Apple is rethinking international iPhone pricing as revenues slip

When Apple lowered guidance on earnings earlier this month, it cited markets like China as a major factor in its disappointing numbers. Sure enough, when earnings hit today, things didn’t look great, as iPhone revenues dipped 15 percent year over year for the quarter.

In an interview with Reuters earlier today, Tim Cook noted that the company is reassessing how it sells handsets outside of the U.S. Apple has traditionally relied on the U.S. dollar to set the price, which has led to steeper costs internationally.

“When you look at foreign currencies and then particularly those markets that weakened over the last year those (iPhone price) increases were obviously more,” the CEO said. “And so as we’ve gotten into January and assessed the macroeconomic condition in some of those markets we’ve decided to go back to more commensurate with what our local prices were a year ago in hopes of helping the sales in those areas.”

There are, of course, a lot of factors at play here. For one thing, global smartphone numbers have been on the decline for the first time since analysts began recording such figures. Handsets have gotten pretty good across the board and afforded fewer killer reasons to upgrade every two or so years.

Economic factors are also at play in a major way. That certainly goes for China, where the country’s slowed growth has led to fewer large purchases. A looming trade war between the U.S.  and China has had an impact as well, with tariffs and other factors, as companies like Huawei have managed to buck the trend in their home country.

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Yep, iPhone revenue is down

Apple’s Q1 earnings are in, and things don’t look too rosy the iPhone. Revenue for the handset has declined 15 percent year over year for the quarter. It’s a pretty hefty drop for device that’s been flying high for so long, but you can’t say Apple didn’t warn us. Earlier this month, Tim Cook noted that the company was lowering its guidance, thanks in no small part to smartphone figures.

In its earlier report, the company put much of the blame at the feet of the Chinese market. There are a lot of factors on that front, including slowing economic growth in the world’s largest smartphone market, and a general trend toward prolonged upgrade cycles, as users are holding onto devices for longer.

Notably, those numbers are off-set somewhat by growth in other categories. The iPad grew 17 percent on the strength of new models, while Mac/Wearables and Home/Accessories each grew, at nine and 33 percent, respectively. Services, meanwhile, saw the biggest uptick at 19 percent to $10.9 — an all-time high for the category.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Cook said in a statement. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”

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Apple posts Q1 revenue decline with iPhone sales down 15 percent

Apple reported revenue of $84.3 billion with $4.22 in basic earnings per share, falling largely in line with Wall Street expectations of $84 billion with an EPS of $4.17. The company’s revenue shrank 5 percent year-over-year from $88.3 billion one year ago. Apple shares popped 2 percent after-hours.

While Apple’s revenue arrived closely in line with expectations, the number is a far cry from the guidance Apple offered in November. Earlier this month, Apple CEO Tim Cook issued a letter to investors, slashing Q1 guidance from a range of between $89 billion and $93 billion to $84 billion. Apple’s stock price cratered nearly 10 percent when Cook’s letter was released, a drop that represented the worst single-day plunge for the company in more than five years. Apple’s wild stock fluctuations have been a cause for a lot of uneasiness amongst the broader market.

Apple’s revenues in Greater China shrank nearly 27 percent to $13.2 billion compared to $18 billion in the quarter one year ago.

This is notably the first quarter that Apple has not included unit sales for its product lines including iPhone, iPad and Mac. iPhone revenues were down 15 percent year-over-year with $52 billion in revenue in Q1 2019 compared to $61.1 billion in Q1 2018. It wasn’t all bad news, the company saw gains across each of its other product divisions with Services up 19 percent, Mac up 9 percent, iPad up 17 percent, and the newly renamed “Wearables, Home and Accessories” vertical up 33 percent.

Last quarter, Apple’s iPhone revenue climbed 29 percent year-over-year while iPad revenue dropped 15 percent. Revenue for Mac climbed 3 percent, while Other Products revenue (Apple Watch, HomePod, AirPods, Beats) jumped 31 percent and Services saw 17 percent year-over-year gains.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Apple CEO Tim Cook said in a statement.

Developing

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Gmail on mobile gets a fresh coat of Material Design paint

Gmail on mobile will soon get a new look. Google today announced that its mobile email apps for iOS and Android are getting a redesign that is in line with the company’s recent Material Design updates to Gmail, Drive, Calendar and Docs and Site. Indeed, the new UI will look familiar to anybody who has ever used the Gmail web app, including that versions ability to select three different density styles. You’ll also see some new fonts and other visual tweaks. In terms of functionality, the mobile app is also getting a few new features that put it on par with the web version.

