year's holiday shopping numbers? From "Apple's iOS Has Once Again Decimated Android When It Comes To Data That Matters": http://www.businessinsider.com/ios-android-shopping-data-201...

>Adobe, which is tracking online shopping, reports the following: "iOS users drove four times as much mobile sales revenue as Android users, 79 and 21 percent respectively."

I think parent's point was about free apps that are just access points to a physical world service like airlines, hotels, Uber, Yelp, OpenTable, etc. I do suspect iPhone users spend more per capita generally because they're probably a wealthier demographic than Android. But I also suspect that overall marketshare is more relevant to the companies developing the apps in this case. (It's also somewhat beside the point though because everyone in this position is going to have an iOS and an Android app at a minumum.)

The relevant market would seem to be the handset market. Hasn't Apple's share of that been growing? It sure hasn't dropped much, if at all, while they've ramped production faster and higher than any product in history.

Just so we are clear, you mainly reasserted your opinions and gave a hypothetical about a market erosion that Apple clearly isn't in, given the fact that their absolute sales have risen.

I remain unconvinced.

It means that if Apple where to lower their prices then they'd only be hurting their own profits. Apple (and all scrupulous companies) are trying to maximize profits, not wipe out the competition.

"It" doesn't mean that, no. I mean, that may or may not be true, but profit share has no explanatory power here.

Profit share means that when you total up all the money that's been made as profits for the industry, 92% of that money went to Apple and 8% went to "other." If Apple where to wipe out the competition as you suggest, then they would gain that final 8% of profits[1]. But if they had to, say, lower their prices by 20% to achieve that, then they wouldn't come out ahead. And that's ignoring the anti-trust issues that would spring up. Thus, that's why I'm saying they are doing the right thing and pursuing a "scorched Earth" policy would be ill advised.

[1] Unless people won't buy from Apple even if they're the only game in town. But I doubt there's enough of those people to make a difference.

edit: formatting.

As a point of order, I didn't suggest that Apple wipe out anything.

But, no, you're wrong, and the way you're wrong is doing an excellent job of demonstrating the problems with profit share.

There's not an amount of "profit" out there. There is sort of an amount of "revenue" out there. But Apple takes in a small minority of the revenue associated with smart phones, as demonstrated by their market share, which is something on the general order of 14%. The fact that other vendors are inefficient at turning their revenue into profits is neither here nor there.

Of course, the actual analysis is far more complicated than that, since the market isn't in fact a static thing. If Apple turned say half of their unit profits into price reductions, it would have enormous, chaotic effects on the smartphone market. I don't have the ability to predict what the end result would be, and neither does anyone here. But profit share doesn't tell us that Apple has no opportunity, and in fact it is a metric crafted to draw attention from the fact that Apple has a low market share, which does a better (though certainly imperfect) job of showing the opportunity.

Except that's exactly how their competitors think, yet their competitors haven't wiped out the market by lowering their prices.

A large part of the success of the iPhone is the 40% margin for many reasons.

Well, the market has been wiped out. The iPhone in Europe is down to 14% market share, from 17% 2 years ago.

I don't think market share is the best metric for measuring iPhone success, or even necessarily one that Apple cares about (save for when it breaks in their favor). As with the Mac, they seem content to let their competitors fight over the high volume strata while staying in the upper tiers and banking the lion's share of the profits.

Market share is not really the number that matters to Apple, although it definitely seems to matter to people who want Apple to fail.

As abtinf pointed out, market share != profit share.

What percentage of smartphone profits does the iPhone garner in Europe?

That data, sadly, is not available anywhere – they don’t seem to disclose this. I only get results about SAMSUNG falling back in profits internationally, because in the US the premium market is focusing more on Apple. But no information about what the profits look like in Germany.

