Apple iPhone 6 sales disappoint, shares plummet 7%

[dawheat]

Only partially. Analysts think China is responsible for about 2 million units. However, this year for the launch weekend, Apple sold around 3 million more (total 13 million) than last year (10 million), which means probably 1 million more excluding China, or about a 10% increase excluding China.

It's always hard to get much meaning out of launch numbers for Apple b/c there's no way to know how much they were supply constrained, especially in China.

Like to like, 10% increase is on the low end IMO - I honestly was expecting closer to 20-25% y/o/y growth, normalized for additional markets. However this could just be supply.

I fully expect full on quarter growth, normalized for days, to be closer to 20%.

 

[ThisIsChrisKim]

Only partially. Analysts think China is responsible for about 2 million units. However, this year for the launch weekend, Apple sold around 3 million more (total 13 million) than last year (10 million), which means probably 1 million more excluding China, or about a 10% increase excluding China.

It's always amazing to me that Apple can increase sales year over year like this. Really truly an impressive performance. Especially in the consumer market where people are notoriously fickle. Move to non-contract options in the US also haven't hurt sales as some might have suggested, so far. People truly love these phones!

I wonder if there will be another move in the next generation to offer an even more upscale model to further bolster profit margins. A QHD or AMOLED screen? Might be interesting to see Apple's spin on one of Samsung's signature tech.

 

[Oyeve]

It's always amazing to me that Apple can increase sales year over year like this. Really truly an impressive performance. Especially in the consumer market where people are notoriously fickle.

Not really impressive as most apple consumers will buy the latest apple product whether its good or not. At this point they don't even have to have a keynote, just announce a new product and the flock will throw $$$ at it.

 

[StrangerGuy]

I wonder if there will be another move in the next generation to offer an even more upscale model to further bolster profit margins. A QHD or AMOLED screen? Might be interesting to see Apple's spin on one of Samsung's signature tech.

QHD is a no-go; Apple isn't interested in playing DPI races.

AMOLED is the only major hardware differentiation left to set itself from Apple. Doubt they will let that go to Apple, and they don't have the capacity to supply Apple either.

 

[richierich1212]

Personally, I suspect Apple is more likely to move around 85-90 million iPhones. It shipped 74.5 million in calendar Q4 (that's fiscal Q1) last year, and the iPhone 6s' launch weekend sales are 30 percent above last year's model. Even if that initial spike isn't directly proportionate to Q4 volumes, it's hard to believe that this isn't reflective of increased demand.

I've already asked several coworkers with the iPhone 6/+ if they were going to upgrade to the s models. Nobody said they would. I'm not sure if the s models will outsell last years model since most who wanted bigger screens got them last year.

I'm expecting my 6S+ to arrive today, will be back with iOS for the first time since using a 3G. I'm going to try out Tmobile as well, it was too easy not to since they have a nice guarantee.

 

[Eug]

I've already asked several coworkers with the iPhone 6/+ if they were going to upgrade to the s models. Nobody said they would. I'm not sure if the s models will outsell last years model since most who wanted bigger screens got them last year.

I'm expecting my 6S+ to arrive today, will be back with iOS for the first time since using a 3G. I'm going to try out Tmobile as well, it was too easy not to since they have a nice guarantee.

Uh, Apple already confirmed the 6s/6s+ outsold the 6/6+.

 

[richierich1212]

Uh, Apple already confirmed the 6s/6s+ outsold the 6/6+.

Already? That was quick.

 

[deathBOB]

QHD is a no-go; Apple isn't interested in playing DPI races.

AMOLED is the only major hardware differentiation left to set itself from Apple. Doubt they will let that go to Apple, and they don't have the capacity to supply Apple either.

I think they will do it eventually, but not until efficiency improves.

Where is OP btw?

 

[darkswordsman17]

QHD is a no-go; Apple isn't interested in playing DPI races.

AMOLED is the only major hardware differentiation left to set itself from Apple. Doubt they will let that go to Apple, and they don't have the capacity to supply Apple either.

Er, this is the same Apple that kicked off the DPI races with their "Retina" branding, right?

Considering Samsung (at least I assume it is them) seems to let budget Chinese companies use AMOLED panels I don't see why they'd restrict Apple from using them. Samsung also created a division just for Apple's displays (I believe specifically to find ways to win/keep contracts to supply them). In fact with the disappointing sales of their own phones, they might make more money by focusing supply to Apple.

I don't know that they don't have the capacity in display production. Don't correlate that with their inability to meet their SoC production. Plus if it was an upscale one it'd be more limited so it wouldn't need to match those numbers.

I don't see Apple making the change for a while though, they've been badmouthing OLED for years. I think Tim Cook even dissed it again in the past year or so. My guess is the displays would eat into their profit margins too much right now. But no doubt once they do they'll tout it as though they're the first company to use it.

