Yesterday, Apple released the results for its 2019 fiscal first quarter (which ran from September 30, 2018 to December 29, 2018, and did not actually include any days from calendar year 2019) and held a call with analysts to discuss the results. This is typically Apple's best quarter of the year because of holiday sales. But this fiscal first quarter was unlike any prior fiscal first quarter for two reasons. First, Apple issued a statement on January 2, 2019 warning investors that it would not meet the revenue goal it previously announced of $89 to $93 billion, which caused Apple's stock price to decrease. Second, Apple previously announced that it would stop announcing the specific number of iPhones, iPads, etc. sold every quarter, which means that I can no longer produce the product-sales-over-time graphs that I have including in these posts since 2013.
Even though Apple didn't have as good of a quarter as it had previously predicted, Apple still had a very good quarter. For example, the $84.3 billion in revenue was Apple's second best quarter ever. If you want to get all of the nitty gritty details, you can download the audio from the announcement conference call from iTunes, or you can read a rough transcript of the call prepared by Seeking Alpha. Jason Snell of Six Colors also prepared a transcript. Apple's official press release is here. Here are the items which stood out to me:
- A major reason that Apple had to revise its guidance was fewer-than-expected iPhone sales in China. On the other hand, Apple CEO Tim Cook announced that Apple's "business grew outside of China, including new records in the Americas, Western Europe, Central and Eastern Europe, and our Rest of Asia Pacific segment." Of course, saying that "business grew" doesn't indicate whether iPhone sales were up or down.
- Although Apple didn't announce the number of iPhone's sold last quarter, it did say that iPhone revenue was $52 billion. That's down from $61.6 billion one year ago and $54.4 billion two years ago.
- Apple announced that the global active installed base of iPhone is now over 900 million devices. I reported last quarter that Apple had sold 1.468 billion iPhones since they first went on sale in 2007. Add to that whatever Apple sold this past quarter, and my guess is that about 60% of all of the iPhones ever sold are still being used.
- Cook said that the most popular iPhone currently being sold by Apple is the XR, followed by the XS Max, and then the XS.
- Cook also noted that "our customers are holding on to their older iPhones a bit longer than in the past." I see that myself; I know lots of attorneys who are continuing to use an older iPhone long after I would have recommended upgrading. The truth is, for many folks, an older iPhone does more than enough. When you also remember that Apple offered cheap battery replacements in 2018, and Apple released iOS 12 last year which made older iPhones work faster, clearly there was less of a reason to upgrade to a new iPhone in 2018.
- Last year the App Store had its best year ever, with over $322 million in sales on New Year's Day alone. Gulp.
- You will soon be able to use Apple Pay at Target, Taco Bell, and Jack in the Box.
- iPad revenue was up 17%, the highest growth rate in almost six years. This means that lots of folks are buying the 2018 version of the iPad Pro, and I'm not surprised at all. The 2018 iPad Pro is not only the best iPad ever, but also a substantial improvement over prior models. It is a fantastic device.
- Everyone knows that Apple is planning to come out with its own video content service, presumably a competitor to Netflix. Cook said: "We will participate in the original content world, we have signed a multi-year partnership with Oprah. But today I’m not ready to extend that conversation beyond that point. We’ve hired some great people that I have super amount of confidence in, and they’re working really hard, and we’ll have something to say on that later."