AAPL: Apple Revenue Meets Forecast at $81.8bn, Stock Falls 2% on Weaker iPhone Sales. Again.Apple’s revenue is down for the third straight quarter. Is the iPhone maker out of innovative ideas?
- Apple stock (ticker: AAPL) tumbled over 2% after the closing bell on Thursday on a not-that-great earnings report. The tech giant posted a 1% decline in sales from a year ago, landing at $81.8bn, down 14% from the previous quarter. It was the third straight quarterly slump in revenue and about in line with Wall Street estimates of $81.9bn.
- The kicker: Apple’s most profitable unit – iPhone – came in with a 2.4% drop in revenue year-over-year. Sales of the iPhone arrived at $39.7bn, or about half of total revenue. Slowing growth in Apple is causing some investors to wonder can the bellwether of the Big Tech pack keep churning out market-leading innovation, especially in the smartphone space?
- Net profits for the latest quarter rose 2.3% to $19.9bn, eclipsing estimates of a 3.6% decline to $18.7bn. Earnings per share jumped to $1.26 against expectations of $1.19. Despite Apple shares’ after-hours decline, the Cupertino company has added more than 50% to its valuation this year, crossing the $3tn market cap threshold.
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AAPL: Apple Stock Tops $3 Trillion, But Q2 iPhone Sales May Shake Up ValuationApple shares are up more than 50% to start the year, adding more than $1tn to the company’s market cap.
- Apple stock (ticker: AAPL) closed above $3tn in market cap, regaining its highly coveted crown as the world’s first corporation to hit that high-water mark. Shares in the company closed Friday at $193.97 after a 2.3% daily gain to finish off a stellar first half of 2023.
- The iPhone maker’s valuation has been on a tear this year. Its stock is up more than 50%, adding a solid $1tn to eclipse France’s gross domestic product of just under $3tn. Still, the company that launched from a garage and turned into a tech kingpin, may be facing some headwinds pretty soon.
- With the second quarter having wrapped up, Apple’s earnings report is about a month away. iPhone sales, which account for about half of Apple’s revenue, slid 2% in May to a sell-through figure of 14.5mn units. For the June quarter, Wall Street is eyeing 46mn iPhone sales.
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AAPL: Apple Stock Soars at Record High. Why Isn’t the Company Worth $3 Trillion as Before?The iPhone maker closed at a new all-time high this week, but still hasn’t topped $3 trillion it hit in early 2022. Here’s why.
- Apple stock (ticker: AAPL) notched a new all-time closing high of $183.79 a share. The figure was about a dollar more than the stock’s previous record of $182.86 a share back in January 2022. That’s when Apple became the first company to be worth $3tn. Today, it’s a few billion shy at $2.9bn. Why is that?
- Every year, Apple does something called share buyback. In fact, the iPhone maker has spent more than any other company on share buybacks – over $600bn. Last year alone, Apple repurchased about $90bn of its own stock. When that happens, the shares are taken out of circulation, thus reducing the overall market cap.
- What can Apple do with those repurchased shares? It can store them in the treasury and reissue them at a later time, adding to the company’s value. It can distribute the shares across employees or outright cancel and retire them, deeming them worthless. Back to today, Apple stock must rise to $190.73 a share to regain a $3tn valuation.
Illustration by TradingView
AAPL: Apple Stock Hits Record High at $185 Before Debut of Pricey Vision Pro HeadsetThe long-awaited mixed reality headset cooled investor enthusiasm, leading Apple’s stock to close lower.
- Apple shares notched an all-time intraday record as the company’s developers conference was in full swing yesterday. The catalyst was the highly-anticipated unveiling of Apple’s mixed reality headset. And there we have it – a $3,499 Vision Pro device that you can strap on your head and work or play in a virtual environment.
- Apple stock (ticker: AAPL) erased its daily gains shortly after the release of Tim Cook’s biggest gamble which will be selling for 12 times the price of Meta’s Quest 2 (and that’s not selling very well.) Shares of Apple have gained more than 40% year-to-date.
- The iPhone maker, towering over the Big Tech universe, expects to entice users with the goggle’s ability to “seamlessly blend the real world with the digital world.” However, the price of the Vision Pro, available early next year, will most likely limit its use at least in the near-term.
AAPL: Apple Announces Multi-Billion Dollar Deal With Broadcom to Provide 5G Components
- Apple has announced a multibillion deal with Broadcom to produce 5G components.
- The deal comes after Broadcom agreed to supply Apple with $15bn worth of wireless components in 2020.
