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by Jason Snell & Dan Moren

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By Jason Snell

A few notes on Apple’s latest record quarter

So, another record fiscal quarter for Apple. Are we surprised? Not really, I suppose, though it’s interesting to remember that last year’s holiday quarter was actually smaller than the previous year’s, which set the record. 2019 is now the champ, with $91.8 billion in revenue. Yikes.

Anyway, here are a few quick observations about this quarter’s Best Quarter Ever.

The iPhone 11 is the core iPhone

If you were wondering about Apple’s strategy to make the successor to the iPhone XR the “real” iPhone 11, and rebranding the iPhone X successors as pro models, wonder no more. According to Apple, the iPhone 11 outsold the iPhone 11 Pro and 11 Pro Max every single week of the holiday quarter.

That said, I’d assume that the two pro models put together outsold the iPhone 11. But it’s clear that the iPhone 11 has been a success, and it’s only right.

Also, let’s give a clap to the iPhone, which returned to year-over-year revenue growth for the first time in a year. Apple says that its trade-in programs have worked wonders, including in China. and also suggests that the (U.S. only) Apple Card installment plan also has helped contribute to iPhone sales.

The iPhone is never going to be the growth engine it was during the middle of the last decade, but it’s still an enormous contributor of revenue and profit to Apple, and I suspect its sales will ebb and flow as new models come and go. There are worse things for a company to have than a boring product that just keeps dumping $146 billion a year into the coffers.

iPhone revenue chart

Wearables are big—and interesting

Apple’s wearables business is clearly successful and growing rapidly, as expressed in the Wearable/Home/Accessories category’s rapid growth. It was $10 billion in revenue for that category this quarter, up 37 percent from the year-ago quarter and marking 12 straight quarters of 20+% growth.

Apple provided a few fun tidbits in its description of what’s going on inside the Wearable/Home/Accessories bundle. Apple Watch set a new revenue record, though Apple won’t say what that record is. Perhaps more interesting even than that, the company claimed that 75 percent of Apple Watch purchases were from people who were new to the product.

Wearables revenue chart

On the phone call with analysts and executives Tuesday, Mike Olson of Piper Sandler 1 asked Cook about how many of those watch buyers were really new to Apple overall. Cook’s response was that “it’s more likely that the iPhone comes first,” which is probably true—first you get an iPhone, then you branch out into the Watch. (Keep in mind, you can’t really use an Apple Watch without an iPhone.) And there are so many iPhone users out there that Apple could keep adding 75 percent new Watch owners every quarter for quite a while without running out of potential sales targets.

But Cook did say, “There’s no doubt in my mind that there’s some people that came into the ecosystem for the Watch,” and I can see that point too. With Apple having the pre-eminent smartwatch out there, Apple probably benefits from a surprising halo effect: Someone who might not care whether their phone is iPhone or Android might buy an iPhone just because they want to get an Apple Watch.

Apple Watch sales aren’t all about the Series 5, either. Cook said that Apple couldn’t make enough of the $199/$299 Apple Watch Series 3. That’s a fascinating tidbit, because it suggests that—like the iPhone SE before it—Apple underestimated the amount of demand that its customers might have for a lower-priced, entry-level product. At $199, the Apple Watch Series 3 is priced similarly to a bunch of other fitness trackers—and it seems to have found some traction there.

Then there’s the AirPods and AirPods Pro, which also achieved record revenues. According to Cook, Apple couldn’t make enough AirPods Pro to meet demand—and that’s still the case, and the company doesn’t know when it will be able to. That’s the sign of a hit product (or enormous production problems, but I’ll guess the latter).

The arrow points up

If you’re not an investor or Wall Street analyst you might have missed perhaps the most important news Apple broke on Tuesday. It’s not about the 2019 calendar holiday quarter, it’s about the second fiscal quarter of 2020, the one we’re living in right now. Every quarter, Apple supplies guidance about how it thinks it will perform in the next quarter. On Tuesday it said it would generate between $63 and $67 billion, a wide spread that it said was due in part to some uncertainty about what will happen with the spread of the Coronavirus in Wuhan, China.

That’s great news for Wall Street. Not only did Apple beat its own guidance for this quarter, but it’s now projecting another quarter of year-over-year growth. The fiscal second quarter of 2019 was a $58 billion quarter, so Apple’s predicting growth of between 8 and 16 percent. Until this latest quarter, Apple’s year-over-year revenue growth had been pretty static for a year, measuring between a 5 percent drop and a 2 percent rise. This guidance suggests that Apple will follow up this quarter’s 9% growth with a figure that’s similar, with quite a bit of possible upside.

It’s a good sign that Apple is confident about the direction its business is going in.

What’s up with the Mac and the iPad?

Mac and iPad sales were down. The Mac was down 3% and the iPad was down 11%. A little scary, but Apple put a positive spin on it, mostly saying that this quarter was a “tough compare” to the year-ago quarter, because the product mix was very different.

