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Apple Bores the Street
Apple’s quarterly financial results were basically boring for those Wall Street analysts. Yeah, what is exciting about $52.9 billion in sales and $2.10 earnings per share? The street expected another couple hundred million in sales but were pleasantly surprised by the extra $0.08 per share in profit.
Apple shipped 50.8 million iPhones which was down slightly from last year’s 51.2 million but if you take the first two quarters together, Apple shipped 129 million iPhones which is 0.79 million more than expected for the 6 months. Also Apple reduced channel inventory by quite a bit and that does not show up in the iPhone sales numbers (it was already accounted for). That is an enormous number of iPhones. All these rumors about the iPhone 8 certainly have cut into sales. No one wants last year’s phone if they think the new one will have better features.
Apple’s services business continues to grow and is a huge business on its own. With 18% growth year over year driven by the App tore. With services income at around $7 billion this sector alone is the size of some Fortune 500 companies. The other products category which includes things like Beats, Apple Watch and AirPods saw explosive growth with 31% increase year over year.
iPad sales continued to decline which is a common trend for tablet sales, however Apple did manage to sell 8.9 million iPads which represents about 83% of the whole tablet market for tablets over $200. The Mac business saw year over year growth with sales of 4.2 million Macs and an increase in the average sales price of Macs driven by the new MacBook Pros. It was good to hear Tim Cook say that Apple is “investing aggressively in its future”.
Of interest to shareholders and a good indication of the health of Apple, Apple increased its share repurchase authorization by $50 billion and declared about a 10% increase in the dividend paid to shareholders. Taken together Apple has returned over $211 billion to shareholders.
Apple’s guidance for the next quarter was pretty tepid. It is normally the slowest quarter of the year so Apple is projecting sales of $43.5 billion to $45.5 billion. This is a pretty good indication that new products like the iPhone 8 will probably fall into the later part of the year.
While Wall Street yawned a bit about the results, but I am much more bullish. Apple is seeing double digit growth in sectors that provide around a third of their revenue and that is not iPhone. Apple is spending a lot of money on R&D with spending in this quarter increased to $2.8 billion and around $5.7 billion for the first six months of the year. Apple’s product pipeline is at least well-funded and I can’t wait to see what’s next.
_Dear Friends,_
It is time for my annual migration. I will be heading up I-95 this weekend and back to the Green Mountains by early next week. I wonder how my, now very big, Olde English Bulldogge, Jezebel will do on the long journey. She is about to become a country dog and that should be interesting to watch.
Apple’s quarterly financials come out this week and while the quarter results were a mixed bag, if you take the first two quarters together Apple’s results are phenomenal. Any way you look at it Apple has not one business but several led by iPhone but including a growing services business, a Mac and iPad business and don’t forget that “other” category which includes Apple Watch, Beats and AirPods which is also showing growth. We will get into the numbers but overall, a good quarter and good half year for Apple!
Tim Cook also announced that Apple has created a $1 billion fund to help finance advanced manufacturing jobs in the USA. Even though Apple has over $256 billion in the bank, most of it is overseas and Apple has to borrow money domestically to fund operations so they will be borrowing to set up this fund.
This week’s “**Kibbles & Bytes exclusive**”:http://www.smalldog.com/wag900002673/kibbles-bytes-exclusive-bundle? features the iPad Pro 9.7-inch in Space Gray with 128GB storage and Wi-Fi and cellular connections. This week we are bundling this iPad with the Apple Pencil, the Apple keyboard case and AppleCare+ for iPad. This is a complete bundle for anyone that is looking for a powerful iPad Pro and would make an awesome graduation gift for someone special. This special bundle is available exclusively to Kibbles & Bytes readers for the special price of only “**$1089.99**”:http://www.smalldog.com/wag900002673/kibbles-bytes-exclusive-bundle? while supplies last.
As you know by now I am a Boston Celtics fan and there have been many Boston Celtics heroes over the years. But Isiah Thomas has got to be one of the most amazing and inspiring of the bunch. I am really enjoying watching the Celtics in the playoffs and who knows, if they can keep up the good work maybe I will find my way to see an Eastern Conference final game.
Speaking of Boston, I am really proud to report that my granddaughter, Khadija, will be attending Boston University in the fall. She accepted admission when she was visiting here last week. She will be studying theater and education. It seems hard to believe that way back 18 years ago when I announced here in Kibbles that Khadija was born with my “just call me gramps” headline.
Grace and I are heading back north this weekend with our pups and as little gear as we can manage in our Chevy Volt. It will be good to back in the Green Mountains!
Thank you for reading this issue of Kibbles & Bytes!
Your Kibbles & Bytes Team,
_Don, Emily & Hadley_
Beware of Counterfeit Cables!
Earlier this week I had a customer asking me about an inexpensive cable for their Mac. Their current charging cable had finally stopped worked and they were looking for a replacement. I honestly can’t tell you how many times over the years I have had to answer the question about what other option besides the Apple branded charging cable for their Mac, iPhone or iPad. The short answer is there are very few. When it comes to your MagSafe charger the answer is pretty straight forward. You absolutely want to buy the Apple charger. If your shopping on the internet or walk into a store and find a killer deal on a charger it’s very likely it’s a knock off and there are legitimate dangers with these too-good-to-be-true chargers.
I’ve seen in our service department over the years a handful of Apple lookalike MagSafe chargers. It’s usually a minor detail in the manufacturing that tips us off it’s not authentic. The real problem with these chargers and iOS chargers is the risk of fire. Eventually many of us will end up with cables that need replacing. With both your computer’s MagSafe and your iOS charging cable a common failure is the wires becoming frayed and exposed. Once the wires become exposed you do want to replace them rather than trying to repair or just cover them with electrical tape. The electrical tape trick can work for a little bit, but you’re still at risk for a short and in extreme cases you can end up damaging your charging port or even worse cause the device to catch fire.
When you are looking to replace your cables, there are alternatives besides the Apple Lightning or 30pin charger, but you want to make sure you can “identify a counterfeit or uncertified cable”:https://support.apple.com/en-us/HT204566 before making the purchase. Another tip for purchasing a non-Apple cable for your iOS device is to stick with a manufacturer you have heard of like Belkin or Griffin.
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Lastly you can do a few things to try and extend the life of your cables as long as you can. Proper cable management is often not discussed. Some of us prefer to keep cables neat and tidy, others just throw them in a drawer and when we find a place to plug them in just make sure the device can reach the port. It’s very important to make sure that you don’t wrap your cables too tight and force tension right at the connector. I’m forever reminding my kids not to use their devices while charging in a manner that the wire right at the lighting cable is bent at a 90 degree angle. This will surely cause the cable to bend and fray in no time. It’s also important to disconnect the cable by grabbing it right at the plug verses just grabbing it from any old spot and tugging.
Follow these quick tips and steps and you’ll be sure to continue safely charging your devices. Our charging cables go through a lot in a lifetime and they are ultimately fragile accessories.