- It’s part of Apple’s increasing efforts to diversify its supply chain, and reduce its dependency on China.
Apple has just announced that it will turn to US semiconductor manufacturer Broadcom to purchase billions of dollars worth of 5G components for its iPhones. The value of the deal has not yet been disclosed, but the tech giant said that this deal was another component of its 2021 commitment to invest $430bn into the US economy.
Broadcom already made a deal with Apple to provide $15bn worth of wireless components to the tech giant in 2020. Biden’s curbs on US companies using Chinese-made silicon might be another factor behind the deal. As it stands, Apple is already responsible for supporting over 1,000 jobs at Broadcom facilities – with the new deal poised to potentially add to this figure.
Recently, Apple has been making strides in diversifying its supply chain – from reducing its dependence on Chinese-made chips, to increasing its manufacturing in other regions such as India. Shares in Apple logged a modest drop of 1.52% on the news yesterday.
Apple is a multinational technology company that designs and develops consumer electronics, computer software, and online services. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple is best known for its iconic products such as the iPhone, iPad, Mac, and Apple Watch, as well as software like iOS, macOS, and iTunes. The company is headquartered in Cupertino, California and is known for its innovative designs. Today, the tech giant has a staggeringly large market cap.
AAPL: iPhone Sales Top Estimates with $51.3bn Revenue, Apple Stock Jumps 2%Apple’s first-quarter revenue came in above estimates but lagged behind the year-ago quarter.
- Apple reported better-than-expected earnings figures on Thursday, after the closing bell. Sales of iPhone devices blew past expectations of $48.9bn with $51.3bn picked up. The company’s total revenue arrived at $94.8bn, down 2.5% from the $97.3bn in the same quarter a year ago.
- Shares of Apple (ticker: AAPL) edged higher by 2.5% in after-hours trading in New York. The tech juggernaut has been defying the gloomy market sentiment this year as its stock is up more than 30% year-to-date. But its market cap is still some $400bn short of its all-time high of $3tn.
- Apple CEO Tim Cook described the previous quarter as a tough one, but said that economic and currency headwinds weren’t able to detail the supply chain or dent the company’s prospects for growth. Net profits for the March quarter were down 3.4% to $24.2bn.
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AAPL: Apple Sets its Sights on India as its Next Major Production Hub
- Apple is preparing for India to become a major iPhone production hub over the next few years.
- The company is reportedly aiming to have as much as 25% of its iPhones manufactured there.
- Apple also reportedly scrapped plans for haptic volume buttons in the upcoming iPhone 15 last week.
Apple is ramping up its efforts to make India its next major production hub, with issues relating to its Chinese production hubs still fresh in its mind. India is the second largest smartphone market in the world by sales, and last year Apple sold 6.7m iPhones which had been manufactured there.
As it stands, Apple only manufactures less than 7% of iPhones in India. However that represents a 6% increase from the 1% Apple manufactured there in 2021. Apple’s end goal, according to the Indian Government, is to eventually manufacture 25% of its iPhones there. In general, analysts are feeling much more positive about Apple in the year ahead compared to last year.
What’s prompting the move?
Apple’s transition to India is strongly related to the issues it faced with its historical over-reliance on China for production – which accounts for more than 90% of its iPhone manufacturing capacity. US-China tensions have been escalating for several years, and covid had caused supply chain disruptions and several of its manufacturing plants based in China.
Some analysts have raised concerns that China’s manufacturing infrastructure remains significantly better than that of India, which could present issues of its own.
iPhone 15 disappointment
In other Apple news, last week it was leaked that the haptic volume buttons rumored to be included in the upcoming iPhone 15 have been axed due to “technical issues”. Non-physical volume buttons were considered to be one of the most significant new features of the next iPhone, and investors were disappointed. Shares in Cirrus, the company which provides Apple with its haptic touch technology, dropped by more than 12% on the news – and its shares still show no signs of bouncing back from the loss.
Apple is a multinational technology company that designs and develops consumer electronics, computer software, and online services. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple is best known for its iconic products such as the iPhone, iPad, Mac, and Apple Watch, as well as software like iOS, macOS, and iTunes. The company is headquartered in Cupertino, California and is known for its innovative designs. Today, the tech giant has a staggeringly large market cap of more than $2.6 trillion.
Naveed Ahmed / Unsplash
AAPL: Apple Takes On Big Banks with Turbocharged 4.15% Annual Interest RateThe Big Tech firm wants to be your bank at a time when the banking sector is under great pressure.