Consumers don't always choose based on price. There would be many consumers that would choose Android equipment even if Apple lowered their pricing. Then Apple would be competing, but without the war chest that allows them to, say, buy some chip companies and start designing their own chips or being able to pay in advance for parts and get a steep discount. Plus, as you note, if they achieved 92% marketshare, they'd fall under heavy regulation. This way, they're able to get 92% of the profit, but there's still significant competition to the point where Apple isn't even the largest by number of devices. It means that Apple doesn't have the market power to dictate terms - most people don't buy Apple equipment. It must continue innovating and producing great things. But it also means a lack of anti-trust attention since consumers have highly viable alternatives - alternatives that the majority of consumers worldwide use.

Similarly, there are certain industries that seem to be "cool" and people will try and compete in them regardless of profit. Smartphones seems like such a market. In a market where Apple and Samsung are the only two profitable makers and there's little innovative new features coming out, people still want in. I mean, Apple joined the smartphone market with a completely different design in the iPhone - no keyboard, capacitive multi-touch screen that dominated the phone, etc. Today, it's mostly polishing that formula introduced in 2007. Why would you want to enter an industry where you'd just be taking a display, a chip from Qualcomm or MediaTek, and a pretty standard body and camera, pair that with Android, and ship what everyone else is shipping? Are you doing anything better? Unlikely. And yet people want in even in the face of zero profits. So, even if Apple wiped out the current competition, it's likely that people would want in. And companies like OnePlus have shown that it's not terribly hard to join in the party.

Lowering margins probably wouldn't help Apple over the long run. Companies have shown a willingness to enter unprofitably and anti-trust attention on Apple could break their ability to continue profiting.

Apple is a premium* brand. They don't make commodity products.

I think there are better articles out there than this one [0], but it was the first search result.

Thinking about their behaviors through that lens is interesting and, to me, clarifies a lot of the strategy behind some of their actions. Fun stuff.

[0]:http://www.cnbc.com/2013/10/15/apple-is-a-luxury-brand-not-a... AUTO PLAY NON-MUTED VIDEO WARNING

Apple is in general a premium brand, not a luxury brand. The Apple Watch Edition is their first foray into luxury brand territory,

See: http://sethgodin.typepad.com/seths_blog/2009/05/luxury-vs-pr...

I agree. That's a great little writeup - thanks for posting it.

Hell of a non-commodity product that takes the size of share the iPhone takes. In the car market, marketshare numbers comparable to the iPhone's numbers do not accrue to luxury automobiles (which have far lower shares).

That's gross margin over production costs for their current products. Much of that margin goes towards massive R&D investments towards their future products. One of the keys to Apple's continued success is the huge investments they make in new materials and processes with a very long term view.

What competition to wipe out? In the flagship phone category Apple beats all. It is why they take all the profits since flagship phones is where profits are made.

I'd like to see Apple drop its margin requirements a bit and really work to get its product in more hands.

I think ultimately getting your product in more hands is a more worthy objective than "just" making the best products.

Greed is a hell of a drug

That greed made a vastly superior phone (back then) to anything on the market as it was mocked and ridiculed. Companies like (Sony) Ericsson were ridiculing it.

First phone with a decent development environment, SDK and App Store.

The two can be mutually exclusive.

Good phone... still greedy.

would greed be wiping out their competitors or keeping their large margins...?

Yeah, but how would they fund the development of their self-driving electric car that will only turn left?

(because, you know, it's going to be opinionated. I can just see the the Jony Ive ad now: "We rethought everything, took everything away that absolutely didn't need to be there. What we were left with was just that: left")

On top of how silly your statement is, if they were to do something like that, the car would only turn right, due to fuel concerns and not having to wait for lights.

Hell, a lot of fleet management software for companies like UPS already tries to minimize the amount of left turns for this very reason.

Apple shipped 48 million barometers this quarter, up from 39 million in Q4 of last year.

That's a good litmus

Mhm. You might say that the barometer shipments are a good...barometer of Apple's performance. More seriously, I'm actually interested because I'm on a mission to crowdsource atmospheric pressure data from at least 1 billion barometers, so the more Apple ships the better. Projects like PressureNet[1] and Sunshine[2] are only currently accessing a tiny portion of what's now available for weather forecasting.

