Apple’s App Store pulled in $1.22B over the holidays plus a record $322M on New Year’s

Apple today is sharing some good news in the wake of yesterday’s reveal of a significant, market-moving cut to its revenue forecast, attributed to declining iPhone sales in China’s slowing economy. The company says its App Store, at least, was having a good holiday. This year, customers spent $1.22 billion during the 2018 holiday season and broke a new single-day record on New Year’s Day.

The $1.22 billion in App Store spending occurred between Christmas Eve and New Year’s Eve, Apple said. This is typically the peak season for App Store consumer spend, as customers load up new iPhones and iPads with apps, and use their App Store Gift Cards to buy paid apps and games.

Apple also said customers spent more than $322 million on New Year’s Day 2019, which set a new record for single-day spend.

Over the holidays, games and self-care apps were the most popular categories, with Fortnite and PUBG among the most downloaded games, along with Brawl Stars, Asphalt 9 and Monster Strike, Apple said.

Meanwhile, as the New Year kicks off, customers are now turning to health and fitness apps, educational apps and productivity apps — likely to some extent inspired by their New Year’s resolutions. The apps leading these categories include 1Password, Sweat and Luminosity.

Last year, Apple also announced a record-breaking holiday season, with $890 million spent during the week of Christmas Eve and $300 million on New Year’s Day 2018.

Apple CEO Tim Cook, in his letter yesterday, signaled that the App Store remains one of the bright spots in the company’s “Services” category, even as he delivered the crushing news of a slowdown in iPhone sales.

The company said it is now expecting $84 billion in the quarter that ended Saturday, down from its earlier estimate of $89 billion to $93 billion. However, “Services” generated more than $10.8 billion in revenue during the quarter, with each geography hitting a new quarterly record. The company noted, too, it’s still on track to achieve its goal of doubling the size of this business from 2016 to 2020.

Today, Apple said the “Services” business set all-time records beyond the App Store in Apple Music, Cloud Services, App Pay and the App Store’s search ad business.

A record-breaking end of the year for the App Store shouldn’t come as a surprise, given that the overall app economy is continuing to grow, with mobile games still driving revenues and the subscription app business also making gains. App Annie recently predicted app stores will surpass $122 billion globally in 2019, including the App Store, Google Play and third-party Android app stores in China, combined.

Prior to Apple’s report, app store intelligence firm Sensor Tower had last week noted that the U.S. App Store broke spending records on Christmas, with a record of $54 million on that day alone — up 31 percent over the year before. It had also passed the $52 million spent on Black Friday 2018, the firm said.

Apple typically releases an App Store holiday report at this time of the year, so its release today isn’t necessarily an attempt to create good press a time when its stock is crashing. But given Apple’s usual attempts at spin, it may be seen that way.

from Apple – TechCrunch https://tcrn.ch/2QibxsN

Apple stock has dropped 38 percent in 90 days

Apple stock was down over 9 percent overnight and continued the downward trend in trading this morning. In fact, the company’s stock price is down a total of 38 percent since October. This, after the company halted trading yesterday afternoon to provide lower guidance for upcoming earnings. As the iPhone upgrade market softened, it was having a big impact on revenue, at least in the short term and Apple stock took a big hit as a result.

On October 3, the stock was selling at 232.07 per share, and while the price has fluctuated and the market in general has plunged in that time period, the stock has been on a downward trend for the past couple of months and has lost approximately $87 a share since that October high point.

 

Last night, before the company briefly stopped trading to make its announcement, the stock stood at $157.92 a share. This morning as we went went to publication, it was recovering a bit, but still down 8.19 percent to $144.981.

D.A. Davidson senior analyst, Tom Forte says yesterday’s announcement while not completely unexpected was surprising given Apple’s traditionally strong position. “We knew that iPhone unit sales were weak, but just not how weak,” he said.

The biggest factor in yesterday’s announcement in Forte’s view, was China where he says the company generates 20 percent of its sales. As the US-China trade war drags on, it’s having an impact on these sales. This could be due to a combination of factors including a weakening Chinese economy as a result of the trade war, or patriotism on the part of Chinese consumers, who are choosing to buy Chinese brands over of the iPhone.

