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Apple Q3 Earnings: iPhone Sales Continue To Slide, But Apple Beats Estimates (bgr.com)

Posted by BeauHD on from the up-and-down dept.

An anonymous reader quotes a report from BGR: Apple on Tuesday announced fiscal third-quarter earnings of $1.42 per share, or $7.8 billion in net income, on sales totaling $42.4 billion. That compares to a net profit of $1.85 per share in the same quarter last year, while revenue slid from the Q3 record of $49.6 billion that Apple set in fiscal 2015. Ahead of Apple's report, analysts were expecting EPS to come in at $1.39 while revenue was seen dropping to $42.1 billion, right in the middle of Apple's guidance of between $41 billion and $43 billion. iPhone sales in fiscal Q3 2016 totaled 40.4 million units, down from the 47.5 million iPhones the company sold during the June quarter last year, which was also a third-quarter record. Wall Street's consensus for this past quarter was 40 million units. The company said it expects between $45.5 billion and $47.5 billion in sales for the fiscal fourth quarter. The only part of Apple's business that's really growing is its mobile apps and online services. The company reported a 19 percent sales jump for the segment that includes iTunes, Apple Music, the App Store and services like Apple Pay and iCloud storage. "That segment produced nearly $6 billion in sales -- more than Apple pulled in from quarterly sales of either iPad or Macs," reports ABC News.

54 comments

  1. They make more on pokemon go than nintendo does by Anonymous Coward · · Score: 0

    so it looks good for them.

  2. Maybe they can "invent" Angry Bird Go by xxxJonBoyxxx · · Score: 0

    Maybe they can "invent" Angry Bird Go and pull their shares up like Nintendo did. That works, right?

    1. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      Nintendo share price jump was/is a bubble based on investor misunderstanding. They don't own and didn't create Pokémon Go, They own a part of the company that does make it, but that means Apple and google make more money from pokemon go than Nintendo do and a lot of misinformed investors are going to be upset and badly burnt.

    2. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      Maybe if the refresh their hardware (Mac Pro line is dated), release a real Mac Pro, a box that's upgradable and has slots!?!!! Then produce laptops with ports on them so you don't need dongles. Then add a headphone jack back onto iPhone 7?

      Netcraft confirms Apple is dying.

    3. Re:Maybe they can "invent" Angry Bird Go by amiga3D · · Score: 0

      Better yet how about a phone with a removable battery and SD card storage? Those are the two reasons I've never bought an iPhone.

    4. Re:Maybe they can "invent" Angry Bird Go by p3ngwin · · Score: 1

      Actually it's worse than that.

      "The Pokemon Company" usually makes the games, and Nintendo owns 32% stake in that company. Pokemon Go, is made by Niantic, the same company that made the Android game "Ingress".

      The Pokemon Company licensed the Pokemon IP to Niantic, so we can guess the usual, less than 10% royalties.

      This means Nintendo is receiving money from their 32% stake in The Pokemon Company, which itself is only receiving less than 10% from Niantic's Pokemon Go

    5. Re:Maybe they can "invent" Angry Bird Go by danbob999 · · Score: 3, Interesting

      Because Apple is no longer a computer company. They are a phone/tablet company.
      They don't care about their Mac Pro sales unless they can have very high margins, much larger than competing PC makers. That's what the current Mac Pro is, a niche product for all two people out there who need an expensive workstation with professional video cards / CPU but no room for storage.

    6. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      We really have no idea what kind of royalty structure the Pokemon Company devised. Nintendo is known for being very hard-nosed negotiators. This isn't the same as licensing a movie for a video game. Nintendo and Pokemon are both investors in Niantic so they get their beak wet there as well.

    7. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      No reason you have to replace a battery! I've had iPhones for 3-4 years and the battery is still as good as the first day. Never had to replace the battery in the iPhone. My co-workers after a year are complaining about their battery in their Android phones and end up buying new ones. That is another Android problem, don't think it exists in the Apple world as well.

      As for storage, that isn't Apple's model! They are a company and have to make money to stay in business! Buying a computer from Apple you look at the screen size first, HD second, and any other options wanted after that. With the iOS devices you look at storage, screen size then anything after that!