Like on the desktop, you can now choose between the default view, as well as a comfortable and compact style.  The default view features a generous amount of white space and the same attachment chips underneath the email preview as the web version. The comfortable view does away with those chips and the compact view removes a lot of the space between messages to show you more emails at a glance.

I’ve been testing the new app for a bit and quickly settled on the comfortable view since I never found the attachment chips all that useful in day-to-day use.

In line with Google’s Material Design guidelines, all the styles feature relatively subtle but welcome animations that don’t take a lot of time but give you a couple of extra visual cues about what’s going on as you work your way to Inbox Zero.

Google also notes that the new design makes it a bit easier to switch between accounts. I’m not sure I agree (I definitely find the implementation of this in Inbox, which is sadly going away soon, easier to use), but if you regularly use this feature, it’s still easy enough to use. The switcher is now part of the search bar, though, which is a bit confusing and took me a moment to find.

One nice addition to the mobile app is that the large red phishing and scam warning box from the web version now also appears in the mobile app.

Say goodbye to Inbox by Gmail

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Apple unveils new in-store sessions covering photography, Garage Band, health and more

Apple is launching 58 new Today at Apple sessions to beef up its in-store education offerings for people who want to explore Apple’s products. The sessions, which cover video, photography, accessibility, coding, music, health and more, are free to attend and available at all of Apple’s retail stores across the world.

For the unveiling, Apple brought a group of reporters to its Apple Park campus in Cupertino last week. Throughout the day, Apple took us through sample Today at Apple sessions across Apple’s three categories: Skills, Walks and Labs. Skills are quick, thirty-minute sessions designed to teach you new techniques, Walks are actual physical walks with certain Apple products and services and Labs are 90-minute sessions where you create a project.

“So I think of Skills, Walks, Labs almost as, you know, Spanish 1, Spanish 2, Spanish 3,” Apple SVP of Retail Angela Ahrendts told a group of reports at Apple’s spaceship campus last week. “I mean, most things have green diamond, blue diamond, red, black diamond, I mean, there’s always levels.”

When Today at Apple first launched, it was a bit more open. Now, it’s a lot more structured, Ahrendts said.

Beats, art and jump-cuts

First up, I participated in a Garage Band Skills session, where we learned how to quickly create a beat using the beat sequencer. This session is geared toward people who are new to Apple’s tech and may need an introduction to the product or the software.

That is designed to prepare you for the next level of sessions, Walks. At Apple’s campus, we did a photo walk using the iPad Pro with Pencil and digital illustration app Procreate. The task at hand was to walk around Apple’s spaceship campus, snap photos of colorful scenes, capture that color in Procreate and then use the app’s numerous drawing tools to create a portrait. Here’s my masterpiece.

Walks, Apple Senior Director Karl Heiselman said, has been the most popular type of session.

“We think the reason why they’re so popular is you can’t do them on the Internet,” he said.

Last, but not least, we did a Lab where we learned how to create jump-cuts in the Clips app.

All of these sessions are entirely free to attend. Since launching Today at Apple almost two years ago, Apple has hosted 18,000 sessions per week. Millions of people have attended the sessions, so far, but it’s hard to get a totally accurate number, Ahrendts said.

“If you sign up, we have a number but the minute the session starts around the big screen, usually three times more people, you know, kind of hover over it,” Ahrendts said.

Apple’s in-store sessions are a way for the company to build brand loyalty and differentiate itself from the likes of Google and other hardware companies. While Apple’s online store is geared toward purchasing products and receiving customer support, its retail stores are designed to be focused on people and their experiences, Ahrendts said.

“If you’re taking the time to come into a store, we’re assuming you want a much more human experience,” she said.

Today is the biggest launch of sessions to date, with Ahrendts likening the update to its in-store sessions to updates to Apple’s digital software, “but you could assume there will always continue to be updates on our store software forever.”

from Apple – TechCrunch https://tcrn.ch/2HEItg5

Report: Apple’s video streaming service to launch this spring

Apple’s new streaming service is poised to launch this spring, according to The Information, citing three unnamed sources. Tucked away in a report about Amazon’s plans to dial down its efforts with its subscription video offering, The Information noted that Apple has been telling entertainment partners to be ready for a mid-April launch for the streaming service. But the report also said the actual launch date could be within several weeks of that time frame.

A spring launch date would fall in line with earlier reports, which said Apple’s video streaming service would launch in the first half of 2019.

Apple CEO Tim Cook also vaguely confirmed its plans in this area, when speaking with CNBC earlier this month. He said that Apple would announce “material” new additions to its line of service offerings this year. These could include the upcoming news and magazine subscription service, which is also rumored for a spring arrival, and possibly new services in the health space.