This also comes at a time when Apple had already indicated that iPhone sales were weak in other worldwide markets including India, Russia, Brazil and Turkey. This already helped weaken the iPhone sales worldwide, although Forte still sees the Chinese market as the biggest factor in play here.

Forte says that in spite of the soft iPhone performance, the good news is the rest of the product portfolio is up 19 percent and that could bode well for the future. What’s more, the company has set aside $100 billion for stock buy-back purposes. “They have the balance sheet. They have the stock buy-back program. They still generate very significant free cash flow, and if the individual investor won’t buy the stock, then the company will buy the stock,” he explained.

In a report released this morning, financial analysts Canaccord Genuity believe that in spite of yesterday’s report, the company is still fundamentally sound and they continue to recommend a Buy for Apple stock. “We maintain our belief Apple can expand its leading market share of the premium-tier smartphone market and the iPhone installed base (excluding refurbished iPhones) will exceed 700M in 2018. This impressive installed base should drive iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns. We reiterate our BUY rating but decrease our price target to $190 based on our lowered estimates,” the company wrote in a report released this morning.

Forte says the unknown-unknown here is how the US-China trade war plays out and as long as that situation remains fluid, the company might not recover that income in the near term in spite of stronger sales across the catalogue.

from iPhone – TechCrunch https://tcrn.ch/2BW8CAN

Apple stock has dropped 38 percent in 90 days

Apple stock was down over 9 percent overnight and continued the downward trend in trading this morning. In fact, the company’s stock price is down a total of 38 percent since October. This, after the company halted trading yesterday afternoon to provide lower guidance for upcoming earnings. As the iPhone upgrade market softened, it was having a big impact on revenue, at least in the short term and Apple stock took a big hit as a result.

On October 3, the stock was selling at 232.07 per share, and while the price has fluctuated and the market in general has plunged in that time period, the stock has been on a downward trend for the past couple of months and has lost approximately $87 a share since that October high point.

 

Last night, before the company briefly stopped trading to make its announcement, the stock stood at $157.92 a share. This morning as we went went to publication, it was recovering a bit, but still down 8.19 percent to $144.981.

D.A. Davidson senior analyst, Tom Forte says yesterday’s announcement while not completely unexpected was surprising given Apple’s traditionally strong position. “We knew that iPhone unit sales were weak, but just not how weak,” he said.

The biggest factor in yesterday’s announcement in Forte’s view, was China where he says the company generates 20 percent of its sales. As the US-China trade war drags on, it’s having an impact on these sales. This could be due to a combination of factors including a weakening Chinese economy as a result of the trade war, or patriotism on the part of Chinese consumers, who are choosing to buy Chinese brands over of the iPhone.

This also comes at a time when Apple had already indicated that iPhone sales were weak in other worldwide markets including India, Russia, Brazil and Turkey. This already helped weaken the iPhone sales worldwide, although Forte still sees the Chinese market as the biggest factor in play here.

Forte says that in spite of the soft iPhone performance, the good news is the rest of the product portfolio is up 19 percent and that could bode well for the future. What’s more, the company has set aside $100 billion for stock buy-back purposes. “They have the balance sheet. They have the stock buy-back program. They still generate very significant free cash flow, and if the individual investor won’t buy the stock, then the company will buy the stock,” he explained.

In a report released this morning, financial analysts Canaccord Genuity believe that in spite of yesterday’s report, the company is still fundamentally sound and they continue to recommend a Buy for Apple stock. “We maintain our belief Apple can expand its leading market share of the premium-tier smartphone market and the iPhone installed base (excluding refurbished iPhones) will exceed 700M in 2018. This impressive installed base should drive iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns. We reiterate our BUY rating but decrease our price target to $190 based on our lowered estimates,” the company wrote in a report released this morning.

