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Apple Profits Fall For First Time In A Decade  
User currently offlineOA260 From Ireland, joined Nov 2006, 27308 posts, RR: 60
Posted (1 year 8 months 21 hours ago) and read 2558 times:

So whats the future for Apple ? Have the glory days ended?

Apple profits fall for first time in a decade

Computer and smartphone maker Apple has reported its first quarterly drop in profits in a decade.

The iPhone maker made a net profit of $9.5bn (£6.2bn) for the three months to the end of March, down from the $11.6bn it reported at the same time last year.

But the results were better than many investors had expected, and strong sales of iPhones and iPads helped boost revenues to $43.6bn.

Concerns among investors had caused Apple's share price to plummet.

It had lost around 40% of its stock market value since hitting an all-time high in September last year.

http://www.bbc.co.uk/news/business-22274324

48 replies: All unread, showing first 25:
 
User currently offlineBraybuddy From Ireland, joined Aug 2004, 5811 posts, RR: 31
Reply 1, posted (1 year 8 months 21 hours ago) and read 2558 times:

When you're top of the pile, there's only one way you can go . . .

User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 2, posted (1 year 8 months 21 hours ago) and read 2552 times:

Quoting OA260 (Thread starter):
So whats the future for Apple ? Have the glory days ended?

9.5 BUSD and over 20% margin. Pretty damn good in my book.


User currently offlineKlaus From Germany, joined Jul 2001, 21521 posts, RR: 53
Reply 3, posted (1 year 8 months 21 hours ago) and read 2547 times:

Given the state and particularly the trajectory of their competition and of the overall computer market, I'd look elsewhere for signs of impending doom.

User currently offlineFlighty From United States of America, joined Apr 2007, 8765 posts, RR: 3
Reply 4, posted (1 year 8 months 19 hours ago) and read 2491 times:

Depends. A delta of 2 bln usd per quarter in P&L year over year is incredibly bad.


But...

Quoting Braybuddy (Reply 1):

When you're top of the pile, there's only one way you can go . . .

So maybe they should just count 2012 as a lucky year and move on.


User currently offlineKen777 From United States of America, joined Mar 2004, 8474 posts, RR: 9
Reply 5, posted (1 year 8 months 19 hours ago) and read 2488 times:

Apple's iTunes Store broke the $4 Billion barrier for the 3 months and they have 74% of the app market. Phones and pads are blowing out the door (with new version not far off) an the Mac has slowed a bit (probably at the hand of the iPad), but that might have been to supply issues of the new iMac.

Overall Apple is still showing the PC world how to do it.


User currently offlinecasinterest From United States of America, joined Feb 2005, 4792 posts, RR: 3
Reply 6, posted (1 year 8 months 6 hours ago) and read 2361 times:

Quoting Ken777 (Reply 5):
Apple's iTunes Store broke the $4 Billion barrier for the 3 months and they have 74% of the app market. Phones and pads are blowing out the door (with new version not far off) an the Mac has slowed a bit (probably at the hand of the iPad), but that might have been to supply issues of the new iMac.

Overall Apple is still showing the PC world how to do it.

The IPAD numbers were phenomenal when you step back and look at it a bit. I am sure the mini is eating the margin's there, but the Mini and the regular Ipad are selling a lot of volume.

The Iphone numbers were up as well. Too many investing folks are focusing on the fact that the margins are slipping, yet they don't recognize what has happened. All that clamoring for a low cost low end phone? The Iphone 4 is it. It got by some estimates 15% of sales over the last quarter. The Iphone 4s got about 20-30 %. The Iphone 5 got over 50 % of the sales. Apple has moved into a market where, especially in the US, they have a logical choice product for those wanting a cheap phone with a contract.

Itunes is a story worth watching, and I think this is where a lot of the growth is going to come from. I think one of the things apple has to be aware of and actively combating is the ability of Amazon, Netflix, and Hulu to capitalize on streaming apps over their products. Apple may need to combat that by offering those services over the itv and other devices. I also expect Apple to get a bit more serious with their ITV offering in order to allow gaming choices.


All in all, Apple is making money, but they need to start getting to work on a Phablet phone, and taking in more of their revenue through Apps and video markets.



Older than I just was ,and younger than I will soo be.
User currently offlineRevelation From United States of America, joined Feb 2005, 12957 posts, RR: 25
Reply 7, posted (1 year 8 months 6 hours ago) and read 2354 times:

Quoting OA260 (Thread starter):
Have the glory days ended?

In short, yes.

The signs are clear.

They clearly don't roll out innovation at the rate they used to.