[1] Android: https://play.google.com/store/apps/details?id=ca.cumulonimbu...

[2] iPhone: https://thesunshine.co/

Apple is leveraging its established ground to pursue more profit. This requires operation excellence. However, to win in the future, it needs products like what Jobs delivered. Based on the products Apple offered in the post-Jobs era so far, Apple has not shown any sign to provide a product that really shines as a whole. Even though I am a big fan of Apple, this makes me wonder its future.

edit: typo

A few [1] have argued that the last thing Apple needs now is a hit driven mentality. If there's an opportunity to make a difference to an entire market, sure... But otherwise the focus should be on stabilizing and growing the ecosystem of these post-PC devices and continuing to let the the Mac ecosystem swallow up what is left of the PC world's profits. So far, that's exactly what Tim Cook has been doing, with the watch being less about a new hit and more about keeping the innovative thinking warm while they exploit iOS/tvOS.

[1] http://blog.gardeviance.org/2011/10/why-i-believe-aapl-will-...

With the ground Apple has taken and the product's life cycle, yes. It's natural to start grabbing more and more profit. That's what business is for. However, the advance of operation excellence could also post a bigger challenge to the organization's product-oriented DNA. It would not be an easy task to keep both balanced. Most of the time, I found things went the operation route. Whether the past few products were big hit was less related here, it is the lower quality of the deliverables as a product that raises my concern.

Yes, we saw this last time with the Mac devolving into myriad options and variants under Scully, Schindler and Amelio. The true test of Jobs' legacy will be if he left structures in place to keep creating the new while building and growing ecosystems for the old.

I think about this a lot, but I can't come up with a single product that has an average selling price of over $600, that pretty much EVERYONE (at least adults) in the world would need, that they would also want to upgrade every two years.

The Watch would be this device as long as its gets more independent of the phone. Maybe a car in the future!

But in the near term, I would imagine their growth would taper off as more and more of the developing world get an iPhone (China still has few more years of growth) & Moore's law means features aren't added as often.

> But in the near term, I would imagine their growth would taper off as more and more of the developing world get an iPhone (China still has few more years of growth) & Moore's law means features aren't added as often.

Apple has enough in the bank to make a strategic shift or leap into another market when that starts to happens (who knows what they haven't released that they've been prototyping for years).

The problem is not about resources. It's about the organization's product-oriented DNA and its familiarity to the field it works on. I hope Apple could show us some more polished products so that as someone who works on iOS could see a clearer and brighter future.

I hope so!

I mean what would buy apart from a phone and a watch (& a car) thats worth more than $500?

Smart Shoes? :)

An iRobot: android capable of basic tasks to help out with repetitive chores. Costs much more than $600 and every few years it gets progressively less stupid, meaning that people will happily shell out money for the latest and greatest because the newest one is just absolutely gorgeous and can not only take the dog for a walk but will teach you another language.

While they're busy counting money, they managed to ship an iOS who stutters on their flagship phone : https://www.youtube.com/watch?v=cGCA_v4WUaI

The performance downgrade is even worse on last years 6, 6+ and 5S, they stutter and drop frames while scrolling.

My eyes must be getting old, but I don't see anything here.

But anyway, show me that test with a full battery. How do you know the phone isn't coming in and out of a power conservation mode when you're doing your test on a 12% battery?

What if it is? That would also suck. They control the hardware, firmware, OS and apps. If there are glitches it's no-one else's fault.

Okay, then I'm definitely old.

Why? Because I look upon the iPhone, or any smartphone, in whatever incarnation you are holding, to be a amazing feat of engineering. The fact it works like it does is something nobody could have forseen 10 years ago.

And here we are bitching about a glitch in a transition effect. You need some perspective, brother.

