The 5 biggest takeaways from Apple’s biggest quarter ever


It's a veritable tornado of cash!
It's a veritable tornado of cash!
Photo: PublicDomainPictures/Pixabay

Apple reported record revenue during its earnings call Tuesday, but Tim Cook almost sounded like he was channeling Game of Thrones characters. He didn’t actually say “winter is coming,” but he might as well have.

Revenue is high for now, but iPhone sales are slowing down, the iPad continues to underperform and — most troublesome of all — the global economy will continue to play havoc with Apple’s bottom line.

Still, Cook and Co. remain optimistic about Apple’s ability to continue its world-beating performance. Here are five of the biggest takeaways we got from Apple’s Q1 2016 earnings call today with Cook and Apple CFO Luca Maestri.

‘Peak iPhone’ problem isn’t getting better soon
Nagging concerns about slowing iPhone sales aren’t getting better anytime soon. Apple barely missed Wall Street’s expectations for quarterly iPhone sales, moving 74.8 million units rather than 75.46 million, and Cook said next quarter’s not going to be mind-blowing either.

In fact, Apple expects next quarter will bring the first year-over-year decline in iPhone sales ever. That means continuing fear for Apple investors as the main engine of Cupertino’s profit-making machine comes under increasing pressure. However, the Apple CEO predicted that things will pick up later in 2016, presumably with the launch of the iPhone 7, which is rumored to bring major upgrades.

Apple TV and Apple Watch are killing it. And so is the App Store.
Cook and Maestri still refuse to give actual numbers of Apple Watch sales, but they said consumers spent “billions” on the wearable during an extremely successful holiday shopping season.

The recently revamped Apple TV is doing very well, too, and Cook pointed out that the tvOS App Store now has 36,000 apps on it (which boosts the bottom line of Apple’s growing services business). App Store revenue itself is so large that Apple has started pulling it out of its results as a separate number.

One Apple device for every 7 humans on the planet
Taking a page from McDonald’s, Apple raved about the number of consumers the company now serves. Apple’s active installed base now equals 1 billion. That’s a lot of iPhones, Macs, iPads, Apple Watches, iPod touches and Apple TVs, and those 1 billion devices drive growth in the App Store, which Cook called “one of the largest service businesses in the world.”

It’s an amazing milestone. And you’ve got a really good chance of seeing an iPhone if you travel outside of the United States. That giant number also reflects how many Apple devices remain in use after new ones are released (though I’m sure Apple would rather everyone had a shiny new one).

Apple is an increasingly global company
Two-thirds of Apple revenue comes from outside the United States. The crazy macroeconomic issues this past quarter really affected Apple’s bottom line, said Maestri. Despite the turmoil in currency markets, greater China financials remained good, with the best results ever in the region (14 percent growth). Cook assured investors that even with financial volatility in places like Russia and Brazil, “this too will pass.”

Also, Cook remains bullish on China, and he’s super-excited about India’s massive, young population and increasing LTE presence, both of which should drive increased iPhone sales.

Apple met its own expectations — but just barely
This is the dark side of making predictions. Apple wants to signal to investors that it is optimistic about the future, but also knows that its predictions can spawn negative consequences if they are so high that they become unachievable. This subtlety about “meeting expectations” will mess with Apple share prices today.

Still, Apple maintains what Cook called “the mother of all balance sheets,” with nearly $216 billion in cash on hand. “Our financial position has never been stronger,” he said, and the company will continue to invest during tough economic times.

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  • Mark Spritzler

    He said 3600 TV apps. Not 36,000.

  • UZ

    “Apple TV and Apple Watch are killing it.”

    The new Apple TV was my biggest Apple product disappointment ever. In fact, it has so many user experience issues compared to the first on all levels, at an inflated price, that it left me with a really bitter aftertaste. To the point where I’m considering moving ecosystem…

    • DrMuggg

      I think Apple TV is the best thing since the invention of sliced bread….

      I got a FlickR/Netflix/Youtube/Movie/News/Sports/Airplay-viewer for peanuts.

      • UZ

        Maybe so, but as I stated, the user experience of every part of it is terrible. You can get most of that with a Samsung Smart TV as well, FREE.

