Tim Cook and CFO Luca Maestri are getting ready to announce Apple’s biggest earnings ever to investors this afternoon, and we’ll be on hand to liveblog all the action.
The results are expected to be historic, thanks to unprecedented demand for the iPhone 6 and 6 Plus in not only the US, but also China. Wall Street expects Apple to blow past its projected revenue of $63.5 billion to $66.5 billion and hit somewhere closer to an all-time high of $68 billion.
Analysts expect iPhone 6 sales to have topped more than 66 million, but Apple expert Ben Bajarin is predicting any number lower than 70 million would be a result of supply chain limitations, not demand. Mac sales are also expected to be strong, while the iPad remains the only wild card.
The call begins at 2 p.m. Pacific, but the liveblog action starts now. Keep this tab open and come back throughout the day for coverage of Apple’s biggest quarter ever.
And the call is over!
Whew, what a quarter. It’s going to be hard to top that one.
Thanks for reading along, everyone!
Tim Cook said upgraders actually made a up a small fraction of iPhone sales in Q1 2015. “Between the switchers and people that are new to iPhone and our upgraders which make a small fraction of our install base, we feel very confident in what’s infront of us.”
Addressing any hurdles in Apple Pay’s rollout, Cook said each country has a different implementations that must be overcome.
“There’s a different set of banks in a lot of the countries. The processes with the merchants are different. It’s an area where there’s quite a bit of different heavy lifting involved to scale,” said Cook. “However, it’s not something that scares us, or prevents us from viewing it as a good opportunity.”
Apple was an efficient money making machine in Q1 2015. Luca told analysts the company’s expense-to-revenue ratio during the quarter was 7.4%, which was the lowest Apple’s had in two years, and was among the lowest in Apple’s history.
Most of Apple’s expenses go to R&D investments. Apple also expects to continue to invest in marketing and advertising, as well as retail stores.
“Over the long arc of time.”
If you wrote a song about Tim Cook’s love for the iPad, that would be the title.
The black sheep in the Apple product family is Cook’s beloved tablet, which hasn’t been selling as well as the iPhone and even Mac.
Cook is still “incredibly optimistic on iPad.” First time buyer rates are very high. 50% of people in developed markets like the US and Japan are buying iPad for the first time, while 70% are buying for the first time in China.
There’s long term growth opportunity because the market isn’t saturated yet.
The iPad’s upgrade cycle is longer than an iPhone and shorter than a PC, which makes growth difficult to try and predict. Cook even hinted at the iPad being cannibalized by the iPhone and Mac on both sides.
Cook also sees Apple’s partnership with IMB as a profound opportunity to grow in the enterprise sector.
Cook feels “very, very good” about what’s in the pipeline, which could mean that he’s become a stylus fan. We shall see.
Gene Munster is back, and of course he’s got a questions about Apple Television. Gene started off asking Tim about the future of Apple TV, but he got stonewalled, per usual.
“On Apple TV we had a solid quarter with the existing product,” said Cook. “For the sake of repeating myself, It’s something we continue to look at.”
The evolution of Apple Pay also came up with Cook revealing the company is working on a ton of new features on the product’s roadmap.
“We’re in the first inning. We haven’t even completed the first inning yet. There’s tons of countries to go to. There’s not a day that goes by that I don’t get a note from businesses and banks wanting Apple Pay,” Cook explained.
“We still have a lot of merchants left in the US. Given that we launched in October, I’m positively shocked how many merchants were able to implement Apple Pay in the heart of their shopping season… We give them a lot of credit for that, but I think this is the year of Apple Pay.”
Barclay’s analyst asked Tim Cook about his expectations for Apple Watch, to which Cook replied that his expectations are high.
“I’m using it everyday and I love it and I can’t live without it,” he said. “The number of developers writing apps for it are impressive and we’re seeing incredible innovation out there.”
He also defended the late April launch, saying it’s within the timeframe Apple told customers.
“What we were saying with early 2015, we’re thinking early is the first four months, mid is the middle four months, and late is the last four months, so it’s basically when we thought. But we’re going to start shipping it because we’ve got customers that are wanting to get one. ”
Cook also commented on local competition in China saying it’s not anything new, and that he was proud of the excitement around the iPhone 6 launch.
Where do we go from here?
That’s the immediate question when Apple reports selling 74 million iPhones in one quarter. Such numbers can’t be sustainable, right?
Tim Cook is “incredibly bullish” that the iPhone “does have legs” beyond this last blowout quarter, mainly because “only a small fraction of the install base has upgraded.”
