In just two quarters, Apple reversed the decline in performance.
Editor’s note: This article is from WeChat public account “Geek Park” ( ID: geekpark), by Jesse.
Apple is coming out of the performance gloom of the past year.
In the last quarter of the 2019 fiscal year, Apple came up with a beautiful financial report. Quarterly revenue of 64 billion US dollars, compared with the same period last year, a 2% increase, completely out of the decline in revenues six months ago; iPhone business revenue fell by a year-on-year decline, from the second quarter’s decline of 17% to 9%, It has stabilized the core of the business line; service revenue has grown rapidly, achieving revenue of $12.5 billion, up 18% year-on-year, and continuing to break through record highs; the wearables business has also accelerated growth, up 54% year-on-year.
One after another, good news, spurred Apple’s stock price to hit a new high of $250, and the market value exceeded $1,100 billion.
The core of everything: iPhone
In the past 10 years, the iPhone has been Apple’s “top pillar.”
Since 2012, iPhone sales have been half of Apple’s total revenue, reaching a peak of 69% in 2015. Later, with the gradual development of other businesses, the proportion of iPhone sales revenue gradually declined. Until the last quarter of this year, the iPhone revenue ratio fell below 50% for the first time.
The iPhone’s performance is Apple’s lifeline. The biggest reason for the sharp decline in Apple’s stock price at the beginning of this year is that the sales of the iPhoneXS/XR series are not satisfactory. Apple spent nearly a year adjusting its strategy to try to save the iPhone’s weak performance. Reduce the channel price, provide a series of disguised concessions such as “trade-in” and “interest-free interest-free”. The newly released iPhone11 this year is also reduced by $50 compared to the XR, which was also positioned last year.
The effect is still there. In the past year, the year-on-year decline in iPhone sales has shrunk a little bit, from 15% and 17% in the first quarter of this fiscal year to 12% and 9% in the third and fourth quarters. The iPhone’s wound is gradually healing.
AirPodsPro|Apple just released
The service and wearables have one thing in common, that is, they are highly bundled with the iPhone, and they can all be said to be enhancements and extensions of the iPhone experience. Whether it is AppStore, AppleMusic or AppleNews+, their revenue is based on the huge installed capacity of the iPhone. AppleWatch and AirPods need to cooperate with the iPhone to fully realize the full advantage.
In turn, services and wearables are becoming “binders” for the iPhone business. Apple has a high market share in North America, and its performance has been growing. It is because iMessage, ApplePay, AppleMusic and other services are very popular in North America, and it is difficult for users to easily switch from iPhone to Android. In contrast, it is relatively harder to promote Apple’s services in Europe and Asia, but the popularity of AirPods and AppleWatch will also stabilize Apple’s large number of iPhone users.
Next Quarterly Forecast: The Strongest Q1
in History
For the next quarter of the 2020 fiscal year, Apple gave a revenue forecast range of $85-895 billion. If the situation is optimistic, Apple’s performance in the next quarter is likely to exceed the 88.3 billion in the first quarter of 2018, bringing the strongest Q1 earnings report in history, completely out of the previous haze.
Reviewing Apple’s fiscal year 2019, one of the best analogies is actually 2016. In 2016, Apple’s main iPhone6s, the appearance and function have not changed greatly, coupled with the iPhone6’s excellent sales results, the user’s willingness to change the machine is sluggish, resulting in Apple’s entire fiscal year 2016 performance is sluggish, compared to 2015 decline across the board.
In 2019, Apple faced similar situations. The iPhoneXS lacked improvements compared to the iPhoneX, and the XR was also priced higher. But this time, Apple’s response speed is much faster, immediately adjust the iPhone’s sales, pricing strategy, drastically trimmed, tidy up the Mac and iPad product lines, launch a richer content service, only two quarters, Apple reversed the performance The downturn.
The iPhone11 sales report, the good reputation of AirPodsPro after the release of the day, AppleArcade and TV+ ready to go, and Apple’s next wave of explosions.
Before this, the capital market asked AppleThe question is, “What if you only sell high-end mobile phones and users grow to the end?” The answer given by Apple is that “the existing 700 million iPhone users have huge potential to tap.”