“Both products had a difficult year-over-year comparison due to the launches of MacBook Air, Mac Mini, and iPad Pro during the December quarter a year ago,” Maestri said. And he’s got a point. There was no major iPad release this year during that period, and that definitely made this year’s holiday quarter pale in comparison to last year’s.

I do think it’s interesting that Apple pointed to the “tough compare” argument for the Mac, though. A new 16-inch MacBook Pro presumably had some impact on sales, though the Mac Pro wouldn’t have—not only did it ship at the very end of the quarter, but it’s not the kind of high-volume product that has a heavy impact on the bottom line. There was a lot of pent-up demand for the MacBook Pro, sure, but a lot of people are probably waiting and hoping for a revision to the smaller MacBook Pro model, and there was an enormous amount of pent-up demand for the MacBook Air last year.

We’ll see whether the Mac and the iPad can turn it around when we check back in on Apple’s financial results in three months. Set your calendar alarms for April 28.


  1. Oh no, did Adam Sandler kill Mr. Jaffray and steal his power? ↩


By Jason Snell

This is Tim: Apple Q1 2020 analyst call transcript

Here’s a complete transcript of Apple’s conference call with financial analysts, held Tuesday, January 28, 2020.

Tim Cook: Good afternoon and thanks to all of you for joining us. We’re thrilled to report Apple’s biggest quarter ever, which set new all-time records in both revenue and earnings. We generated revenue of 91.8 billion dollars, which is above the high end of our guidance range, with revenue growth accelerating for the third consecutive quarter. Geographically, we set all-time records in the Americas, Europe and rest of Asia Pacific, and saw Greater China return to growth.

Continue Reading "This is Tim: Apple Q1 2020 analyst call transcript"


By Jason Snell

Apple reports a record $91.8 billion holiday quarter

Apple announced that its calendar 2019 holiday quarter (the first quarter of its fiscal 2020) was its all-time best in terms of revenue, with a total of $91.8 billion, with a $22.2 billion profit. The company beat its estimates for the quarter, and in news that will cheer Wall Street, estimated that it will generate between $63 and $67 billion in revenue next quarter, a sign of further growth to come.

Continue Reading "Apple reports a record $91.8 billion holiday quarter"


By Jason Snell

The iPad era turns 10

Moments before the presentation started.

It’s the tenth anniversary of the iPad’s announcement. Here are some links for your enjoyment:


Podcast

Upgrade #282: The iPad at 10

It’s the 10th anniversary of the announcement of the iPad! Myke and Jason discuss why the seeds of the iPad’s success were visible on day one, the changes in the iPad’s life cycle over time, and how the iPad fits in our daily lives today.

Episode linkMP3 (1 hour, 39 minutes)


By Jason Snell

Fun With Charts: Apple’s turnaround decade

Last week I followed a thread from my chart about the growth of Apple’s Services and Wearables categories and ended up marveling at the spectacular growth Apple experienced during the 2010s.

Which got me thinking about decades. Because while it’s true that Apple’s total revenue grew sixfold in the 2010s, this was a decade that followed an even more remarkable decade, where Apple went from losing money 1 to making it hand over fist.

So here’s last week’s chart, spanning 2009 to 2019:

A decade of Apple revenue.

Pretty good decade, all things considered. But here’s the same chart for 1999 to 2009:

Apple revenue 1999-2009

The rocket really didn’t achieve liftoff until 2004, as iPod sales went wild and the Mac benefited from the halo effect. And then, of course, the iPhone began substantially contributing in 2008 and 2009. Still, measured from 1999 to 2009, Apple’s total revenue grew sevenfold, more growth even than between 2009 and 2019.

Rolling it together, here’s a two-decade view of Apple total revenue:

Apple revenue 1999-2019

As fun as it is to break things up by even decades, Apple’s biggest growth decade was actually 2006 through 2015. 2015’s total revenue of $234 billion was twelve times the $19 billion in revenue Apple generated ten years before.

On the scale of this chart, the rise of revenue in the previous decade comes off as almost flat—because while it was impressive in the context of Apple’s business at the time, it can’t take into account the rapid inflationary period between 2011 and 2015 that took Apple from a $65 billion business to a $234 billion one.

The past five years have been relatively flat for Apple, though I’ll point out that the $26 billion growth in revenue between 2015 and 2019 would’ve been the size of Apple’s entire business the year the iPhone came out. You can see why growth-focused investors aren’t as happy with Apple today as they were with Apple in 2015.

On to the next decade: Apple’s financial results for its fiscal first quarter of 2020 will be released on Tuesday.


  1. Apple lost money as recently as its first fiscal quarter of 2003! The holiday quarter! Can you imagine? ↩


Dan Moren for Macworld

4 places where Apple can improve its integration of hardware, software, and services ↦

Apple spends a lot of time talking up its secret sauce: that combination of hardware, software, and services that allow it to make what it believes are the best technology products on the planet.

And, as users of Apple products, most of us probably agree that this is generally the case. But even as good as the integration between these three legs of the company’s stool is, there are still some places that it falls weirdly short. Hardware and software that don’t work together, services that don’t provide the necessary glue.

