Apple revises guidance for its fiscal 2019 Q1 downwards due to weakness in some markets, particularly China
and today. But look how many tech people think PCs are essential and interesting. Steven Sinofsky / @stevesi : 5/ There are many examples of mature product lines with significant growth selling into a market where the only customers left are upgrades. Some of these are dull or make little money, some don't. Most don't have the moat Apple does. @cnnbusiness : Kevin Hassett, chairman of the White House's Council of Economic Advisers, says “a heck of a lot” of US companies with sales in China will follow Apple's footsteps by downgrading their outlooks. http://www.cnn.com/... http://twitter.com/... Steven Sinofsky / @stevesi : 16/ This is not a “keep calm and carry on” or “this is fine”. There's tons of work to do at Apple. But massive opportunity. Some thoughts. Steven Sinofsky / @stevesi : 23/ This is a story unfolding. it is not the end of anything. Out of this some changes will emerge in how Apple operates. I'm confident. Data point: When Windows 7 shipped forecasts for PC sales were to break 400M units in 2yrs. Today PCs sell just over 200M units/year. // END @bopinion : Tim Cook's letter was too little too late. Doing more at Apple stores to help people pay for their phones won't change buying trends. http://www.bloomberg.com/... http://twitter.com/... Kara Swisher / @karaswisher : Btw, my narrative for 2018 (since 2016 really) was tech responsibility and its dark side. Will keep at that, but my big theme for 2019 is what the next innovations are and where they come from. Here is the first: Is This the End of the Age of Apple? http://www.nytimes.com/... Steven Sinofsky / @stevesi : 4/ But this was going to happen—with certainty. Perhaps apparent suddenness to some is a shocking thing, but honestly tech should be least surprised by the suddenness. If you can look around and say no one is upgrading then you can also look around and say “everyone has one” Steven Sinofsky / @stevesi : 9/ Most every Windows and Office release was focused on “upgrade” because the number of people with a PC was much larger than the run rate of new PCs. The more time passed the more this was the reality. (Bonus, upgrading PC software is super annoying). Steven Sinofsky / @stevesi : 2/ Smartphones are the first product that penetrated nearly the entire world from essentially two vendors ("google" and Apple). That itself is shocking. It means dynamics at play are new to everyone. Predictions about future are tricky when one runs out of untapped customers. Tom Warren / @tomwarren : I think Apple is hitting a difficult iPhone period. People are upgrading less, carrier subsidies aren't enough, and $1,000 phones are making consumers pause and consider. Mix that in with fears of a recession, and 2019 could be challenging for Apple and many others Vikram Chandra / @vikramchandra : Actually, one of the biggest concerns for Apple should be its India strategy. It's still a marginal player in what will be one of the most important mobile markets in the world. http://twitter.com/... Shira Ovide / @shiraovide : Cook a year ago said the rate of iPhone upgrades wasn't “something that we overly fixate on.” It's the most important determinant of new iPhone growth. If Apple doesn't fixate on the upgrade rate, uhhhh. Shira Ovide / @shiraovide : Also, yes it mattered when Apple said it would stop disclosing iPhone unit sales in November. This is exactly the moment when it would help investors to know iPhone sales. Alex Stamos / @alexstamos : Tech journalists talk a big game about how the public tech giants should be willing to forgo money to “do the right thing”, but whenever one misses a quarter they write it up as a scandalous failure.Maybe it's ok for Apple to just make good products and a ton of money? http://twitter.com/... Shira Ovide / @shiraovide : Apple's letter shows management failure: *China's economic slowdown/trade tensions were evident for months. Apple gave no warning that it was hurting business. *Changes to smartphone buyer behavior are YEARS in the making. Apple never talked about it. http://www.bloomberg.com/... Tim O'Brien / @timobrien : “The optimistic narrative about Apple Inc.'s iPhone business is falling apart in front of our eyes.” - @ShiraOvide http://www.bloomberg.com/... Lisa Abramowicz / @lisaabramowicz1 : “Apple failed in the No. 1 mission of being a public company: Being honest with investors about its business. The company simply denied the reality that was staring it in the face, until denial was no longer an option:” @ShiraOvide http://www.bloomberg.com/... Seth Weintraub / @llsethj : GOOG now $50B more valuable than AAPL http://twitter.com/... Nilay Patel / @reckless : This is the harshest truth. Apple's services narrative rests upon iPhone lock-in. None save iMessage are better than competitors, and iMessage is locked to the iPhone https://twitter.com/... @saschasegan : Apple sacrificed actual sales on the altar of raising ASP. They have successfully found out how high ASP can go. Mark Gurman / @markgurman : iPhone bendgate wasn't meaningless, Apple's own SVP of hardware emailed customers that Apple would make a statement (never happened) on the iPad, and the AirPower (a product that was marketed to work with last year's devices!) delay is unprecedented. https://twitter.com/... Casey Newton / @caseynewton : This was the first year in five that I didn't upgrade my iPhone. Two reasons:- iPhone X was really, really good, and battery life is still great- The 2018 models were functionally identical to the iPhone XSo: not just China http://www.apple.com/... Mark Gurman / @markgurman : Two letters missing from Cook's letter today: XR. Mark W. Yusko / @markyusko : This is #ColdWarTwo propaganda BS... $AAPL isn't even in top 10 in smart phones in #China... problem is they priced themselves out of middle market globally and top 1% all have phones that are “good enough”... Not about Trade War, about Chinese Brands http://www.whatsonweibo.com/ ... http://twitter.com/... Ashley Carman / @ashleyrcarman : i planned to upgrade my 6S this year, but after getting a screen, battery, AND home button replacement, i figured i could keep holding out. plus, i have a headphone jack and