    8. Re:Maybe they can "invent" Angry Bird Go by amiga3D · · Score: 2, Interesting

      I see your point and that's fine if you like getting fucked over. I don't so I don't buy iPhones. I don't mind paying a premium for superior equipment but it has to have the features I want. Why in hell would I pay nearly one thousand dollars for a phone that wasn't what I wanted? I've seen many an iPhone 3 years or less old with a swollen case and dead battery. My Samsung S5 original battery still lasts a while but it's not the same after a year and a half and neither is your iPhone. I bought a brand new Samsung battery off Amazon for less than 20 bucks to the door and now my Phone stays charged all day instead of 85 percent of it and I still have the old battery I can use if for some reason I can't get to a charger. Storage depends on usage and a lot of people are happy with 64GB but I like 128 better and the ability to swap out. I crushed my S4 so bad I bent the battery in it but I pulled the SD card and popped it in the new S5 with all my pictures and music on it. Try that with your iPhone. I refuse to buy a phone designed for the manufacturers convenience rather than mine.

    9. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      My old iPhone 5s is coming up on 3 years old stays charged all day. I plan on having it for another couple years before I upgrade to something more evolved.

      In fact I really don't notice any battery decline at all. Battery rarely drains rapidly unless I am gaming on it for a number of hours or running it as a hotspot. The old iPhone 3GS and 4's I have are still working fine for the kids. Never have had one die from a battery issue (nor swell) and we have 7 phones in our family. All working fine as far as battery goes. The 3GS is 7 years old at this point and still runs pretty well for how old it is. Could a battery die? Sure. But then again I have taken many iPhones apart myself. Replaced 2 broken screens and replaced a broken charging connector. It is not that hard to pop a battery in at that point.

      My phone only has 16GB memory, but even that isn't that big a deal. I can take a few hundred pics and lots of video before dumping the phone.
      Could more memory be nice? Perhaps, but then again having to dump the boatloads of photos and videos that would accumulate and likely fill up my server more quickly with cat videos and such might not be that great. Now I use more discretion when I am using the camera. I guess I prefer to monitor my usage and cull the herd more.

      I wouldn't say I am getting "fucked over" just because I don't have a hatch for a battery or an SD card.
      Obviously it depends on how you use your device, but not having hatches for batteries and SD cards is kind of nice.
      I will be happy when there are zero points of entry for soot grime or liquid.

      I wouldn't say the iPhone is designed for the manufacturers convenience.
      Just as your phone is an offering on the market that happens to have 2 features you value. My iPhone offers the feature of not having useless hatches I believe disturb the integrity of the phone. It is more seamless, more rigid, with cleaner lines. Not having to conform the design of the phone to some particular battery shape means the phone can be designed more cleanly. Ultimately, the trend is for zero entry points into the phone. Top end phones will simply not have battery hatches and SD card ports. That is how the market is going so eventually just as big box generic PC cases have been going away in favor of tiny non-expandable units, most high end phone offerings will be without such Kludgy things as ports and hatches. A phone will be designed as it needs to be for its usable life. A commodity item. It is about market choices is all.

      99.99% of people don't need to swap batteries period. This is more the case with each passing generation of phone.
      And with an increasing cloud based world, one doesn't really need an SD card to store stuff. Junk on my phone just can go to my own personal cloud server if I want.
      When my wife crushed her phone... we got the replacement and she was up and running with her stuff from the cloud backup in no time. Photos on the cloud, music on the cloud.

      Now if you don't want to use any cloudy-type of stuff but want to keep your junk local... fine, but you cannot persist in the delusion that your phone is superior because it has ancient technology on board. What happens when you drop your phone off of the boat or it gets crushed by a car. Will an SD card help you then? You might wish you had upgraded yourself from dependence upon uni-point tech from 10 years ago.

      Anyhow... you seem to have a solution for yourself right now, but 5 years from now you may find you are unable to find any quality offerings with your cherished SD slot and Battery hatch.

    10. Re:Maybe they can "invent" Angry Bird Go by amiga3D · · Score: 1

      I pull settings for a new phone from Google so that I have all the contacts and e-mail from my old system. No problem. 80 gigs of music? That's takes a while even with a 50MB connection over wifi. The only thing I'm missing from the iPhone is iOS which is superior to Android but not enough for me to give up needed functionality. I think there are enough people that like to have physical control of their data without a "cloud" hanging over them for someone to sell an SD equipped phone. So what if it costs an extra dollar or two, the greedy fuckers are making hundreds of dollars off every phone. The only reason to exclude it is to make more money charging ridiculous sums of money for something that costs them almost nothing. Of course if you're happy with that situation then that's fine for you. I guess I'm a control freak.

