Commentary

Apple Sales Fall, Expectations Rise, MacBook Pro Revives

Christmas — and new MacBooks — are coming in the nick of time for Apple, which yesterday revealed that it had a quarterly sales and profit decline for the first time in 15 years.

“It said that it had sold $215.6 billion worth of iPhones, Watches, Mac computers and other products in the year to 24 September. That works out as an 8% decrease on Apple’s record $233.7 billion of sales it collected in the previous year,” reportsThe Guardian’s Rupert Neate. Profits fell 14% to $45.7 billion.

“Some analysts are concerned that the world may have reached ‘peak Apple,’ meaning nearly everyone who wants (and can afford) an iPhone or other products already has one,” Neate writes.

But Apple has other narratives in the works to replace that headline in the coming days and months — starting with the one on top of its news release yesterday: “Services Revenue Grows 24% to All-Time Quarterly Record of $6.3 Billion.” Those would be the purchases made through Apple Music, iTunes and the App Store.

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Then, tomorrow, Apple will be revealing what many observers consider to be a long overdue upgrade to its MacBook Pro line of laptops, as well as some tweaks to other products. The event will be livestreamed starting at 10 a.m. Pacific.

And while sales for the period ending Sept. 24 were depressed, the new iPhone 7s were not released until just eight days before the quarter ended. In an earnings call transcribed by Seeking Alpha, Apple CEO Tim Cook said that response to the upgraded devices “has really been off the charts.” 

“He said there are waits for some models, particularly the high-end iPhone 7 Plus. Neil Cybart, an independent analyst who follows Apple, said there is an eight-week wait for some models,” reports Robert McMillan for the Wall Street Journal.

“Asked in an interview how Samsung’s problems influenced Apple’s outlook,” McMillan continues, “Cook said, ‘We’ve had a large number of Android switchers that are looking for better experiences. We want to offer anybody who would like to come over a great experience.’”

How’s that for a warm welcome? 

Still, Apple’s stock was down 2.8% in after-hours trading, “after rallying more than 20% over the past three months amid growing optimism about the iPhone 7 and Samsung’s travails,” McMillan points out. “Mad Money” host Jim Cramer thinks that’s coo-coo, CNBC’s Abigail Stevenson reports.

“To me, once again, the exceedingly profitable revenue stream is the one to watch, and it is still being relatively ignored, despite its 24% growth to $6.3 billion, and despite the naysayers' comments,” Cramer told his audience last night, repeating “his usual mantra to own Apple, don't trade it.”

For those who are just looking to own a spanking new MacBook Pro, a line that has grown longtoothed in an industry that likes to churn out promotable upgrades at least every couple of years or so, the purported image of the new MacBook Pro leaked on MacRumors yesterday. 

It’s not all that different from the models first released in 2012 — it’s thinner, of course — except for “an ever-changing keyboardstrip [that’s] supposed to be the MacBook Pro’s flashiest new feature. Instead of a skinny strip of keys dedicated to changing brightness, skipping music tracks, and controlling the volume (as all Macs have at the top of their keyboard), the new MacBook Pro is supposed to have a small touchscreen strip, which can be configured to show an array of different options” depending on what you’re doing, writes Jacob Kastrenakes for The Verge

“So if you’re in a Word document, you might see copy, paste and formatting options. If you’re in Photoshop, you might see brush adjustments.”

The “Hello Again” invitation to tomorrow’s event is “seemingly a subtle acknowledgement by the company that it is time to pay attention to the Mac again,” writes Edward C. Baig in USA Today, even as the iPhone and services have become the principle drivers of Apple Inc.’s growth. 

“While the Mac business contributes a far smaller piece to Apple’s bottom line, it remains a large and important one for the company, which used to be known as Apple Computer. But it's also a business under pressure, especially as Apple tries to attract and keep customers inside its ecosystem.”

Oh, did we forget to mention that it’s still the most profitable company in the world and is sitting on a huge cash reserve? That should help.

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