They pulled off hit after hit (iPod, iPhone, iPad) and there's no hint of another gangbuster emerging.

They used to be miles ahead on software and hardware, now they are not.

They find themselves having to cheapen product to hit lower price points instead of charging premium prices.

They used to keep the high ground for themselves, now they find that they are getting undermined from below.

They are using their enormous bankroll to try to keep Wall Street happy instead of spending it on innovative products.

So, not doom and gloom, but yes, not the glory days either.



Inspiration, move me brightly!
User currently offlinecasinterest From United States of America, joined Feb 2005, 4792 posts, RR: 3
Reply 8, posted (1 year 8 months 5 hours ago) and read 2344 times:

Quoting Revelation (Reply 7):
They clearly don't roll out innovation at the rate they used to.

????

Quoting Revelation (Reply 7):
They pulled off hit after hit (iPod, iPhone, iPad) and there's no hint of another gangbuster emerging.

Ipod (2001), Iphone (2007), IPad (2010)....

2013 and 2014 would still be inside their window.

Quoting Revelation (Reply 7):
They used to be miles ahead on software and hardware, now they are not.

Based on some of the reviews I have seen of the S4, they may be miles ahead.

Quoting Revelation (Reply 7):
They find themselves having to cheapen product to hit lower price points instead of charging premium prices.

This is commodotization, which is a very real battle they are facing. However it is good for consumers as it gets the costs down and the quality up.



Older than I just was ,and younger than I will soo be.
User currently offlineRevelation From United States of America, joined Feb 2005, 12957 posts, RR: 25
Reply 9, posted (1 year 8 months 3 hours ago) and read 2320 times:

Quoting casinterest (Reply 8):
Ipod (2001), Iphone (2007), IPad (2010)....

iPad isn't a lot of innovation. It's basically an iPhone in a different form factor, minus the telephony bits.



Inspiration, move me brightly!
User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2838 posts, RR: 4
Reply 10, posted (1 year 8 months 2 hours ago) and read 2295 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Quoting Revelation (Reply 9):
iPad isn't a lot of innovation. It's basically an iPhone in a different form factor, minus the telephony bits.

Perhaps, but it helped launch an all new segment in the industry. Tablets had been out for years before the iPad, but the market exploded after it's launch. I know I never thought about getting a tablet until the iPad came out, and now I'm glued.

This decline at least to me, was expected. They haven't done anything overly innovative in the last year or so and I keep hearing the PC segment is slowing. They need to go back to the game changing mentality and stop chasing the low income segment with a cheaper iPhone. A high priced iPhone never stopped people from buying them before. Why lower your margins to get the few people that consider it out of reach? They also desperately need to refresh the iPhone interface. I like it, but the same old set up is starting to get old. Their next big step I think has to be the television. I have their AppleTv now and I love it, but it still feels like it is missing something. I personally think they should have tried to buy Sony with their pile of cash. Mate the hardware and knowledge brought from Sony's tv department with the Apple operating system. Match made in heaven if you ask me.
Pat



All of the opinions stated above are mine and do not represent Airliners.net or my employer unless otherwise stated.
User currently offlineKen777 From United States of America, joined Mar 2004, 8474 posts, RR: 9
Reply 11, posted (1 year 8 months 1 hour ago) and read 2271 times:

Quoting casinterest (Reply 6):
The IPAD numbers were phenomenal when you step back and look at it a bit. I am sure the mini is eating the margin's there, but the Mini and the regular Ipad are selling a lot of volume.

The mini may be eating up some of the iPad gross margin, but it has exploded the volume of iPads sold - generating GM based on volume.

Just as important, each mini sold puts the customer on the iOS platform, with Apple getting the cut of sales from the AppStore. If you look at long term revenues from each mini sold I think that the only thing you can do is smile.

Quoting Revelation (Reply 7):
They clearly don't roll out innovation at the rate they used to.

Have you seen the new iMac?

Innovation can be related to new, innovative designs of an existing product as well as entering a new product line.

Maybe people are thinking of an iWatch (which would probably be profitable) or iTV (which is already making money.

Quoting Revelation (Reply 7):
They used to be miles ahead on software and hardware, now they are not.

That's a matter of opinion. Some people like the fact that Android allows companies to make all the changed they want. Others like the continuation of a single iOS, upgraded when new technology is available, but generally protecting the customer's investments in apps.

Hardware depends on what you consider important. Apple has some engineers that are as bright as their design teams. The use of aluminum in their products is, for me, a pretty impressive approach. Even the MacBook Air only needs 4 pads on the bottom - not the 6 that was traditional in the more flexible light weight plastic portables.