      • DrMuggg

        Sorry, that wont happen…. Go buy a new TV-set? No thanks, got a great one. ATV is amazing and I have not met a single person who is pleased with their stupid Smart-TV’s. Doesnt matter if it is Philips/LG/SONY/Samsung or whatever. After a year the services start to malfunction and … voila, Samsung is soooo known for making updates….

        I have not used the ATV4, I will buy one on my way home from work today. I have used ATV1-3 and it’s great machines. With the best user interface. I tried a bunch of competitors, because everybody said they were better, berfore the ATV3.
        Well, lousy open-source-based interfaces, clumsy and have to install “servers” and a lot of strange shit just to watch TV?
        Nowadays I got a complete Apple-environment at home with iMacs, iPhones, iPads, ATV and Airport Express. Everything works and there are no problems whatsoever. Almost boring… :-)

        And, FREE? I dont mind paying for better. FREE is often shit.

      • UZ

        I will explain (keep in mind I’m talking user experience here, not functionality):

        This point is not really about user experience, but worth a mention. Having lost the optical port I can no longer watch TV in one room and listen to music in the other off my 5.1 + 2 amplifier.

        THE REMOTE
        It’s symmetrical, which is the worst design you can have in the dark, especially with one side being a touch surface. I cannot mention how many times I’ve skipped a show forward or back by accidentally picking it up the wrong way round.

        Another issue is that, when holding the remote in your hand, the clicks are very deep. Read thumb fatigue, within a few minutes. Tapping would have worked (I tap my MacBook’s trackpad rather than click it), but that is not an option, and it performs a totally different function (jumping to the next item).

        Also, the button labels are sometimes confusing, and often buttons perform functions inconsistently. Since Apple merges the software and hardware experience, this feels like a real missed opportunity for the re-introduction of the beloved clickwheel…

        And rolling out a “Siri Remote” in a country where Siri is not yet supported and therefore disabled makes it feel like a real beta product.

        It really looks much nicer, but the user experience has gone down a few notches. The available lines of content you can see in one go makes it difficult to spot your favourites without scrolling around, in various places.

        None of these issues existed with the previous AppleTV, which cost $69 (as opposed to the $149 of the AppleTV 4). So you pay more for less. And that’s not a sustainable business.

      • Craig F

        You are nuts! I purchased a Samsung UHDTV in November and I absolutely hate the user experience! the thing is constantly locking up and isn’t the least bit intuitive. I purposely didn’t buy the new AppleTV because I thought I could consolidate everything with the Samsung TV! BIG MISTAKE! Love the Apple TV, really hoping that future updates bring more functionality to siri. i.e. reminders, messaging etc

      • UZ

        Craig, I’d never biy a Samsung (or any other) Smart TV, I was merely making the point that you can get the functionality free on a TV. Incidentally, LG’s webOS is a lot better but that’s not the point here. When you buy a standalone TV OS, it needs to perform on features AND experience (you Samsung TV at least gives you a good TV experience, I assume). The Apple TV 4 can do nothing more than be the TV interface, and they got the user experience of that so wrong, see my other post.

      • BoltmanLives

        Apple TV is $149 minimum for lousy service my Sony streamer does better for $14

      • DrMuggg

        Wow. Stick to that then.

        Could you tell me more of this fantastic device?

        Can I project my pics/vids/movies from my iphone to the TV with it?
        Can I manage PodCasts on it. Listen to internet radio stations.
        Can I run “Play”-channels, – since i live in Sweden i would prefer Swedish big channels like (SVT1, SVT2, Tv3, Channel4, 5 etc)…
        Can I use it as a Netflix-receiver?
        Is the Screensaver my own FlickR-account? Showing (in a fantastic way) MY pictures.
        Can I watch sports, news etc?
        Do I have a online movie store?

        can I double my i-products screen onto my 50″ TV for showing something?

        Tell me, what can your SONY-thingy do?

      • BoltmanLives

        No silly its a Sony not I thing
        No and why?
        Don’t need sweden stuff
        Netflix receiver um yea wwhatever
        FlickR no who uses that?
        Again who cares about blowing up an ipod or iphone?

        But for $14 I can stream from anywhere and its cool.