That is the same reason they aren't keeping up in the DPI race is they want to maximize profits and they do that by locking in production like they've been doing. Then of course they get to tout it as some huge deal when they finally move up to the next step.

 

[catinthefurnace]

Er, this is the same Apple that kicked off the DPI races with their "Retina" branding, right?

They don't engage in the DPI race because it largely makes little difference to go past where they are now, and have been since the iPhone 4 (excluding the 6 Plus weirdness).

They were the first to do high DPI yes, but they didn't kick off any "race". They took their displays to the DPI that they thought was necessary, right to the point where the slope on the diminishing returns curve becomes exponential. The Android OEMs desperate to differentiate themselves started the "race".

 

[StrangerGuy]

They don't engage in the DPI race because it largely makes little difference to go past where they are now, and have been since the iPhone 4 (excluding the 6 Plus weirdness).

They were the first to do high DPI yes, but they didn't kick off any "race". They took their displays to the DPI that they thought was necessary, right to the point where the slope on the diminishing returns curve becomes exponential. The Android OEMs desperate to differentiate themselves started the "race".

It's funny some by now still don't understand the concept that raw spec increases like DPI doesn't necessarily means an equal gain in real world utility, and the latter is what ultimately drive demand not the former.

 

[Ns1]

baahahhahahahahahah

Apple Inc. reported a 30% increase in quarterly profit after posting strong sales of its iconic phone and nearly doubling revenue in China, its second-largest market.

The Cupertino, Calif., tech giant said Tuesday that it sold 48 million iPhones during its fiscal fourth quarter ending Sept. 26, up 22% from a year ago.

That spurred revenue of $51.5 billion for the world’s most profitable company, up from $42.14 billion a year earlier.

http://www.latimes.com/business/technology/la-fi-tn-apple-earnings-20151027-story.html

 

[stlc8tr]

The fiscal Q4 numbers only included a few days of 6S/6S+ sales so it's the next earnings report that will refute or confirm Achtung!'s prediction.

WSJ reports that Apple is confident enough to order 85-90M units for delivery by end of year.

http://www.wsj.com/articles/apple-preparing-record-number-of-new-iphones-1436367371

Apple Inc. is preparing for a larger initial production run of its next iPhones, betting that even modest hardware changes will entice consumers to upgrade handsets and outstrip demand for the larger-screen phones that it released last year.

Apple is asking suppliers to manufacture between 85 million and 90 million units combined of two new iPhone models with 4.7-inch and 5.5-inch displays by Dec. 31, according to people familiar with the matter. The screen sizes are the same as in the iPhone 6 and iPhone 6 Plus.

By comparison, Apple last year ordered a then-record initial production run of 70 million to 80 million for its first larger-screen iPhones.

 

[MustISO]

I called it earlier today, Apple was either going to beat expectations or not.

 

[Commodus]

Well, the results do refute the basic "Apple is dooooomed" premise -- it's a 22 percent year-over-year increase in unit sales, and you can't pin that solely on China. I do agree that calendar Q4 / fiscal Q1 is the real litmus test, though. That'll show whether or not there's sustained interest. My guess: 85 million, give or take a couple million. It'll be more popular, but "S" years don't usually get people as excited as the major redesigns.

 

[darkswordsman17]

Anyone saying Apple is doomed...well aside from the obvious one, it is someone who clearly isn't paying attention.

The real question is if they'll maintain their profit share dominance.

They don't engage in the DPI race because it largely makes little difference to go past where they are now, and have been since the iPhone 4 (excluding the 6 Plus weirdness).

They were the first to do high DPI yes, but they didn't kick off any "race". They took their displays to the DPI that they thought was necessary, right to the point where the slope on the diminishing returns curve becomes exponential. The Android OEMs desperate to differentiate themselves started the "race".

No, it is because they locked in production and aren't willing to lose margins to keep updating some components every year. Has absolutely nothing to do with it being "optimal" (or else we'd still be locked in at the 3.5 or 4 inch display sizes after all). It is the same reason they actually downsized the batteries, so they can maximize profits. So yeah it is optimal in that regard.

I really don't know how you can claim that they're not playing the DPI race considering how they've been upping DPI on their products in general (they just released a 4K 21" iMac for crying out loud, yeah, they're not playing the DPI race at all...). They were absolutely not the "first" to do high DPI either, they have however been explicitly marketing high DPI ever since though, which is why Android has been pushing it as they trump Apple's "Retina" displays in resolution.

It's funny some by now still don't understand the concept that raw spec increases like DPI doesn't necessarily means an equal gain in real world utility, and the latter is what ultimately drive demand not the former.

