> The Company posted quarterly revenue of $58 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10 percent.
So they are shrinking, not growing.
So they are shrinking, not growing.
Despite their Apple News+, Apple Card, Apple Arcade and Apple TV+ services/subscription revenues not having kicked in yet so I'd expect they'll return to overall revenue/profit growth next year when all their revenue centers are operating on full cylinders.
They generate $5 billion in revenue on their Watches and Airpods alone? What a crazy good business they have.
But also Apple is a premium products company so not everyone needs to have one, just a decent sized niche. At $400-500 they make a killing off each sale. Same with AirPods at $200 too... other similar bluetooth pod earphones sell for $40-60 on Amazon and they're pretty good products, so it can't be too expensive to produce.
https://www.encyclopedia.com/humanities/dictionaries-thesaur...
I think it's a fixable problem to come up with a cheaper/more attractive product than the current iphone. Simply dropping the price might do the trick for a lot of people. In the same way the keyboard situation is a fixable problem that might improve their fortunes on the laptop front.
China's economy is still cratering.
That's the second sentence in your link. And it says Oppo grew at 1.1% (in 2018q4)-- that's not exactly winning. Xiaomi plummeted 28%, even more than apple. There's clearly more going on than a simple competition between apple and Huawei.
https://www.engadget.com/2019/03/13/smartphone-sales-china-p...
More recent data shows Oppo and Vivo are struggling to increase sales too. Huawei is the only company growing in the Chinese market. 2019q1 data:
https://www.canalys.com/newsroom/canalys-huawei-gains-record...
However, the overall smartphone market is shrinking in China. The economy there is not doing well.
Without breaking out China vs non-China you would have concluded that Apple is slowing down/customers unhappy/products unattractive. This would have been the wrong conclusion for the non-China world.
You don't treat the world as one unified market.
Sure is important for the iPhone, but it's not important for the iPad, Mac and Services.
1 https://www.macrumors.com/2019/04/30/apple-36-million-iphone...
2 https://www.apple.com/newsroom/2019/04/apple-reports-second-...
People who constantly expect Apple’s rate of growth to continue at historic levels or even increase likely believe that Apple depends on sales in China to achieve this, and they are probably right. But nowhere in Apple being Apple is it mandated that they must continue their existing rate of growth. Indeed, as this quarter shows, that is impossible.
https://www.wsj.com/articles/china-growth-beats-expectations...
"China’s economic growth held to a 6.4% rate in the first three months of the year as factory production picked up significantly amid signs authorities worked forcefully to stabilize business following months of weakness."
If Apple isn't doing well in China it isn't because of the economy.
The concern with China is that they might work so forcefully to stabilize business that people report numbers that look good even if they are not entirely true.
What's it going to take for China to not crater and how far out is that horizon?
They've been riding an unsustainable approach since the great recession mess tanked the global consumer. Simply put, they have to switch to a sustainable model for their economy. It's a painful process, made worse by the choices of delay that they've previously made.
It's also not uncommon. The US nearly got thrown into a depression by the stupidity of the Fed trying to avoid a recession after 9/11 and the stock market crash post dotcom bubble. You can try to dodge reality, usually though it'll just compound the painful price you pay later. In China's case, the potential price is best represented by what has happened to Japan through their previous attempts to dodge economic reality (via debt, keeping zombie corporations alive, etc).
China's organic rate of growth would be very low (for them, versus the recent past). Strip out the fake numbers, then reduce the stimulus efforts to mostly emergency circumstances, and you'd see something more typical like 2% to 3% GDP growth. That's obviously unacceptable to the government authorities.
The Chinese Government is trying to both delay and buffer that process, of dropping from the previously fast rates of growth to the rates you see in more developed nations. I think they fully understand it's inevitable. They want to minimize the social disharmony of it, for the purpose of retaining their power. The fear of revolution is always present. They're trading future stagnation for present buffering of the downside to dropping rapidly from high growth to slow growth (they'll worry about the consequences of that trade later). China faces the not enviable situation of ending up with a mature, slow growth economy, while still having hundreds of millions of people in near third world poverty. I think that's impossible for them to avoid given the scale of their population, the present phase that it's in in terms of transition, and typical rates of more normal organic economic expansion (whether domestically or in the global economy).
How do you explain to 500 million extremely poor people that the best days of growth are permanently over and they'll never get to become well-off like the lucky ~10% that were in the right places in eastern China 20-30 years ago and got to ride the easy boom? To maintain that fantasy (that everyone will get to participate, even though the party is already over), you need to project extremely high rates of growth. Traditional service economies with their far slower growth can never deliver on that.
Except Huawei manage a 30%+ growth in its own region.
They've been diversifying their revenue/profit stream with their services push for quite some time now, and continue to do so.