- Apple just made its latest push into the financial services sector. The tech giant on Monday launched its Apple Card high-yield savings accounts that pay holders an annual percentage yield of 4.15%. The service comes a month after Apple unveiled its Apple Pay Later service.
- The savings accounts are now available to Apple users who own an Apple Card. The company debuted its newest feature in concert with Goldman Sachs’ lossmaking consumer banking division Marcus. Oddly, Marcus offers just 3.9% APY to its customers. America’s average APY is just 0.35%.
- The market-leading 4.15% interest rate is bound to reshuffle the hierarchy among big US financial giants. In the first quarter of 2023, US savers yanked out almost $60bn from Charles Schwab, State Street, and M&T. The hunt for higher returns amid banking pressures just got more intense.
AAPL: Mac Shipments Drop by Over 40% in Worrying Sign for Apple
- Apple’s Mac shipments has plummeted by 40.5% – a greater decline than those seen in its competitors.
- Apple was upgraded to “buy” by Goldman Sachs for the first time in 6 years only a month ago.
- Despite the worrying signal, shares in Apple have still risen by over 24% since the start of the year.
In the first quarter of this year, Apple’s MacBook shipments fell by 40.5% YoY. The decline amounts to shipment of 2.8m fewer Macs than the same quarter a year prior. Its share of the PC market also declined by 1.4% – now sitting at a market share of 8.6%. More concerningly for Apple however, was the fact that Apple’s shipments decline was the largest out of those of its competitors including Dell and HP which both also saw double digit drops in shipments.
Market analysts have said that the decline is likely due to macroeconomic factors changing consumer spending habits, as well as further pull back from the spike in computer sales caused by the now-distant pandemic.
Is Apple losing its touch?
Last month, analysts at Goldman Sachs gave Apple its first “buy” rating from the firm in almost 6 years. Their reasoning was that the tech-giant is poised to grow its services business as a result of its growing user base.
Whether Apple’s falling Mac sales will affect the potential for this to happen remains to be seen, but it’s not a great indicator for the company’s market position – especially given that Apple’s shipments fell by more than its competitors.
The big picture
Despite the negative signal of the shipment dip, Apple had predicted that this might be the case. Tim Cook, Apple’s CEO, had said 2 months ago that shipments for all of its products would likely take a hit due to macroeconomic conditions affecting the market this year.
That being said, investors seem to have maintained a pretty positive outlook for the tech giant. Since the year began, its shares are up by more than 24% – despite falling by 1.6% on the news. Shipments are also likely to begin to recover near the end of the year, which would reaffirm Apple’s thus-far positive outlook.
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AAPL: Apple Pins June Dates for Annual Dev ConferenceGeeks are in for a treat between June 5 and June 9 as Apple is expected to reveal some hot new products.
- Apple set the dates for its big annual developer conference WWDC. Between June 5 and June 9, tech lovers will get the latest news and see the latest products from the iPhone maker. Rumor has it, the company’s much-anticipated virtual reality headset will be unveiled.
- What’s the hype about? Apple holds a launch event every year where CEO Tim Cook announces new iPhones, Macs, or other gadgets. Last year, the $2.5tn tech heavyweight made known its plans for Apple Pay Later – the “buy now, pay later” service that just launched a couple of days ago.
- Shares of Apple have performed fabulously this year. The stock is up about 30% from early January and is roughly 10% off from its all-time high at $180 a pop touched in December 2021. Back then, Apple became the first company to be worth $3tn.
AAPL: Apple Prepares for Investment Into Producing its Own Movies
- Apple has announced plans to spend $1bn per year to produce theater-released movies.
- The tech-giant hopes that high-budget theater releases will lure subscribers to its Apple TV+ streaming service.
- As it stands, Apple’s streaming service is lagging behind both Netflix and Disney+ by subscribers.
After Apple earned its Goldman Sachs “buy” rating this month, investors have been feeling more positive about the market cap leader of the FAANG group of stocks. But the tech giant has been moving to diversify its revenue streams for sometime now. Perhaps more so after recent concerns about both iPhone demand, and the company’s production capacity at its manufacturing facilities. And Apple’s newest plan will see its eyes turn to the big screen.
What did Apple announce?
Apple has said that it plans to spend $1bn each year on producing movies. It’s not just for its Apple TV+ streaming service either – the Apple-produced movies will reportedly be full theater releases as part of a wider effort to establish new revenue streams in Holywood. The company has also already been approached regarding releasing movies from high-profile directors including Martin Scorsese. Although for the time being, Apple is still exploring options as to how the theater distribution of these titles could be feasible – which might prove costly.
Where does Apple stand in the streaming wars?