Forte says the unknown-unknown here is how the US-China trade war plays out and as long as that situation remains fluid, the company might not recover that income in the near term in spite of stronger sales across the catalogue.

from Apple – TechCrunch https://tcrn.ch/2BW8CAN

Sorry that I took so long to upgrade, Apple

Apple had some bad news tonight. It was so bad in fact that it had to halt trading for a time while posting a grim report that its numbers would be lower than it had forecast at the last quarterly earnings report in November. Apple blamed faltering sales in Asia, particularly in China, for the adjustment, but I’m afraid it can lay at least part of the blame on me too.

You see I was part of the problem as well. On the bright side, I finally upgraded my iPhone this week. I had been using an old iPhone 6 that was over three years old. It had become crotchety with a bad battery life and the recharge cable wouldn’t say stuck without some serious coaxing. The phone had to be flat on a table, and would often disconnect if I even brushed against the cord or looked at it the wrong way.

I had been thinking about upgrading for several months, but I kept putting it off because the thought of spending $1000 for a new phone frankly irked me, and I had after all paid off my trusty 6 in full long ago. I was going to squeeze every bit of life out of it, dammit.

In spite of my great frustration with my old phone, it took the enticement of a $200 credit to finally get me to replace it, as I’m sure the promotion was intended to do. Just yesterday on New Year’s Day, I headed to my closest Apple Store and I finally did right by the company.

I replaced my ancient 6, but I did something else that probably hurt Apple as part of its death by a thousand cuts. I went into the store thinking I would buy the more expensive XS, but in the end I walked out with the lower-cost XR. I looked at the two phones and I couldn’t justify spending over $1000 for a phone with 256 GB of storage. I wanted a phone with longer battery life and a decent display and camera and the XR gave it to me. Yes, I could have gotten an even better phone, but in the end the XR was good enough for me, and certainly a huge upgrade over what I had been using.

Clearly lots of people across the world had similar thoughts, and one thing lead to another and before you knew it, you had a situation on your on your hands, one that forced you to halt the trading of your stock and report the bad news. The stock price is paying a price, down over 7 percent as I write this post.

So, sorry Apple, but it appears that there is a tipping point when it comes to the cost of a new phone. As essential as these devices have become in our lives, it’s just too hard for many consumers around the world to justify spending more than $1000 for a new phone, and you just have to realize that.

from iPhone – TechCrunch https://tcrn.ch/2QlAraS

Sorry that I took so long to upgrade, Apple

Apple had some bad news tonight. It was so bad in fact that it had to halt trading for a time while posting a grim report that its numbers would be lower than it had forecast at the last quarterly earnings report in November. Apple blamed faltering sales in Asia, particularly in China, for the adjustment, but I’m afraid it can lay at least part of the blame on me too.

You see I was part of the problem as well. On the bright side, I finally upgraded my iPhone this week. I had been using an old iPhone 6 that was over three years old. It had become crotchety with a bad battery life and the recharge cable wouldn’t say stuck without some serious coaxing. The phone had to be flat on a table, and would often disconnect if I even brushed against the cord or looked at it the wrong way.

I had been thinking about upgrading for several months, but I kept putting it off because the thought of spending $1000 for a new phone frankly irked me, and I had after all paid off my trusty 6 in full long ago. I was going to squeeze every bit of life out of it, dammit.

In spite of my great frustration with my old phone, it took the enticement of a $200 credit to finally get me to replace it, as I’m sure the promotion was intended to do. Just yesterday on New Year’s Day, I headed to my closest Apple Store and I finally did right by the company.

I replaced my ancient 6, but I did something else that probably hurt Apple as part of its death by a thousand cuts. I went into the store thinking I would buy the more expensive XS, but in the end I walked out with the lower-cost XR. I looked at the two phones and I couldn’t justify spending over $1000 for a phone with 256 GB of storage. I wanted a phone with longer battery life and a decent display and camera and the XR gave it to me. Yes, I could have gotten an even better phone, but in the end the XR was good enough for me, and certainly a huge upgrade over what I had been using.

Clearly lots of people across the world had similar thoughts, and one thing lead to another and before you knew it, you had a situation on your on your hands, one that forced you to halt the trading of your stock and report the bad news. The stock price is paying a price, down over 7 percent as I write this post.