imessage and the same iOS as everyone else. not worth the $800 to me! http://twitter.com/... Jason Snell / @jsnell : Yikes! Back in November Apple felt that the holiday season would be its best quarter ever. In the cold light of 2019, it turns out that it's going to be down $4B year over year, and most of the reason is iPhone sales.http://sixcolors.com/... Josh Wolfe / @wolfejosh : 1/ One word Apple CEO Tim Cook does not mention: Huawei... http://twitter.com/... M.G. Siegler / @mgsiegler : Apple wants you to have two takeaways from this letter: 1) China2) iPhone (particularly in China)But there's a bunch of other things buried in there... http://www.apple.com/... Christina Warren / @film_girl : It feels safe to say, without breakout sales data (RIP), that the XR hasn't met expectations. I can't speak specifically for China, but in the US this indicates a larger issue I've been commenting on for two years: the growing price to be in the Apple ecosystem. Christina Warren / @film_girl : Tim Cook citing the impact on battery programs is notable, not just b/c it implies Apple's old policies incentivized upgrades, but b/c, I think, the knowledge of those programs helped customers know those low cost options were available. Christina Warren / @film_girl : The problem with the XR is it is seen as less than. And to get the highest end phone that used to cost $650, now costs $1000. Or $1100 if you want the big screen. $1100 for a phone is a lot of money, even if phones are the new laptop. Christina Warren / @film_girl : But the bottom line is that for phone sales to take off again, prices either need to be lower or we need killer apps/experiences that force an upgrade. Many have bet on VR/AR for that. But that needs a killer app. And this plateau impacts all hardware makers, not just Apple. /Fin Ben Thompson / @benthompson : (This article predicted the problem would manifest itself with the next non-original design, i.e. the XS) Kif / @kifleswing : This was the most surprising part of today's news to me — Apple is partially blaming weak iPhone sales on customers taking advantage of the $30 battery replacement offer https://www.businessinsider.com/ ... Connie Guglielmo / @techledes : Tim Cook says “it's disappointing to revise our guidance” after weak holiday iPhone sales in China. It's also pretty rare for $AAPL to lower its forecast. They said last time it happened was in the early 2000s - over 15 yrs ago. @RogerWCheng on what's what https://cnet.co/2R6WAiu Ben Bajarin / @benbajarin : Tim Cook's tone on CNBC and in his letter to shareholders highlights the most interesting things happening for Apple are many things not named iPhone. Matthew Panzarino / @panzer : it should be mentioned that 38% margins in consumer tech is hilariously, stratospherically high. Ken Yeung / @thekenyeung : Damn, CNBC just had an analyst on air now with incendiary comments calling for Tim Cook to resign and says that Apple is lying about its guidance. Joe Weisenthal / @thestalwart : All those tech companies blocked from doing business in China feeling pretty smug right now. Paul Thurrott / @thurrott : “Categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow almost 19 percent year-over-year. ” Too bad those categories add up to less than 1/2 of the iPhone in revenues. :) Lucky Lindzon / @howardlindzon : If $aapl is warning...imagine the emergency board calls going on now in Fortune 1000 companies Janko Roettgers / @jank0 : Did Cook just admit the company was selling fewer iPhones because people opted for battery replacements, as opposed to buy new phones, after the whole slwodowngate? “... some customers taking advantage of significantly reduced pricing for iPhone battery replacements.” Paul Thurrott / @thurrott : Also from the “not just China” files... “In some developed markets, iPhone upgrades also were not as strong as we thought they would be.” I wonder if the US is one of those markets. Alexei Oreskovic / @lexnfx : Shares of $AMZN $NFLX $MSFT all down in after hours trading, following Apple news. Islam Fakhr / @i__fakhr : “Wearables grew by almost 50 percent year-over-year, as Apple Watch and AirPods were wildly popular among holiday shoppers;” Very interesting line from the Cook letter. Jay Yarow / @jyarow : Revenue from search ads in the App Store hit a new record, says Tim Cook. Ben Bajarin / @benbajarin : Apple not giving out iPhone unit sales any more, but the downward revision would suggest lower than 70m which hasn't happened since 2013. No matter what, low 70m is a given. Ben Bajarin / @benbajarin : I'm probably not the only one, but years ago I said Apple building such good silicon performance (and software) would lead to the device feeling snappy for longer periods of time. In our research the feeling of the device being “old and slow” is the leading cause to upgrade. Seth Weintraub / @llsethj : Lot to unpack here:$AAPL down almost entirely because of lagging iPhone sales in China - largely due to trade war. Other interesting bits:Carrier subsidy removal exposes higher priced iPhonesCheap battery upgrades hurt? Still $84B in revs with 38% margins not too shabby http://twitter.com/... @saschasegan : Apple has been trying to push ASP up super-aggressively for a few years now, seeing slower replacement cycles coming. They pushed a little too hard. But they also didn't count on Chinese competitors actually achieving cultural brand strength. M.G. Siegler / @mgsiegler : Second, again they try to chalk it all up to China, but it's clear (albeit buried) that they're having larger iPhone growth issues all over. This is the law of large numbers at work and was always inevitable. And it's a big problem (relatively) going forward. M.G. Siegler / @mgsiegler : Fourth, did you catch the bit about trying to get more customers paying for and upgrading iPhones on a regular basis? This is “Apple Prime”. And it is coming. And given the above, I'd bet on sooner rather than later. https://500ish.com/... M.G. Siegler / @mgsiegler : First, when is the last time Apple had to revise estimates? I can't recall. After years of sandbagging, they've gotten more realistic in recent years. But they keep saying in the letter that they knew it would be a challenging quarter, but still missed badly. Not good.