    11. Re:Maybe they can "invent" Angry Bird Go by Bing+Tsher+E · · Score: 1

      The term that mainstream journalists use is:

      Apple is a gadget company.

      They even make expensive novelty gadgets now, like a computer disguised as a kitchen trash can.

    12. Re:Maybe they can "invent" Angry Bird Go by Bing+Tsher+E · · Score: 1

      The Mac Pro is an expensive workstation to use for developing iOS apps.

      It's kinda like the expensive proprietary hardware that Game Developers had/have to buy to develop games for Nintendo and Sony consoles.

    13. Re:Maybe they can "invent" Angry Bird Go by danbob999 · · Score: 1

      except that you can develop iOS apps just fine on the cheaper (but still overpriced) Mac mini

    14. Re:Maybe they can "invent" Angry Bird Go by Hognoxious · · Score: 1

      I can't, because I only use luddite software.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    15. Re:Maybe they can "invent" Angry Bird Go by Anonymous Coward · · Score: 0

      Pokemon Go, is made by Niantic, the same company that made the Android game "Ingress".

      You, do not know how to use a comma.

  3. Estimate Go by turkeydance · · Score: 0

    wander Wall Street for percentages

  4. Reminds me... by msauve · · Score: 1

    This reminds me of an old Apple saying from the '90's. "We suck less." (than we were expected to)

    --
    "National Security is the chief cause of national insecurity." - Celine's First Law
    1. Re:Reminds me... by amiga3D · · Score: 1

      Hey, they're doing better than microsoft.

      https://www.microsoft.com/en-u...

    2. Re:Reminds me... by msauve · · Score: 3, Interesting

      Microsoft is the new IBM. Apple is the new Microsoft. Google is the new Apple. Facebook is the new Google, but why is a mystery.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    3. Re:Reminds me... by tomhath · · Score: 1

      Apple's revenue is higher than Microsoft's, but Apple's dropped 14% versus MS 5% drop. Neither looks all that great.

    4. Re:Reminds me... by Tough+Love · · Score: 1

      Microsoft is the new IBM. Apple is the new Microsoft. Google is the new Apple. Facebook is the new Google...

      ...Tencent is the new Facebook.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    5. Re:Reminds me... by Anonymous Coward · · Score: 0

      Google is far from Apple! Google is the new Microsoft as they copy everything! Apple is still Apple and nothing has changed. Under Jobs Apple didn't have jaw dropping product releases every year! It took many years between the iPod, iPad and iPhone!

    6. Re:Reminds me... by amiga3D · · Score: 1

      Our computers at work got upgraded and suddenly Bing is the default search. I can definitely say that MS did not copy Google's search function. Bing is almost useless.

    7. Re:Reminds me... by amiga3D · · Score: 4, Insightful

      I don't know. A lot of companies would like to make 7.8 billion dollars in one quarter. What other computer manufacturer made that kind of money in Q3? Sure, they didn't make the money they did last year but man, look at how stupendous last year was for them. You can't do that every year, it's a tough act to follow.

    8. Re: Reminds me... by Anonymous Coward · · Score: 0

      The problem is that sales are going down for the second or third quarter in a row. Tablet and phone sales across the industry are down. Apple's biggest seller by far is the iPhone and its sales are slumping.

    9. Re: Reminds me... by Plumpaquatsch · · Score: 2

      The problem is that sales are going down for the second or third quarter in a row. Tablet and phone sales across the industry are down. Apple's biggest seller by far is the iPhone and its sales are slumping.

      Again, you are ignoring just how well they did last year. Compared to the same Quarter 2 years ago, Apple sold 14.8% more iPhones. IOW, if Apple had sold 9.8 million iPhones less in FQ3 of 2015, we'd be looking at a comfortable climb of 7.1% for this and the previous year's quarter.

      --
      Of course news about a fake are Fake News.
    10. Re: Reminds me... by AmiMoJo · · Score: 1

      As usual, the truth is somewhere in between. The increased sales from two years ago are due to moving into new markets like China. The fall is due to declining sales in their original western markets.

