Well, they did it again. Apple released its earnings last night and once again came in over estimates. Here is a quick look at the numbers and a brief glimpse at what the future might hold for the biggest tech company in the world.
1. It’s All About The iPhone
They sold 35.2 million iPhones, which was an increase of 12%. That drove the revenue, which was up 6% to $37.4 billion dollars compared to $35.3 last year.
2. The Bad News Ain’t So bad
There was a dip in iPads, selling 13.3 million vs. 14.6 million last year. Forbes magazine suggests that it’s either because of competition or because the product replacement cycle is slower than expected. Personally, I replace phones far more quickly than tablets, so I tend to lean toward the latter explanation. After all, how often will you upgrade the family “iPad” vs. your own personal phone? It should be noted that the entire U.S./Western Europe tablet markets were down 5% too, not just apple.
3. People Are Buying Macs
Computer sales were actually up, which could be a sign that more and more consumers are buying into the Apple ecosystem (which of course is the company’s grand vision). They sold 4.4 million Macs vs. projections of 3.9 million, exceeding expectations on Wall Street.
4. An Opening To Buy
If you read between the lines, there’s mostly good news here, which is partly why the stock is up 3% today. So is it time to buy? It comes down to whether or not you believe in the bigger iPhone 6 that’s due, and the iWatch coming after that. But the primary focus should be on the 6. If you think the new phone is a massive windfall for Apple, look for a buying window soon that you are comfortable with. If you think the larger phones aren’t really a big deal, then there’s really no reason to get involved in the stock.
5. An Argument For The 6
So here’s a very strange article written by Jim Edwards over at Business Insider, called I Ditched My iPhone For A Samsung Galaxy S And Was Blown Away By What I Was Missing With Apple. In it, Edwards talks about, well… the title is self-explanatory, perhaps the most self-explanatory title ever. I clicked on the article expecting to be enlightened. After all, I admit, when I see the Samsung phone, I’m curious as to whether people are truly enjoying the experience. However, instead of pointing out all the advantages of the device itself, Edwards spends paragraph after paragraph talking about how big the phone is. Samsung is better for texting, he says. Why? Because the phone is bigger and he can hit the keys more easily. Samsung is better for watching movies. Why? Because the phone is bigger and he can see more screen. Samsung is better for playing apps. Why? Well, you get the point. Bigger is better. But here’s the thing:
Instead of reading the article learning about the advantages that Samsung offers, I finished the article beyond excited for the iPhone 6.
Edwards says after staring at the big Samsung screen and picking up the iPhone again, it looked teeny, old, outdated. He can’t imagine going back. He’s probably right. It sounds like bigger screens are the way to go, and Samsung beat Apple to the punch on this one. So does that mean ditch the stock? It means the opposite:
The iPhone 6 is going to be a must-have. Over 60 million iPhone users are going to want the bigger screen.
If you think that might be true, you’ll want to look for an opening to get in on the stock.