Quoting Revelation (Reply 7):
They are using their enormous bankroll to try to keep Wall Street happy instead of spending it on innovative products.

With $144 Billion in cash Apple can address both. Investments in R&D continues

Quoting Revelation (Reply 9):
iPad isn't a lot of innovation. It's basically an iPhone in a different form factor, minus the telephony bits.

Might be because Apple first developed the initial interface and decided to go with the phone before that tablet. When Steve Jobs introduced the iPad he made a point of saying that if you own an iPhone or iPod touch "you already know how to use it",

What you are looking at is iOS devices, where iOS is a subset of OS X. That is a lot of long term innovation and it hasn't ended yet.


User currently offlineFlighty From United States of America, joined Apr 2007, 8765 posts, RR: 3
Reply 12, posted (1 year 8 months 1 hour ago) and read 2264 times:

Quoting Revelation (Reply 9):
iPad isn't a lot of innovation. It's basically an iPhone in a different form factor, minus the telephony bits.

Okay, that is true. Apple is not a huge innovation company. They integrate. They take disorganized, useless technology and make products people other than nerds and D&D clubs want to own / use. Usually Apple's innovations are in marketing and user experience. UE is a huge profit center.


User currently offlinena From Germany, joined Dec 1999, 10817 posts, RR: 9
Reply 13, posted (1 year 8 months 1 hour ago) and read 2260 times:

What goes up, must come down. Apple´s insane profits cant go on forever. Even if they make less money now, they are still a ridiculously rich company making truckloads of cash, come on.

User currently onlineDreadnought From United States of America, joined Feb 2008, 8954 posts, RR: 24
Reply 14, posted (1 year 8 months ago) and read 2254 times:

You can't expect double digit growth year after year after year. Scale catches up to you. We saw that when Microsoft plateaued in the late 90s - once you've gotten so big, your P&L is going to trend with the overall market (or segment)

One thing that always makes me laugh is that while Apple represents everything that OWS and similar-minded people like to protest (all their manufacturing is outsourced to Asia, they keep most of their money offshore to avoid taxes, sell at high profit margins, huge management bonuses and salaries), everyone's cool with it because...

because...

Why?



Veni Vidi Castratavi Illegitimos
User currently offlinecasinterest From United States of America, joined Feb 2005, 4792 posts, RR: 3
Reply 15, posted (1 year 8 months ago) and read 2246 times:

Quoting Dreadnought (Reply 14):

One thing that always makes me laugh is that while Apple represents everything that OWS and similar-minded people like to protest (all their manufacturing is outsourced to Asia, they keep most of their money offshore to avoid taxes, sell at high profit margins, huge management bonuses and salaries), everyone's cool with it because...

because...

Why?

Because your argument is a bit weak in this case as Apple is a global company that is makiing profits in other countries. They also have high levels of R&D and Sales in the countries they are present in,

They also build a product that allows multiple companies from many countries to profit through music, video, and software.

It isn't a cut and dried issue.

Should they manufacture more in the US? yes. based on numbers. However as manufacturing is so cheap due to policy in China, they have no choice but to manufacture there. However they are currently starting to do R&D in the US as well.



Older than I just was ,and younger than I will soo be.
User currently offlineflyingturtle From Switzerland, joined Oct 2011, 2545 posts, RR: 14
Reply 16, posted (1 year 8 months ago) and read 2242 times:

Quoting Dreadnought (Reply 14):
because...

Why?

Because Apple has left the geek / education business, and now caters the moron / fashion market.

I grew up with the LC III and Performa 5200 computers. I've used the Quadra and the LC II.


David



Keeping calm is terrorism against those who want to live in fear.
User currently offlineKlaus From Germany, joined Jul 2001, 21521 posts, RR: 53
Reply 17, posted (1 year 8 months ago) and read 2230 times:

Quoting Flighty (Reply 12):
Apple is not a huge innovation company. They integrate. They take disorganized, useless technology and make products people other than nerds and D&D clubs want to own / use. Usually Apple's innovations are in marketing and user experience. UE is a huge profit center.

There is a big misunderstanding about what "innovation" actually is.

Integrating components and technologies into an attractive and long-term satisfying product is actually the hardest and most complex part of it all if you're doing it right (which few do) – that is why they reap the lion's share of the revenue and profits on this basis.

Quoting casinterest (Reply 15):
Should they manufacture more in the US? yes. based on numbers. However as manufacturing is so cheap due to policy in China, they have no choice but to manufacture there. However they are currently starting to do R&D in the US as well.

Their core R&D has always been in the US, and I'm not aware of any intention to change that.

What they've just recently announced is that they will start to manufacture one of their Mac lines in the US as well.