Funny how some people can't see what is plain. If that were truly the case we wouldn't see companies intentionally ditching utility. Even Apple themselves when they decreased the size of the battery despite battery life, especially over time being one of if not the biggest complaint about smartphones in general and the iPhone especially. There's very obvious reasons for that, and it is partly why they brought out the + and I've seen a lot of people who don't want the larger phone (tell me again how a phone with the +es bezels is somehow "real world utility"?), but they get it because of the better battery life alone. Real world utility, I guess that's why the iPhone's have quick charger too. Oh they don't? Weird, I thought real world utility drove demand. Much like how people have been saying "I don't want or need more storage, 16GB is plenty enough, especially for shooting 4K now!"

 

[StrangerGuy]

So, what's Apple's share of the phone profits now? 95%?

Which is made more hilarious that a used, out of warranty iPhone 6 non-S in Singapore still costs the same as a brand new 32GB S6. If that doesn't spell doom to high end Android I don't know what is.

 

[dawheat]

iPhone sales were definitely good y/o/y at over 20%, though including China at launch seems to be taking the wind a bit out of next quarter. Guidance seems to be flat y/o/y for iPhones sales in the holiday quarter which would be the first time in a while to have flat growth.

It's hard to find anything to criticize when you're pulling in over 11 billion in quarterly profit, but it could point to 1H 2016 sales being a bit underwhelming.

 

[Zahid Iqbal]

very less cost price, very high sale price, i will never buy it

 

[StrangerGuy]

very less cost price, very high sale price, i will never buy it

I got some good book recommendations for you, one is "Economics 101: the free market and profit maximization" and the second "How to not type like a flipping retard" 😀



Warning for Personal Attack, going after other posters is unacceptable. Any other attacks in this thread will receive infractions.

Moderator TheStu

 

[Artdeco]

very less cost price, very high sale price, i will never buy it

Well, they do generate radiation that penetrates aluminum foil.

The numbers are impressive, unfortunately, Wall Street ignores them because so much revenue is from the iPhone, they want a more diverse & robust revenue stream.

Android inc. will be interesting to watch, Huawei in particular seems poised to make some big gains in market share.

iPhone sales were definitely good y/o/y at over 20%, though including China at launch seems to be taking the wind a bit out of next quarter. Guidance seems to be flat y/o/y for iPhones sales in the holiday quarter which would be the first time in a while to have flat growth.

It's hard to find anything to criticize when you're pulling in over 11 billion in quarterly profit, but it could point to 1H 2016 sales being a bit underwhelming.

Exactly, I think the explosive growth is over, and the danger to Apple is that they need to stay ahead of the rest of the players and keep customers convinced they need flagship phones while the lower end and midrange becomes commoditized.

They've done a great job so far, pretty impressive.

Also interesting that 30% of buyers last quarter came from Android phones.

 

[Commodus]

Exactly, I think the explosive growth is over, and the danger to Apple is that they need to stay ahead of the rest of the players and keep customers convinced they need flagship phones while the lower end and midrange becomes commoditized.

They've done a great job so far, pretty impressive.

Also interesting that 30% of buyers last quarter came from Android phones.

Well, avoiding commoditization has been Apple's specialty for a while. It's one of the few PC makers to increase shipments and market share, and that's despite prices that are much higher than the industry average (which tends to be just a few hundred dollars).

The smartphone market isn't the same, of course, but I suspect Apple is already doing with the iPhone what it did with the Mac: become the aspirational brand, own the high end, and let the rest of the industry kill itself chasing after market share. The biggest mistake that anti-Apple zealots make is assuming that Apple cares about playing the market share game. All it wants is enough share to remain influential and keep improving its profit -- it'd rather remain standing 10 years from now than get a market share lead that would likely evaporate after a year or two.

 

[poofyhairguy]

The biggest mistake that anti-Apple zealots make is assuming that Apple cares about playing the market share game.

To be completely fair a couple of years ago before Apple aspired to be a luxury brand they tried to play the market share game and failed. The iPhone 5C is probably the biggest flop in the iPhone lineup so far.

 

[AznAnarchy99]

very less cost price, very high sale price, i will never buy it

So basically the goal of any for profit company ever?

 

[Artdeco]

Well, avoiding commoditization has been Apple's specialty for a while. It's one of the few PC makers to increase shipments and market share, and that's despite prices that are much higher than the industry average (which tends to be just a few hundred dollars).
E
The smartphone market isn't the same, of course, but I suspect Apple is already doing with the iPhone what it did with the Mac: become the aspirational brand, own the high end, and let the rest of the industry kill itself chasing after market share. The biggest mistake that anti-Apple zealots make is assuming that Apple cares about playing the market share game. All it wants is enough share to remain influential and keep improving its profit -- it'd rather remain standing 10 years from now than get a market share lead that would likely evaporate after a year or two.

Exactly, like the MacBook Retina, overpriced and 1 port, I love mine, it's barely more than a tablet replacement but it fits my needs, first solid state laptop I've owned, not even a fan in it.