      • DrMuggg

        Everything I need or want is “Uh huh don’t care”.
        So, Clearly that 14USD piece of shit is nothing for me.

        So, It does not work with with FlickR, No national PLAY-services, Netflx?, Does not work with iProducts.

        Did u use the excess money to buy weed or what?

      • BoltmanLives

        No I used it to buy groceries or get some gas for may care with some going to retirement. I don’t need that “appl fluff” crap in my life. I have OneDrive and can streak photos/music, I have Miracast and can stream movies. I don’t need any pathetic walled garden crap with an Appl logo.

        See Appl users have veen snowed into overpaying for less, does your iPhone have NFC pairing? No but it supports failed ApplPay…weird huh Appl is abusing you and overcharging at every turn…learn that they are and you will be happier.

        My Phone was $29, my streamer(s) $14 my Mira-cast dongle was $29 for back of any TV.

        Your Appl Tv crap was $149

      • DrMuggg

        Looked it up on Amazon, happy you’re pleased since so many people gave a max of one star there. I got the money and like to pay for good stuff that work. Instead of acting cheap.
        Fantastic view on life that everything that is cheaper is always better….

      • BoltmanLives

        You will learn paying for expensive tech is a no win situation. Appl stinks even from just a software and service angle yet you paid a pretty penny because you thought it would make you feel better. Now you question that purchase and can’t wait for something new to replace the old defective thing in your mind. Its a never ending cycle carefully perpetrated on your weak mind. YOU truly believe wrongly that spending a ton on expensive electronics equal wrong you are.

      • DrMuggg

        Wonderful when a cheap moron tries to give me tech advice….

        Take it? no….

        Seems like “cheap” is something that’s defining your life.

        Hyundai? Sorry, but those CHEAP Korean cars is not worth much in my country… we got moose.

        And I tried those CHEAP lumias,,,, utter shit, with no or at best second hand apps…everything is years behind iOS/Android.

        Youre just another cheap i*iot.

      • BoltmanLives

        And you are an overspending fool on disappointing are chasing a dream that you will never succeed in reaching. Getting enamored with tech is a sure way to end up i a miserable situation.

        I bet you ran out to buy the RING doorbell…did I call that?
        I bet if Apple makes a are FIRST in line.

        LOL I can read people like you a mile away.

        BTW my perfectly driving Hyundai at 76000 miles had a check engine light come on… took it in . It was a transmission light…end result a newly reconditioned transmission free. At 76,000 miles.

        Now who is smarter doc?

      • DrMuggg


      • DrMuggg

        So your “smarter” than me, because you live a cheaper life? really…

        Go on, live your cheap life. Bet u got plastic over the sofa as well in your trailerhome (parked so you can see the ocean).

        Hope u hit a mosse in that korean shitcar of yours.

      • DrMuggg

        Checked u up a bit; you are a classic internet troll. Probably a middleages man with beer-belly, bad hygiene and a man no woman would even consider , ever…
        Just a lot of hate in your comments, stabbing everywhere. Besserwissing and “I know it all”-attitude. You clearly hate Apple as well.

        Clean up, get in shape, get laid and realize that life is more than hating.


      • BoltmanLives

        Yea in common sense I am MUCH smarter than you and likey in tech too since you own Appl crap

      • DrMuggg

        I will hereafter treat you like a true complete idiot.

      • BoltmanLives


      • Hateful Barbie

        OMG!! Dead! Not only Boltman got burned so bad, he got roasted along with the jews and last year Christmas’s leftover cookies. Scoot to the back of the stove Boltman. I hope its comfy there.

      • DrMuggg

  • BoltmanLives

    Iphone was $199 now $649-949 not a bargain for a flagship in fact many the iphone they have will be their last.Peace out.

    • Greg Woods

      that was madly uninformed. Subsidized iPhone was $199. A lot of carriers have moved away from subsidy model. Peace out.

      • BoltmanLives

        All perceptions and that IS WHAT COUNTS

  • bIg hIlL

    Brazil’s financial volatility will be rectified when the Olympic games are over. For now, the Brazilian Real is as cheap as water for American tourism, of which they hope to see much of for the games.