User currently offlinecjg225 From United States of America, joined Feb 2013, 887 posts, RR: 0
Reply 18, posted (1 year 7 months 4 weeks 1 day 23 hours ago) and read 2219 times:

Well, I am thoroughly enjoying seeing my portfolio tank...  banghead  I know I was overweighted with Apple with which to begin, and I bought most of it low enough that I can see the stock drop a lot farther before it becomes a HUGE issue, but... this still hurts. I am glad I sold some shares at 700; I just wish I'd sold more back when it was in the 500-600 range. May be a long time, if ever, before it's back there. I am debating what to do with a large chunk of my shares now. I keep holding out hope that Apple will do something groundbreaking again, but all I read in the news is doom and gloom about Apple's future prospects... yet for some reason I don't man up and sell because I think, "oh, it'll go back up again."

[Edited 2013-04-24 12:40:39]


Restoring Penn State's transportation heritage...
User currently offlineflyingturtle From Switzerland, joined Oct 2011, 2545 posts, RR: 14
Reply 19, posted (1 year 7 months 4 weeks 1 day 23 hours ago) and read 2201 times:

Quoting cjg225 (Reply 18):
yet for some reason I don't man up and sell because I think, "oh, it'll go back up again."

That's what I thought back in 2001, when I experimented with shares.

I lost about 500 $.

It was Swissair.


David



Keeping calm is terrorism against those who want to live in fear.
User currently offlineMSPNWA From United States of America, joined Apr 2009, 2021 posts, RR: 2
Reply 20, posted (1 year 7 months 4 weeks 1 day 22 hours ago) and read 2191 times:

Quoting Dreadnought (Reply 14):
You can't expect double digit growth year after year after year. Scale catches up to you. We saw that when Microsoft plateaued in the late 90s - once you've gotten so big, your P&L is going to trend with the overall market (or segment)

Pretty much. You just can't climb at an increasing rate forever. Apple is maturing as a company. It will continue to make a lot money in the foreseeable future, but that doesn't mean it's an attractive investment.

Quoting Dreadnought (Reply 14):
One thing that always makes me laugh is that while Apple represents everything that OWS and similar-minded people like to protest (all their manufacturing is outsourced to Asia, they keep most of their money offshore to avoid taxes, sell at high profit margins, huge management bonuses and salaries), everyone's cool with it because...

because...

Why?

I don't understand that either. Blind cult following would be my guess. It's kinda funny because I'm typing this right now on a MBP running Windows (which I find to be a far superior OS). I like the "quality" hardware of the Apple with the software of Microsoft. I didn't have one issue with that combo until . . . Just a month or so ago I had a sudden hard drive failure, and since I'm a student I had to quick get my old PC laptop for a class that evening. My MBP was only about 15 months old at the time, and I was pretty disappointed with a failure that I had never had on any PC I'd owned or used. So I get a new hard drive and try to set it up. Still doesn't work. What the . . .? So I do some more research, and it turns out it's not the drive itself, it's the hard drive cable. And I guess it's not uncommon problem. Pretty pathetic that a cheap cable disables you without warning. When you pay this much for a laptop, a premium over others because of the hardware features, you wonder what exactly you're paying for with such cheap cables are inside. It's obviously a cost cutting measure, contributing to those ridiculous margins. Even though I like this laptop, I just can't see myself buying another product from Apple. I'm paying for hype. That's not worth it for the consumer.


User currently offlinecjg225 From United States of America, joined Feb 2013, 887 posts, RR: 0
Reply 21, posted (1 year 7 months 4 weeks 1 day 22 hours ago) and read 2172 times:

Quoting MSPNWA (Reply 20):

My fear is that more people figure out what you've figured out.

I have an (un)healthy amount of Apple stock, but I have never paid (nor will ever pay) for an Apple product (though, in the interest of disclosure, I have several Apple products, some of which I use very frequently, but they were gifted to me). I am a dyed-in-the-wool PC user. When I graduate (again and again) and I move off my parents' cell phone plan, I fully intend on getting an Android or Windows phone. Apple products (software and hardware) are just not that good in my eyes. Apple is a very, very inflexible organization that does a very good job at masking its many warts behind an air of being hip, trendy, and young (hence their ludicrous "I'm a Mac/I'm a PC" commercials years ago).



Restoring Penn State's transportation heritage...
User currently offlinevirginblue4 From United Kingdom, joined Jun 2008, 916 posts, RR: 0
Reply 22, posted (1 year 7 months 4 weeks 1 day 22 hours ago) and read 2172 times:

Quoting MSPNWA (Reply 20):

Pretty clear that you're angry, so to justify it, you start bashing a company that is known high quality products and great after sales.