While I agree totally with that sentiment in general, the topic at hand is an apparent regression in performance despite improved hardware.

My perspective is that I will enjoy the wondrous functionality more without glitchy transitions. Get them right or turn them off. You can call it bitching, but fit and finish is a major part of the apple brand that people value.

1) They were mocking their competitor in this same area for years.

2) They explicitly praise improved user experience and performance enhancement for their most recent iOS shipped

3) These issues weren't on the iOS prior update.

So, bitching ? No thanks my friend, I just want something that was working as advertised before fixed. If I wanted frame drops and stuttering, I wouldn't pay 800$ for a phone, but get a 100$ Android phone (which at modern hardware doesn't even have those issues anymore that are so apparent).

Stop excusing companies.

Huh. No such problems on my 6. In any event, if it's an easy break, it's an easy fix for them.

Same here. I mean, occasionally there's a frame drop here and there but it happens at roughly the same rate as it did when my 6 had iOS 8.x.x.

I'd say the most serious "issue" is that animations/transitions still take a lot longer than they should, and as far as I can tell you can't trigger any action while the transition isn't finished. i.e. you press home to go to the home screen and while the home screen is appearing you can't press an app icon yet.

I really don't understand why you got downvoted. I am extremely worried by the latest iOS release that managed to make an iphone 6s laggier on ios 9.1 than an iphone 5 on ios 8 for an app i'm currently developping. Provided that ios 9 brings absolutely nothing fundamentaly new, and how buggy ios 9.0 was, that makes me hope really strongly that they had the interns work on that release while the good developpers were working on revamping the whole os for ios10.

We all know that blackberry was still making great sales until the very last moments of its expected collapse, simply because good business managers always find a way to grab some profits in the short term eventhough things look bad in the long term.

iOS 9.1 is causing major performance issues on the iPhone 6s? I assume the recommendation is to stick with 9.0.2 at this point then?

9.1 is actually better than 9.0, so you should upgrade. I told my client who told me about performance issues to upgrade to 9.1 to see if it's better, and it was, but just a little bit. We were then stunned to discover that his old iphone 5 ( not even 5s) performed better on ios 8.

I knew before that ios 9 had huge graphical performances issues, but i didn't know it was that bad.

Since it's graphical, i have another theory which is that johnny ive asked to add invisible gui effects a little bit everywhere in the OS, and that it baddly affected the overall performance of the OS.

You have no choice with 6S, since it shipped with iOS9. 9.0.2 stutters too.

Yes, when I bought it (at the Apple Store), it came with iOS9. I have updated it to 9.0.2 but have yet to update it to 9.1. I haven't noticed any problems, though (except for one issue with the Facebook app going crazy -- so that the phone was hot to the touch when I picked it up -- but that only happened once).

I'm not surprised, it's hard to break Apple bias (and I own an iPhone), also some people don't see the difference between 60 fps and less.

Regarding the performance degradation, I assume it has to do with Metal. Apple said iOS9 will feature Metal as a replacement for OpenGL throughout the system for better performance. Well we didn't see any of that. The stutters have been there since Beta 1 in June.

Oh ok, the change to metal explains it all then. Thanks.

I love the profits that this industry can bring, that much is amazing. Deploying that capital, like on R&D and acquisition is Apple's bigger problem now. The dividend is not bad either!

With the added competition from Microsoft, I'm sure they will be pushing even harder for the next release. I am hoping a recent down-trend will be well reverse via software updates to come, apparently the phones need some more optimization? But also nice to see competition on features, form factor, power, display size... seems like some really good Surface products and I'm not following Apple as closely I guess.

The market has no idea how to value it. Which should mean a huge opportunity for someone who does?

(I wonder if 10 hours late this can get any responses)

Something important to consider is whether this beat analyst expectations or not. Your earnings could grow by 20%, but if the stock had priced in 25% growth then you'll still see your stock drop after a report.

Anybody know whether this beat expectations or not? It doesn't explicitly say it in the press release.