      Since the Chinese market is growing fast they would be doing badly if they weren't increasing their sales rapidly too. But actually, when you look at the numbers, they are getting some stiff competition from Chinese manufacturers and from the usual Samsung/HTC/Sony/etc. block. Investors tend to be good at maths so they consider this to be bad news. Not terrible or a sign of impending disaster or anything like that, but not a good sign either.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    11. Re: Reminds me... by Plumpaquatsch · · Score: 1

      As usual, the truth is somewhere in between. The increased sales from two years ago are due to moving into new markets like China. The fall is due to declining sales in their original western markets.

      Since the Chinese market is growing fast they would be doing badly if they weren't increasing their sales rapidly too. But actually, when you look at the numbers, they are getting some stiff competition from Chinese manufacturers and from the usual Samsung/HTC/Sony/etc. block. Investors tend to be good at maths so they consider this to be bad news. Not terrible or a sign of impending disaster or anything like that, but not a good sign either.

      Yeah? You mean the stiff competition didn't actually wipe away the previous years competition instead? Where the fuck is Xiaomi now, the company that was sure to blow away Apple? And if you and the investors were good at math, you wouldn't expect Apple to sell more phones just a year after they released their first phablet (which coincidently is also the product that drove up their sales far beyond what you expect). Because Apple buyers don't buy a new phone every year, no matter what "experts" claim.

      --
      Of course news about a fake are Fake News.
    12. Re: Reminds me... by Bing+Tsher+E · · Score: 1

      What I like is that Apple is putting all their resources into Mobile, and slowly the competition is taking them down in that sector.

      But that isn't the really good part. The good part is that Apple for some reason has abandoned the Macintosh section of the company. They've quit doing anything that would convince people to buy a new Mac. So they might fucking die over this.

      We can be optimistic, anyway.

    13. Re:Reminds me... by LynnwoodRooster · · Score: 1

      Apple's not a computer manufacturer. If you went by just their computers, they'd be tiny (Dell is about 3X the revenue of Apple's computer division). Apple is a phone/tablet-consumer electronics company that happens to sell a few computers. They do that very well; Samsung is one of the few consumer electronics companies that makes more revenue and profit than Apple, but there are few and far between.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    14. Re: Reminds me... by LynnwoodRooster · · Score: 1

      Latest data shows that Apple is falling in China The Chinese market as a whole is slowing down, and domestic manufacturers rule (Huawei, Oppo. Xiaomi all top Apple). Apple is losing in the China market - and will lose in the Indian market, and the other SE Asia markets. Their phones and iTunes/App Store are too expensive and difficult to access for the half of the world that lives in China, India and SE Asia.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    15. Re:Reminds me... by amiga3D · · Score: 1

      According to this...

      https://en.wikipedia.org/wiki/...

      Apple is 5th. That's computers only, no mobile devices. I can't find q3 results for samsung but they were around 7 billion in q2. I'd have to say Samsung is about apple's only real competition. I liked their phones until recently. I own an S5 now although when my wife needed a new phone she decided on an LG. She was going to get another note to replace her note 3 but didn't like the changes.

    16. Re: Reminds me... by Plumpaquatsch · · Score: 1

      What I like is that Apple is putting all their resources into Mobile,

      Yawn. They put far more into the Mac than they did 10 years ago - and the marketshare turned up as a result. So do they in all other segments of their business, old and new - well apart from the iPod. Not to mention those projects that aren't even on the market yet.

      But please do keep deluding yourself.

      --
      Of course news about a fake are Fake News.
    17. Re: Reminds me... by Plumpaquatsch · · Score: 1

      Latest data

      Your "latest data" is like all you latest data, out of date. Why do you always pretend?

      But in addition you again ignore my original point. Nor do you disprove my other point - actually the article confirms it.

      --
      Of course news about a fake are Fake News.
    18. Re:Reminds me... by Plumpaquatsch · · Score: 1

      Apple's not a computer manufacturer.

      Yeah, that's why they appear on the top 5 computer makers list - because they don't actually sell any.

      --
      Of course news about a fake are Fake News.
  5. Re:Apple Beats Estimates--- by amiga3D · · Score: 1

    not funny

  6. Coulda been worse by Tough+Love · · Score: 1, Insightful

    Market relief because sales collapse is not quite as fast as anticipated. Price back to a few bucks lower than three months ago. Downward march and continued loss of market share to Android expected to continue, this ends at zero net cash. Apple's problem: phones are overpriced and only your mom wants one. Apple's best bet for the long term is to introduce an Android phone.