I highly doubt they are using cheap cables to improve their margins. Do you realise how ridiculous that sounds?



The amazing tale of flight.
User currently offlineRevelation From United States of America, joined Feb 2005, 12957 posts, RR: 25
Reply 23, posted (1 year 7 months 4 weeks 1 day 21 hours ago) and read 2147 times:

Quoting Ken777 (Reply 11):
With $144 Billion in cash Apple can address both.

But the point is that they now feel the need to, whereas before they didn't.

Quoting Dreadnought (Reply 14):
You can't expect double digit growth year after year after year.

It's a lot easier when you are miles ahead of the competition, which is no longer the case.



Inspiration, move me brightly!
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7978 posts, RR: 51
Reply 24, posted (1 year 7 months 4 weeks 1 day 21 hours ago) and read 2143 times:

I'm glad they aren't heading to an undisputed #1 position... I mean I'm not an Apple person at all but I'm glad they are there (along with their competitors) putting out new, innovative products. If they became so good that they put everyone out of business or marginalized, I doubt we'd have the rate of improvement on our technology like we see today


Ironically I have never flown a Delta MD-90 :)
25 Post contains images Ken777 : Because Apple delivers. There are some exceptional people at Apple - Jonathan Ive is a good example - and thee people earn their money. All you have
26 DeltaMD90 : Maybe I should have been more clear but I meant #1 by such a wide margin that they basically kill everyone off and then start slacking off, if that m
27 Dreadnought : So does Exxon, and Exxon's profit margins are minuscule compared to Apple, Exxon employs far more people, particularly in the US, and delivers a prod
28 DocLightning : You speak as if these things all happened in rapid succession. The iPod was introduced in 2001, the iPhone in 2007, and the iPad in 2010. Right now t
29 Post contains links thunderboltdrgn : Apple is a part of the PC-world as well since a Macintosh is a PC just as much as a computer with Windows or Linux is. Then add to that all the free
30 Revelation : This is not surprising. Apple has set the world on its head via innovation. The advances they've made in packaging, integration, aesthetic/visual des
31 Klaus : That absolutely pales relative to the massive amount of money Samsung pumps into PR and sales support (a high multiple of what Apple is spending). An
32 Vinniewinnie : Some comments here are pretty surprising (and markets too): There is only so much innovation once can do, and in a competitive market competitors at s
33 Dreadnought : The do not. Apple shut down their last manufacturing plant (in Elk Grove CA), in 2004. They buy all their products from other maunufacturers (mostly
34 Asturias : Very true. A shame they left the high-quality market.
35 virginblue4 : Not true at all. Have you seen how well the iPad is doing in education? They've also introduced iTunes U and they've even created Macs ONLY for the e
36 Dreadnought : Generally speaking yes, their quality is pretty good, with one exception. I think their PC and laptop keyboards, while stylish, are utter crap.
37 Elite : What's wrong with their keyboards? If there's one thing to pick on, I've never liked the Apple mouse, from the new Mighty Mouse to the old ball mouse
38 OA260 : I have to say I love the keyboard and the magic mouse. It does get some getting used to but its easier IMHO than others I have used before.
39 Post contains links StarAC17 : Probably not, but that level of innovation and growth isn't easy to sustain. This is more of an issue with how the stock market operates than it is w
40 cmf : It is more revenue. We have no idea if it is more or less profit. But in my experience I expect there to be more profit in one $600 computer than 2 x
41 Klaus : That is utter nonsense. I'm not aware of a single product that actually matches your description. They design and specify their products in Cupertino
42 zippyjet : OMG! Stop the presses, suspend all flights, do not pass go till you collect 200!. The prima donnas of the business world will now cry and wine and try
43 Vinniewinnie : Durable as in long-lasting not as in sustainable I agree with you that revenue is not the best metric to assess profitability. On a per unit basis I
44 Klaus : What would be the point in that? I simply keep using my iPhone beyond the end of my contract until a new device is really attractive enough for me to
45 Post contains images Revelation : Or keep insurance on the device and in the last month of the contract drive some high voltage across the charging pins and get a fresh one! Interesti
46 Klaus : That's not the way I operate. And since my Apple devices usually are still as good as new at that point, there's little point in that anyway. That is
47 Ken777 : Some innovation is subtle - like the Fusion Drive, which you can even get on a Mac mini. Other innovation is well hidden, like the work Apple does wi
48 zippyjet : Maybe 30 years down the line if Apple goes belly up, legions of people will try to revive the name with little success and someone will even paint the
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