Apple might be pushing theater releases due to the lackluster performance of its Apple TV+ streaming service compared to competitors. As it stands, Apple’s streaming service is lagging behind those of both Netflix and Disney+. Amazon too has been throwing increased spending at its Amazon Prime streaming service, with high-budget productions such as The Rings of Power, which alone cost an eye-watering $715m to produce. If Apple’s ramped up movie efforts prove successful, it could become another facet of the tech-giant’s dominance.
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AAPL: Apple Seemingly Back on Track Despite Antitrust Hurdles
- Investors are feeling more optimistic about Apple this side of the year.
- Last week, Goldman Sachs upgraded Apple to “buy” for the first time in almost 6 years.
- The tech-giant also hit back at a UK antitrust probe into the company’s developer terms.
Investors have been keeping a close eye on Apple since the beginning of the year. The difference now however is that it’s for positive reasons. For almost a month now, the tech-giant has been outperforming its big-tech peers by quite a considerable margin. Apple is firmly in place as the largest FAANG stock by market capitalization, and doesn’t seem to be at risk of losing that title any time soon.
What’s got Apple looking positive?
Last year, Apple had to overcome concerns surrounding its iPhone production capacity, due to the protests and covid restrictions at one of its main iPhone manufacturing plants in Zhengzhou, China. And this year, concerns were raised about demand for its new iPhone 14 falling into decline. Now however, those concerns seem to be fading into the background, as Goldman Sachs has upgraded the company to “buy” for the first time in almost 6 years. The firm believes Apple’s growth is set to be fueled by its services such as Apple Music and Apple TV+ – easing concerns analysts might have for its iPhone sales.
The antitrust argument
Alongside the positive news however, Apple has had a lot to say about the UK’s probe into restrictions on its mobile browser and on App Store developers. At a tribunal last week, Apple said that the UK’s Competition and Markets Authority (CMA) had no right to launch the probe as it took too long to do so. The tech-giant’s anti-competitive terms have been coming under scrutiny from some big names over the past year – including Spotify and Elon Musk.
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Apple Shares Gain on Bullish Goldman Sachs CallInvestors didn’t hesitate to scoop up Apple stock after Goldman’s latest note.
- Apple shares closed Monday’s session higher by 1.85% as money allocators dropped some capital into the tech giant. Behind the move was a bullish projection from Goldman Sachs. The investment banking heavyweight put a buy rating on Apple and a $199 12-month price target.
- The mark was among Wall Street’s highest and a sign that there’s more room to the upside for the Tim Cook-led firm. If Apple, presently trading at $153.83 a share, closes this month higher, it will mark its first quarter in the green since the final three months of December 2021.
- Apple’s all-time high? That’d be $182.01 a pop set in January 2022. That’s when Apple became the first company to cross a $3tn market value. So far into 2023, the stock has gained 23%, outgaining even the best performers in the Dow industrials index.
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Apple suffers smartphone declineAs hard as it might be to believe, people aren’t buying smartphones like they used to.
- Shipments of smartphones are plunging globally in their steepest decline in the history of the sector. While 2022’s shipments of $1.21bn smartphones might sound like a lot, it’s the lowest number of annual shipments seen since in almost a decade. Analysts reckon that inflation and changes in consumer spending habits are what’s causing the decline.
- Apple is still the dominant force in the smartphone market, but it's far from immune to the slump. In its fourth quarter, the tech giant shipped 72.3m iPhones, marking a decline of almost 15% YoY. Competitor Samsung fared even worse, with a 15.6% decline in its shipments YoY.
- Not even its new iPhone 14 could save Apple from plunging demand, and it’s also had to deal with supply chain issues at its largest manufacturing plant in China – where worker protests impacted production. With any luck, the improvement of global economic conditions will help bolster the downtrodden smartphone industry.
Sung Jin Cho / Unsplash
Macs maketh manApple has announced new Macs with its most powerful processors yet, but it's doing so at a time of uncertainty.
- Apple’s new Macs were announced yesterday, powered by the new M2 Max chips – the most powerful processors the tech giant has produced to date. It comes almost 3 years after the company stopped releasing products using Intel chips, which Apple had relied on for more than 15 years.
- It’s a risky time to be releasing a new product, and Apple chief execs warned in October that Mac sales would see significant declines in the quarter ending December last year. Fears of recession might also cause inflation-conscious consumers to have a hard time stomaching the $2k price tag for the entry-level M2 Macbook Pro.