    --
    When all you have is a hammer, every problem starts to look like a thumb.
    1. Re:Coulda been worse by Tough+Love · · Score: 1

      Market relief because sales collapse is not quite as fast as anticipated. Price back to a few bucks lower than three months ago. Downward march and continued loss of market share to Android expected to continue, this ends at zero net cash. Apple's problem: phones are overpriced and only your mom wants one. Apple's best bet for the long term is to introduce an Android phone.

      Wow, AAPL fan(atic)s out with bitter mod points.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    2. Re:Coulda been worse by 110010001000 · · Score: 0

      No, you are just stupid. They sold 40.4 million phones in 3 months. Everyone knows the iPhone 7 is right around the corner, or the sales would have been a lot higher. They made $7.8 billion in cash in 3 months. Everyone upper middle class and up has an iPhone at this point.

    3. Re:Coulda been worse by antdude · · Score: 1

      Prove it that my mom wants one. She still prefers her old dumb phone. :P

      --
      Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
    4. Re:Coulda been worse by Plumpaquatsch · · Score: 1

      Apple's best bet for the long term is to introduce iPhone 7.

      FTFY

      --
      Of course news about a fake are Fake News.
    5. Re:Coulda been worse by LynnwoodRooster · · Score: 1

      Hi there! Upper class (not middle class - top 10%) here, no iPhone! And checking around - I'd say there's a lot of Samsung phones I see in the hands of upper middle and upper class folks. My family is pretty much Apple-free... And with Apple's continued China slide (and essentially zero presence in India), doesn't look like they're going to continue the growth they've enjoyed. Saturated market, high prices, heavy competition - not good for the long term.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    6. Re:Coulda been worse by Anonymous Coward · · Score: 0

      What has this to do with Apple fans? It is just that your business plan isn't a good one. You say that Apple has to abandon its only market segment where it still grows: Cloud and iTunes and give it to Google instead. It also destroys what makes an iPhone an iPhone: iOS and its eco system. It is simply better for many people than the alternative (which is of course a personal opinion). Apple will never be able to compete on hardware with the cheap Chinese knock offs. Apple just has to make one 'good' Android phone and within half a year you will have a dozen Chinese look a likes with similar features at 1/3 the price.

  7. Re:$6 Billion IS Chump Change by Anonymous Coward · · Score: 0

    Timmy is loosing touch with reality and fast!

    Were you expecting him to be tightening touch with reality?

  8. Of course iPhone sales are falling by CanadianMacFan · · Score: 4, Insightful

    Their primary markets are saturated and they aren't bringing out any must have features on the new iPhones so many people are keeping their existing ones longer. It will get worse if they do go to a three year cycle between major redesigns as it will encourage people to hang onto their phone longer.

    I think part of the problem is the drive to make phones thinner all of the time. If manufacturers added battery capacity then they could be adding new functionality or greatly improving the sensitivity of the existing sensors. Heck, just improving the battery life of the phone would cause many people to upgrade.

  9. Bogus Guidance by Luthair · · Score: 0

    One wonders why the SEC has never looked at Apple for continually releasing low ball guidances then 'beating' them.

    1. Re:Bogus Guidance by gtall · · Score: 1

      Errr...because most companies do this. Those legions of bean counters pretty much know their markets. The one thing they (and everyone else) are blind to are black swans.

    2. Re:Bogus Guidance by Anonymous Coward · · Score: 0

      I think they revised their way of determining their guidance once a few years back to be more conservative.
      It seems like Apples guidance for the most part has been fairly accurate and not low ball. They provide a range.

      The markets own analysis has been audacious however ... sometimes wildly so and Apple Stock tends to take a beating when it doesn't meet market standards that are out of line with reality.

      So not Bogus Guidance.
      Apple was beating the lowball estimate by "Analysts" in this case

  10. why is this a surprise? by wyHunter · · Score: 1

    Why is this a surprise? Back in the day of carrier subsidies, many people refreshed their devices every two years and took another smartphone for ~$200, at least in the USA. When you're paying 600-750 for a new iPhone - why would you do it except when absolutely needed?