So, sorry Apple, but it appears that there is a tipping point when it comes to the cost of a new phone. As essential as these devices have become in our lives, it’s just too hard for many consumers around the world to justify spending more than $1000 for a new phone, and you just have to realize that.

from Apple – TechCrunch https://tcrn.ch/2QlAraS

Apple lowers guidance on Q1 results

Apple CEO Tim Cook issued a letter today, revising guidance for the company’s Q1 fiscal results. The note highlights a number of reasons for dropping the number, including, perhaps most notably, lower than expected results in emerging markets.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook says in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Apple has invested a lot of future growth in markets like China, and a series of factors have made for disappointing results. Among them a slowed economy and tensions with the U.S. spurred on by tariffs that many believe will spur on a full-fledged trade war.

China is only one piece of the puzzle here. As Cook notes in the letter, there have been fewer iPhone upgrades than expected. The executive notes, however, that non-phone categories (including the Mac, Apple Watch and iPad) did manage to grow 19 percent, but the smartphone has long been a driving force in the company’s economic fortunes, so a blow to those sales can have a substantial impact on the company’s bottom line.

2018 marked the first down year for smartphone numbers since analyst began tracking them, and not even the might iPhone is immune from the larger trends. The industry at large is going through a reckoning as it grapples to determine the next major consumer electronics trend. Apple has continued to be a rare bright spot in a stagnant world of wearables, but the Watch alone isn’t enough to right that ship.

The letter features an unusually dour tone from the chief executive, but Cook rightly notes that Apple has been through plenty of tough times before. “As we exit a challenging quarter, we are as confident as ever in the fundamental strength of our business. We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity, and to emerge better as a result.”

 

from Apple – TechCrunch https://tcrn.ch/2TlTZha

Chinese app developers have invaded India

If you’ve conquered China, then India — the world’s second-largest country based on population — is the obvious next port of call, and that’s exactly what has happened in the world of consumer apps.

Following the lead of Chinese smartphone makers like Xiaomi and Oppo, who have dominated mobile sales in India for some time, the content behind the touchscreen glass in India is increasingly now from China, too. That’s according to a report from FactorDaily which found that 44 of the top 100 Android apps in India were developed by Chinese companies up from just 18 one year prior. (The focus is on Android because it is the overwhelming choice of operating system among India’s estimated 500 million internet users.)

The list of top Chinese apps includes major names like ByteDance, the world’s highest-valued startup which offers TikTok and local language news app Helo in India, and Alibaba’s UCbrowser as well as lesser-known quantities like Tencent-backed NewsDog and quiet-yet-prolific streaming app maker Bigo.

Citing data from Sensor Tower, the report found that five of the top ten Android apps in India are from China, up from just two at the end of 2017.

For anyone who has been watching the Indian technology scene in recent years, this ‘Chinese app store invasion’ will be of little surprise, although the speed of change has been unexpected.

China’s two biggest companies, Alibaba and Tencent, have poured significant amounts into promising Indian startups in recent years setting the stage for others to follow suit and move into India in search of growth.

Alibaba bought into Snapdeal and Paytm via multi-hundred million dollar invests in 2015, and the pace has only quickened since then. In 2017, Tencent invested in Gaana (music streaming) and Swiggy (food delivery) in major deals having backed Byju’s (education) and Ola (ride-hailing) the year prior. The pair also launched local cloud computing services inside India last year.

Beyond those two, Xiaomi has gone beyond selling phones to back local companies and develop local services for its customers.

That local approach appears to have been the key for those app makers who have found success in India. Rather than taking a very rigid approach like Chinese messaging app WeChat — owned by Tencent which failed in India — the likes of ByteDance have developed local teams and, in some cases, entirely local apps dedicated to India. With the next hundreds of millions of internet users in India tipped to come from more rural parts of the country, vernacular languages, local content and voice-enabled tech are some of the key strategies that, like their phone-making cousins, Chinese app developers will need to focus on to ensure that they aren’t just a flash in the pan in India.

You can read more at FactorDaily.

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