By Jason Snell
October 25, 2016 9:07 PM PT
On Tuesday Apple announced its quarterly results, and then its executives spent some quality time with analysts who tried to get Tim Cook to announce unreleased products. Tale as old as time.
Here are five quick takeaways in the form of annotated charts. Because who doesn’t love charts?
Fiscal 2016 was rough for Apple in terms of growth. It turns out that the runaway year-over-year growth of fiscal 2015, fueled primarily by the huge upgrade cycle kicked off by the release of the much larger-screened iPhone 6 and 6 Plus, just couldn’t be matched. And so Apple posted three straight quarters of year-over-year revenue drops.
But all the curves began to turn back upward this quarter, and Apple is projecting that the next fiscal quarter will show growth over the holiday quarter of calendar 2015. That was Apple’s biggest financial quarter ever, so… that means Apple is basically guaranteeing that next quarter will be its biggest ever. That’ll be something to see, and a nice way to break out of this annus horribilis.
As Apple faced tough year-over-year comparisons quarter after quarter, it sounded the rallying cry: “Look at how great our services are doing!” And it’s not wrong. This is the one component of Apple’s business to grow solidly over the last year. It’s now a $6 billion per quarter business, and still growing. The App Store is a big part of this, but Apple Music and iCloud are in there too. This quarter Services was Apple’s second largest revenue line at 13 percent of total revenue, making it bigger than the Mac (12 percent) and the iPad (9 percent).
I love my iPad, but it feels like we’ve spent the last three years hoping that iPad sales have hit rock bottom, and every time it’s turned out that there’s a little bit farther to fall. This quarter’s 9.3 million iPads sold is the lowest iPad sales figure in five years, since the third quarter of 2011. The good news is that the last three quarters have shown a marked flattening of iPad sales. So we may have actually hit rock bottom… or I could be fooling myself.
This isn’t to say that the iPad isn’t a viable product—it’s clearly a solid business, generating $5 billion in revenue every quarter. But is there growth potential here, or is it a product doomed to be loved by people like me and ignored by the rest of the market?
What a lost year for the Mac. The only notable new Mac in fiscal 2016 was the 4K iMac. There were minor updates to the 5K iMac and the MacBook, and… yeah. That was about it. Is it any wonder that Mac sales slipped, and slipped again, and continued to recede from the prior year’s sales figures as the year went on? That’s a chart of a product line that hasn’t been shown any real attention in a couple of years. And that’s the story of the Mac in 2016.
Maybe Thursday’s Apple event will start turning things around. I’d love to see positive Mac growth in fiscal 2017. As for 2016… it was more like what happens when you throw a party and nobody comes.
You know, if you’re an investor you care about growth. But let’s not lose sight of some other figures: Fiscal 2016 was Apple’s second most profitable year ever, as the company generated $45.7 billion in profits. Apple ended the fiscal year with $237.6 billion in cash. (Only $21 billion of that cash was in the United States, though—the other $216 billion is cooling its heels overseas, waiting for a tax holiday from the U.S. government.)
Still, this is the big point: There’s a lot of angst about Apple’s growth, and that makes sense from certain financial perspectives. If you’re an investor, you care. If you’re someone who is more concerned with the general health and well being of Apple, well: In a year where it received financial scrutiny the likes of which it hadn’t seen since the earliest days of the second Steve Jobs era, Apple had its second-best year ever, threw off nearly $46 billion in profit, and now sits on a $237.6 billion cash pile. Yeah… as bad years go, it was pretty okay.