Apple has been gearing up for its streaming service for some time, acquiring rights and making deals for a number of TV shows and movies — it even just brokered its first movie deal at Sundance 2019 on Monday.

However, Apple’s original content may not be the only thing to watch on the new service.

Apple may include an Amazon Channels-like offering as a part of its video service, the new report said. This, too, has been claimed previously by both Bloomberg and CNBC.

This Amazon Channels-like model has been copied throughout the competitive streaming market because of the low overhead and the big cut Amazon and Roku take on subscription sales — around 30 percent, The Information says.

For example, Roku this week launched its own video subscriptions in The Roku Channel; Sling TV rolled out a selection of premium à la carte channels last year; and media center software maker Plex aims to do the same in 2019. Walmart had been rumored to be entering this market via Vudu, its video marketplace that’s now its key focus for competing on streaming.

Even Facebook is considering an Amazon Channels-like offering, the report said.

Apple’s decision to move forward with a spring — or possibly, even mid-April — launch date would see its service going head-to-head with Disney+, the Disney-owned Netflix competitor that will be shown off to investors on April 11.

But what’s still unclear is how Apple will be marketing and selling its streaming offering — reports have varied on this front, claiming everything from a bundle with Apple Music and news to being entirely free.

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

The key number to look out for when Apple drops its Q1 earnings report later today

Apple, the company formerly known by its trillion-dollar market cap, will be reporting its holiday quarter Q1 2019 earnings today and it may just have the health of the global markets riding on how the financials look.

No pressure.

Earlier this month, Apple CEO Tim Cook issued a letter to investors, slashing Q1 guidance from a range of between $89 billion and $93 billion to just $84 billion. Given that the company revised its guidance just a few weeks ago, there isn’t much of a reason to expect a major revenue miss from the company though things could still go awfully wrong if the company is pessimistic in its Q2 outlook or misses elsewhere.

Apple lowers guidance on Q1 results, cites China trade tensions

Apple’s stock price cratered nearly 10 percent when Cook’s investor letter was released, a drop that represented the worst single day plunge for the company in more than five years. The stock has mostly recovered in the weeks since, but it is recovering from a 52-week low it reached earlier this month, a nearly 40 percent decline from its all-time-high in October.

Analysts are certainly going to be scouring the numbers today to get any sort of read into the health of the company’s mobile business moving forward, but they will have less data than ever to make these judgments off of.

During the company’s last investor call, Apple slid in an announcement that they would not be reporting unit sales in subsequent quarterly earnings reports, meaning that you won’t see any flashy “Apple sold XX.X iPhones this quarter” stories floating across your timeline. For the time being, revenue numbers are all we’re working with, though Apple contends that its financial success is growing less tightly correlated with unit sales, likely a result of the widening range of price points in its device categories and a general upward trend in these products’ average selling prices.

Apple will stop sharing numbers on how many devices it’s selling

Despite the unit sales shift, a lot of analysts will be staring long and hard at a single number this quarter anyway: Greater China revenue.

In Cook’s investor letter, he detailed that “economic weakness in some emerging markets” had “turned out to have a significantly greater impact than we had projected.” India and China have been two incredibly difficult markets for Apple to crack, while the company has definitely made healthy inroads with the iPhone in China, it seems growth is slowing there with Cook going as far to say that the bulk of the company’s guidance reduction was a result of iPhone revenue declines in Greater China.

Investors are going to be left having to judge whether revenue declines are a result of weariness surrounding ongoing U.S./China trade negotiations, a general slowing in China’s economic growth rate, or whether — perhaps most frightening to investors — Apple has just begun to lost its grip to Chinese consumer tech companies. It’s obviously most likely a combination, but you can expect Apple to point to external factors wherever possible.

Q1 2019 was also the first full quarter of sales for Apple’s three newest smartphone models, the iPhone XS, iPhone XS Max and iPhone XR, so we’ll likely get our best look at how the new models are faring and whether existing users are upgrading in developed markets. Cook seemed to hedge bets in his investment letter, noting that a number of macroeconomic trends and more dialed-in factors like consumers taking advantage of Apple’s $29 battery replacement program, impacted iPhone upgrades.

The iPhone’s ability to keep plugging along in its key markets is obviously going to be pretty critical for Apple. The headlines surrounding Apple’s transition to a services company has always been predicated by the fact that iPhone revenues were still climbing, it’s just that Services revenue was climbing even faster. If there prove to be some key heat sinks for Apple in its bread-and-butter hardware verticals, it’s apparent these trends would keep some downward pressure on the stock.

We’ll see how the Cupertino consumer tech giant does when it reports earnings after the bell today, check back here to see how Apple fares.

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