- Inflation might also be the reason for Apple postponing the release of its AR glasses to 2024 or 2025, although the official reason for the delay was that technical challenges were encountered. Some within the company don’t even believe that Apple will ever ship its VR/AR products. After seeing Meta lose 57% of its value over the past year – we wouldn’t blame them.
Falling far from the treeApple’s being watched closely as an indicator of how the tech industry will perform this year. So far, the signs aren’t great.
- Shares in Apple reached their lowest level since June 2021 yesterday, having fallen by 3.4% to bring its market capitalization below the $2t mark. Its share price has been falling every week for the last month and investors are starting to worry about how the tech giant will perform over the coming year.
- Pressures have been mounting on the FAANG stock’s production capacity for a while now. Production halts at a major manufacturing facility in China have caused iPhone production to slip below demand. Analysts have pointed out that it’s common for iPhone demand to exceed supply, but not to this extent.
- Apple’s just one of many in the tech industry facing sell-offs at the moment, with the Nasdaq dropping by almost 9% over the past month. Apple however, is often viewed as an indicator of what should be expected from the wider market, and if anything should be taken from its recent performance – it’s that headwinds are likely to continue for a while.
Eyeing up alternativesApple’s main manufacturer had enough with the recent unreliability of Chinese manufacturing plants and is looking to build up its alternatives.
- Foxconn, Apple’s main manufacturer, has begun restructuring its manufacturing infrastructure with India and Vietnam now emerging as assembly hubs. The company could move as much as 30% of its capacity to those nations in the coming years.
- Covid restrictions, and protests against them, have been hampering productivity at its Chinese plants for some time and moving the infrastructure might make the company’s output more stable. It’s also seeking to capitalize on some of the incentive schemes being offered in these countries.
- Apple itself is also seeking to diversify its manufacturing network, but there’s been a few hitches. Vietnam for example does not have the resources required to manufacture iPhones – only their components. But the unpredictability of Chinese factory outputs could expedite its development.
Sung Jin Cho/ Unsplash
Apple blocks Coinbase’s path to successTwo giants of industry are battling it out over gas fees and in-app purchases, though for one it's the least of their worries.
- Apple is trying to block Coinbase’s wallet release on its app store, and it's causing more drama than a Breaking Bad episode. Apple is enforcing a set of strict NFT policies laid out in October and wants to force Coinbase to disable NFT transfers on its Wallet App, and is blocking the app’s release until they do.
- Apple’s 30% commission on in-app purchases is not a new source of controversy, and apparently the tech giant has claimed the gas fees required to send NFTs should be paid through the in-app purchase system – giving Apple 30% of those gas fees. Naturally, Coinbase vehemently disagrees, and others have said Apple is actively blocking the development of crypto.
- For Apple though, there are bigger fish to fry rn. The behemoth is having to quickly find a way to diversify production out of China (a huge production hub for them) as unrest in the region continues to disrupt economic activity, telling its suppliers to actively plan to assemble products elsewhere in Asia
A clash of tech titansMusk has declared war on Apple’s developer rules and fees, with big brands rallying behind him.
- Musk has taken aim at Apple over its content moderation policies, and claims that the company has threatened to remove Twitter from the App Store without explaining why, which would be a major blow for the platform. Since taking over the social media company, Elon’s been shaking Twitter up – partly by making content moderation less strict.
- He’s also had a lot to say about Apple's 30% fee for purchases made through apps listed on their store. Elon’s grievances are being echoed by other companies such as Spotify and Epic Games who have both previously challenged the policies and are rallied behind him. The beef might be what’s caused AAPL to drop by 4.7% since the start of the week.
- This isn’t the first time Apple’s run into criticism for its rules. In 2019, Spotify filed an antitrust case against Apple for its requirements for developers. The case is still being investigated by the European Commission and if found to have breached regulations, Apple risks a fine of 10% of its global turnover – ouch.
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A faltering factory?Protests throughout China are causing all kinds of problems for the tech sector, with iPhone production now hitting a roadblock.
- AAPL dropped by 2.63% yesterday on news that unrest in China could disrupt iPhone production. Chaos at a Foxconn manufacturing plant in Zhengzhou is predicted to cause a shortfall of nearly 6 million iPhone Pros this year, with the potential for that number to increase.
- It’s a big problem for Apple, as its iPhone Pro models have been mitigating slumping demand for regular models. Earlier this month, Apple had to lower its annual production target from 90m to 87m units with recent disruptions now likely to impact production further.
- It’s not only protests causing issues – China’s covid restrictions themselves are throwing a spanner in the works. Apple already warned this month that shipments would be lower than usual due to lockdowns, and a worse case scenario could see its factories shutdown due to covid outbreaks.