Apple reveals its Q3 2017 earnings [Live blog]

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Apple is unimaginably profitable.
Photo: Ste Smith/Cult of Mac

Apple CEO Tim Cook and CFO Luca Maestri are set to reveal all the details of Apple’s latest earnings in a call with investors today could have a huge impact on the company’s stock price.

The Q3 2017 earnings report isn’t expected to be a record-breaker, but Wall Street analysts will be hanging on to every word that comes out of Cook’s mouth as the next iPhone launch approaches. Most experts agree Apple will meet earnings expectations of $43.5 billion in revenue — the only question is by how much.

Cult of Mac will be right here live-blogging the entire call once it starts at 2 p.m. Pacific. Come join the fun.

August 1, 2017 3:18 pm PDT Lewis Wallace

That’s all, folks. Thanks for joining us (and sorry about the problems with the live blog). We’ll hammer out a post on the key takeaways soon.

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August 1, 2017 2:55 pm PDT Lewis Wallace

People aren’t just downloading apps. More and more often, they are paying for apps, says Luca. Apple is making that easier for everyone, by bringing more and more forms of payment around the world (Alipay in China, for instance).

The spending profile is very similar across generations of customers, he says. “People tend to spend more over time” — a general trend across the board that means nothing but good things for Apple.

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August 1, 2017 2:52 pm PDT Buster Hein

Regarding Apple’s huge AR platform, Tim Cook says that he could not be more excited about ARKit.

“Just take a look at what’s already on the web in terms of what people are doing and it’s all over the place. From entertainment to gaming, I think AR is big and profound and this is one of those huge things that we’ll look back and marvel on the start of it,” gushed Tim.

Enterprise may take a little longer to get going but Tim says there’s already some exciting applications there.

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August 1, 2017 2:50 pm PDT Buster Hein

When it comes to Apple’s research into autonomous vehicles, Tim Cook just rehashed his phrase that it’s the mother of all AI problems. He wouldn’t go any further into the question to no one’s surprise.

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August 1, 2017 2:50 pm PDT Buster Hein

“We have done some original content focused on Apple Music. Currently we have some more launching in a week or so,” said Tim Cook. “The objective is for our own learning. And to give the Apple Music subscribers some exclusive content and hopefully grow our subscriber base.

Apple has hired two new people two help them create top-notch content. It’s still an area of great interest to Apple.

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August 1, 2017 2:47 pm PDT Buster Hein

“We do not guide on channel inventory,” said Luca Maestri when asked from an investor on more info on whether Apple will ramp up inventory later in the quarter (which would mean new iPhones coming).

No matter which way investors try to phrase their “when’s the new iPhone coming?” questions, Apple won’t budge.

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August 1, 2017 2:47 pm PDT Lewis Wallace

Apple’s massive “install base” seems to be replacing the magic pipeline as Tim’s favorite weapon. He keeps using it to bludgeon any doubts about the company’s continuing dominance.

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August 1, 2017 2:42 pm PDT Lewis Wallace

Tim says encouraging young people to get into app development is Apple’s key focus when it comes to investing in America’s future. He’s talking up things like Swift Playgrounds and other curriculum for future coders, whether they are in grade school or community or junior colleges.

These efforts could increase the diversity and quantity of the developer community, he says, and that’s “the largest contribution that Apple can make, because this is the fastest-growing job segment in the country” and will be for some time.

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August 1, 2017 2:40 pm PDT Buster Hein

Asked to comment on Trumps claim that Apple is building three big beautiful plants, Cook skirted the question by talking about how Apple creates jobs through app development, sourcing materials from the U.S. and investing in U.S. manufacturing.

“We’ve created 2 million jobs in the U.S. and we’re incredibly proud of that,” Tim said. “Three quarters of the two million are app developers. We have purchased 50 billions worth of goods and services from U.S. based suppliers. Some significant portion of those are manufacturing related. At the beginning of April we announced an advanced manufacturing fund that we’re initially deploying 1 billion in.”

Basically, Tim isn’t going anywhere near Trump’s comments.

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August 1, 2017 2:36 pm PDT Lewis Wallace

Rumors about upcoming products like iPhone 8 continue to cause “some pause in our current numbers,” Tim says. Short-term that might be a bit of a nightmare, tamping down sales. But long-term it “probably bodes well,” he says.

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August 1, 2017 2:34 pm PDT Lewis Wallace

This is typically where things get interesting. No more canned remarks. Unfortunately, today, it’s also when our live-blogging tool craps out. We’re working on it!!!

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August 1, 2017 2:34 pm PDT Buster Hein

Asked what problems Apple is facing in China, Tim Cook said that he is very encouraged by the results this quarter.

“We improved from the previous quarters a little more than I thought we would,” said Tim. “iPad grew dramatically more than the market. The Mac grew more than the market. iPhone was relatively flat, year-on-year. And so we see all of those as very encouraging signs.”