Edit: According to Fortune, looks like this was a modest beat: http://fortune.com/2015/10/27/apple-beats-expectations-stock...

Well.. considering AAPL has about the same P/E as IBM/HP, which has about -10% growth, I would personally say the growth is not priced in at all.

But even though it's priced as if the company is dying, analysts are still expecting it to grow 20%+.

The disconnect is almost funny.

Wall Street usually has wildly unrealistic expectations for Apple, so expect this modest beat to be spun as a significant miss.

Why was this downvoted? Seems like a perfectly reasonable, helpful, and certainly non-inflammatory post.

Eventually people will realize how grossly overpriced their iPhone is and the party will slowly come to an end... There are so many great alternatives at much lower cost.

iPhone gets them ~63%. iPad brings less than Mac hardware. Apple Watch is just ~4% after a year. Investors should probably be a bit worried.

Apple watch at ~4% in less than a year is amazing. Especially considering that most people are claiming it is an abject failure. Version 2 is typically when an Apple product hits its stride so I expect to see it grow.

The iPad was great when the iPhone was small, but Apple has basically cannibalized iPads with plus size phones. The large iPad Pro will be a wait and see thing.

There are so many interesting dynamics going on with tablets that it's really hard to read the tea leaves about where things are going. You seem to have long (in part because unsubsidized) upgrade cycles, larger phones, questions of reconvergence(?) with laptops, indirect competitors like Chromebooks in areas like education, very cheap entrants like the $50 Amazon Fire--the list goes on. I'm neither bearish nor bullish on tablets as a category simply because I find it so hard to really get my head around the space.

If the past decade and a half of soaring profits and products that consumers love have taught me anything about Apple, it's that they're doomed.

Apple is doomed. Always has been and will always be. /s

The beleaguered Performa maker…

Where did you get the 4% data? If that's true then it's absurd that the watch is on track to become a TEN BILLION DOLLARS business in its first iteration.

People forget that 4% of AAPL's revenue is about $10 billion.

It wouldn't surprise me. I remember reading last year that iTunes alone is a larger business than Yahoo. The scale of Apple is unreal.

> Apple Watch is just ~4% after a year The Apple Watch just went on sale this year.

There are people who make under $10 an hour assembling Apple computers in California. I teach at a community college and some of my students are employed at the factory. It's interesting how Apple gets a complete pass on their wages but companies that make a fraction of Apple's profits like Walmart or McDonald's are constantly criticized for how they pay their employees.

What computers are Apple assembling in California? They assemble the Mac Pro in Texas.

Looks like this has been going on for a while http://techcrunch.com/2012/12/03/the-new-imac-designed-by-ap...

They're assembling the iMacs there and a few others

You mean Flextronics?

http://appleinsider.com/articles/13/06/13/us-assembly-of-app...

1) They don't have to work there*

2) If they are more qualified for a higher paying position or different job, they should move to it.

Apple doesn't owe them anything, and it certainly doesn't need people attempting to tell Apple how to pay their employees. If you don't like it, move to another group, end of story.

Edits to be nicer and clearer

"They don't have to work there*"

That's not an excuse.

"If they are more qualified for a higher paying position or different job, they should move to it."

There are all kinds of reasons why a person wouldn't move jobs. Pay is not the only reason.

"Apple doesn't owe them anything, and it certainly doesn't need people attempting to tell Apple how to pay their employees. If you don't like it, move to another group, end of story."

Would Apple be anywhere near as successful if they didn't start in the US?

I agree actually. Walmart or McDonald's could use the same argument too but we know that would be a PR disaster if they did. Not so with Apple since the large contingent who demonize Walmart and McDonald's for their wages give Apple a complete pass

The importance of lifestyle branding! A lot of the iPhone sale could be attributed to the Rose Gold 6s.

  leaving the world better than we found it.

Good Grief!

Edit: Did I hit a nerve or what!

Reply on news.ycombinator.com