Apple saw the highest number of customers new to iPhone over the holidays along with the highest number of customers switching from Android.
Steve Millonivich asked how well the iPhone 6 Plus did compared to the iPhone 6. Tim Cook wouldn’t report the exact mix, but he did say the iPhone 6 was the most popular iPhone last quarter.
Cook says there’s definitely a geographic preference for the iPhone 6 Plus that’s not consistent around the world. Some people just love their big screens, and the iPhone 5c is still selling well too.
Supply/Demand balance for both iPhones wasn’t reached until January.
Now for the fun part: analyst questions. Who wants to bet Gene Munster asks about Apple Television?
Apple’s cash pile is enormous now. They’ve got $178 billion in cash sitting in the bank. They’ve spent $5 billion repurchasing Apple shares.
They’ve also retired 8 million shares in connection with the share repurchase program, and $57 billion has been returned to investors.
iOS developers have earned $25 billion from the App Store since it opened in 2008.
Apple generated record revenue in online and physical stores. 10 new stores opened during the quarter, with two more opening up in China this month.
Luca Maestri is going over the specifics of growth for the iPad and Mac. Apple saw more growth in Mac sales, with year-over-year sales up for both Macs and MacBooks.
There’s even more in the magic Apple pipeline! Things have been great recently, but Apple still has a “robust product and services pipeline,” according to Tim Cook, who promised to shed more light on that later in 2015.
Apple Pay has been huge. Whole Foods says they’ve seen Apple Pay increase their contactless payments 400% thanks to the new mobile wallet. (We’re still trying to assess how much of that Whole Foods boost is directly related to Leander using Apple Pay there.)
Among Visa, Mastercard, and American Express, Apple Pay now accounts for two out of every three dollars spent on contactless payment terminals.
Tim Cook just revealed that the Apple Watch is set to ship in April! That’s the first date confirmation we’ve gotten!
Get ready for a March media event.
“Interests in Apple products is at an all time high.”
I can only imagine that Tim Cook isn’t giddy with excitement right now because he hasn’t processed the monstrosity of a quarter Apple just experienced.
In his typically refined speech, Apple’s CEO kicked off today’s call by saying that the iPhone 6 and 6 Plus had the “fastest and most successful iPhone rollout ever.”
Cook described the reaction to new iPhones as “shattering out high expectations” and “hard to understand.” Apple sold 34,000 iPhones per hour the entire quarter.
Mac sales were up while rest of the PC industry is on the decline.
App Store revenues were up 41%.
There are one billion iOS devices in the wild.
Apple is doing better than ever.
Here we go. Nancy Paxton is on the call ready to dish Apple’s opening statements. We’ll hear from Tim first and then Luca’s got some things to say after that.
The call is about to start, but just to put those iPhone sales into perspective, Apple sold 568 iPhones every minute during the quarter that just ended.
I know Tim Cook’s a One Republic fan, but before every earnings call I imagine him and Luca in their office blasting Ace Hood’s “Cashflow” and tossing round hundreds like making $74.6 billion in three months is just too easy.
Apple just made more money than any company has earned in a single quarter, ever $2,314.81 per second.
The iPhone alone brought in $51.2 billion in revenue, which is more than Google made in the entirety of 2014.
Oh, and Apple’s cash pile is up 15% at nearly $178 billion. Who’s the Wolf of Wall Street now, Leo?
Siri says she’s “pretty sure” the song playing while we wait is “String Quartet in A, Hiii No. 24, Op.9 No. 6-3. Adagio” by Aeolian String Quartet.
Apple shattered expectations and sold a record 74.5 million iPhones last quarter! Total revenue was at an all time high of $74.6 billion and profits hit $18 billion.
iMacs sales hit 5.5 million and iPad sales were strong at 21.5 million. Full details here.
The earnings report should be out in the next 10 minutes.
A review of options traders’ positions points to lots of volatility in Apple stock following today’s earnings call. It’s all about the “straddle,” a strategy that “involves the simultaneous buying of bullish and bearish options that expire at the end of the week,” says MarketWatch.
Apple shares fell nearly $4 (about 3.51 percent) Tuesday ahead of Cupertino’s widely anticipated earnings call. Some analysts say AAPL’s recent historic highs showed a bit too much unbridled optimism about the company’s growth prospects. Tech stocks dragged down the Dow Jones Industrial Average, which dropped 380 points in early trading before rallying. The Dow closed down 291, with all ears waiting for Apple’s earnings call.
Earnings call starts at 2PM PT. You can listen to the audio at investor.apple.com
Apple will release its Q1 2015 financial results about 30 minutes before the call.