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August 1, 2017 2:27 pm PDT Buster Hein

The call is finally being opened to questions. Morgan Stanley is up first…

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August 1, 2017 2:27 pm PDT Lewis Wallace

Cash dividend of 63 cents per share of common stock.

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August 1, 2017 2:25 pm PDT Lewis Wallace

More than 300 million visitors to Apple retail and online stores last quarter. Yowza. And 87,000 special sessions at Apple stores designed to showcase the usefulness of the company’s products in creative and business pursuits.

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August 1, 2017 2:23 pm PDT Lewis Wallace

Yeah, big surprise on no Apple Music numbers, Buster. Tim and Luca are keeping it positive!

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August 1, 2017 2:21 pm PDT Lewis Wallace

Apple sold 11.4 million iPads, up 15 percent over last year. Strong double-digit increases in key markets like U.S., Japan and greater China. iPad hit 55 percent market share in June (in U.S.?), including eight of the 10 best-selling tablets.

“Purchase intent” topped 70 percent. Basically, if you’re planning on buying a tablet, it’s probably an iPad.

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August 1, 2017 2:21 pm PDT Buster Hein

Spotify just revealed that it has 60 million paid subscribers. Surprised Apple didn’t say it has half that number. This last spring it said subscribers were at 27 million.

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August 1, 2017 2:19 pm PDT Lewis Wallace

More than 185 million paid subscribers to Apple services, up 20 million from three months ago, according to Luca. Apple Music and iCloud storage continue to grow, but he isn’t coughing up any specific numbers on those services.

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August 1, 2017 2:15 pm PDT Buster Hein

Almost all of Apple’s product categories experienced growth in almost every market the company operates in. Pretty impressive considering iPhone sales have been on ‘pause’ while people wait for the new models to be announced.

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August 1, 2017 2:14 pm PDT Buster Hein

Now Tim is turning the mic over to Luca to bore us with some numbers and stuff. Don’t fall asleep just yet.

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August 1, 2017 2:14 pm PDT Lewis Wallace

This is a total WWDC 2017 recap — only a month or so late. I guess if you didn’t watch, you can’t complain to Tim about WWDC spoilers. Still, all the excitement is very exciting.

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August 1, 2017 2:12 pm PDT Buster Hein

“We’re very excited to deliver even more innovation in the months to come.” — Tim Cook

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August 1, 2017 2:09 pm PDT Lewis Wallace

AirPods are a hit, with 98 percent customer satisfaction according to one survey. And Apple can’t make enough of them. Tim says Apple increased production capacity but still can’t match strong consumer demand.

(AirPods are available at certain retailers. Hunt down a pair — you won’t be disappointed.)

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August 1, 2017 2:09 pm PDT Buster Hein

“We have a very exciting fall ahead!”

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August 1, 2017 2:08 pm PDT Buster Hein

Apple Watch sales were up 50%. No specific numbers though, other than saying it’s the most popular smartwatch in the world…

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August 1, 2017 2:07 pm PDT Lewis Wallace

The high/low strategy – slashing the price on the entry-level iPad while charging a premium for the high-end 10.5-inch iPad Pro – seems to be working out well for Apple. The tablet is up in every way: units sold, revenue and market share.

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August 1, 2017 2:05 pm PDT Buster Hein

Services have reached the Fortune 100 milestone even faster than Apple expected. Revenue from services was up 10% year-over-year.

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August 1, 2017 2:04 pm PDT Buster Hein

Apple has now passed 1.2 billion cumulative iPhones sold since the device was introduced in 2007.

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August 1, 2017 2:04 pm PDT Buster Hein

Revenue was up 7% over last year. Gross margin was at the high end of guidance too. iPhone results were “impressive.” The iPhone 7 and iPhone 7 Plus were both in high demand.

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August 1, 2017 2:03 pm PDT Buster Hein

Tim Cook is already talking, spitting out numbers and rehashing announcements that the company made at WWDC 2017.

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August 1, 2017 2:02 pm PDT Lewis Wallace

BTW, if you want to listen along, go here. Tim’s just about to get things started.

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August 1, 2017 2:02 pm PDT Buster Hein

The earnings call has begun!

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August 1, 2017 1:55 pm PDT Lewis Wallace

I’m no math whiz, but if you took that in $1 bills, the stack would be 17,747 miles high (or so).

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August 1, 2017 1:45 pm PDT Buster Hein

Apple’s massive cash pile is at a new high of $261.5 billion.

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August 1, 2017 1:44 pm PDT Buster Hein

Apple beat Wall Street expectations for Q3 2017. The company just released its earnings report showing it made $45.5 billion in revenue. iPhone and iPad sales were both up compared to the same quarter last year. And Services revenue is at an all-time high.

Its the second-best Q3 Apple has ever had. Check out all the details right here.

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August 1, 2017 1:44 pm PDT Lewis Wallace

While we wait for the call to start, here’s a preview: What to expect from Apple’s Q3 2017 earnings. Read up!

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