Maybe they’re use cases that Apple doesn’t consider particularly necessary, or maybe the company just hasn’t gotten around to them yet. Whatever the case, they stick out like a sore thumb. Here are just a few examples of integration that’s, well, less than integrated.

Continue reading on Macworld ↦


Linked by Jason Snell

Federico Viticci’s must-have apps

You will probably not find a better list of amazing iPad and iPhone apps than Federico Viticci’s expansive list over at MacStories:

This entire story features a collection of the 50 apps I consider my must-haves on the iPhone and iPad, organized in seven categories; whenever possible, I included links to original reviews and past coverage on MacStories. As for the traditional list of awards for best new app and best app update: those are now part of our annual MacStories Selects awards, which we published last December and you can find here.

I was happy to realize that I’m using a lot of these apps myself, but there’s always that app you’ve never heard of, or never noticed, that you realize might perfectly solve a problem you’ve got.


Podcast

The Rebound 273: You Talking to Me?

This week, on the irreverent tech show that sometimes goes international, it’s nearly all-encryption all the time as Guy explains the ins and outs of bits and bytes to John and Dan. Then it’s on to the newest iPhone rumors until we’re blue in the face (get it?). Finally, is the kerfuffle over Sonos really that big of a problem?

Episode linkMP3 (43 minutes)


Jason Snell for Macworld

iPad at 10: Why apps made the iPad a success ↦

It’s hard to believe that January 27 marks the tenth anniversary of the announcement of the iPad. As impressive as that first iPad was in terms of hardware, a decade later it’s clear that the iPad succeeded because of Apple’s focus on native iPad apps from the very first day.

Continue reading on Macworld ↦


Podcast

Clockwise #330: I Call That the Airplane Squirrel

This week, on the tech podcast that’s having the time of its life, Dan and Mikah are joined by special guests Jason Howell and Kelly Guimont to discuss digital wellbeing apps and features, movies and TV shows we thought would accurately predict the future, our encryption habits, and our “analog” hobbies. Plus, our first jobs!

Episode linkMP3 (28 minutes)


Podcast

Upgrade #281: Your Historical Knowledge Has Been Noted

We close the book on the 2010s with a special draft of Apple keynotes and media events from the past decade, joined by special guest Stephen Hackett. And in Upstream news, it’s a busy season of announcements for both Apple TV+ and Peacock.

Episode linkMP3 (1 hour, 39 minutes)


Jason Snell for Tom's Guide

Why the time is right for an iPhone SE 2 ↦

The rumors are getting louder all the time — Apple is apparently getting close to launching the iPhone SE 2, the successor to 2016’s compact iPhone that turned out to be an unexpectedly popular product.

We have some of what we think are the details of this new iPhone, thanks to analyst reports about Apple’s 2020 phone release plans. But to get a better understanding of what this new iPhone SE will really be, it’s worth considering Apple’s track record — and what niche it plans for the new phone to fill.

Continue reading on Tom's Guide ↦


By Jason Snell

Clever, Powerful, Useful: Time to upgrade the Mac’s energy settings

Back in the olden days of the early 1990s, the Mac’s built-in power-management software was not great. Third-party apps filled the gap, the most impressive of which was Connectix PowerBook Utilities (CPU). As Adam Engst wrote 28 years ago(!):

CPU’s most important features are its power saving features, and these abound. First, you can easily configure the times to spin down the hard drive, rest the processor, dim the backlighting, and put the PowerBook to sleep. Second, you can activate any of these power-saving measures with a hot-key, so I often shut down the hard drive when it wasn’t doing anything because I enjoy working on a silent PowerBook… Finally, Connectix recognized that you use the PowerBook in different places, so you can create sets of settings.

cpu-computinghistory
(Centre for Computing History)

A lot of these features ended up in Mac OS, as they rightly should have, and CPU faded into oblivion. But I’ve been thinking about CPU a lot this week, after the 9to5Mac report that a “Pro Mode” may be coming to a future version of macOS. It seems to be a new setting that would decrease laptop battery life and increase fan noise in order to perform processor-intensive operations.

Fair enough. But as Marco Arment and Chance Miller pointed out last week, this feature seems to have missed the bigger opportunity on the other side of the coin: an iOS-style “Low-Power Mode” that would let MacBook users eke out longer battery life by tweaking settings, including disabling Turbo Boost on processors. A utility, Turbo Boost Switcher by Rugar Ciap (free; the pro version is $9), does this job—but throws up a warning suggesting that it might not be allowed to work with the next major version of macOS.

I’m all for the idea of a low-power mode for Macs 1, and it’s a bit perplexing to see Apple prioritize turning off all battery-saving features and cranking the fans over letting users maximize battery life.

I do have a wacky idea, though. (You knew I would.) What if Apple used the introduction of Pro Mode to adjust the default performance settings of macOS laptops? Yes, raw benchmark scores would drop, but in exchange Apple could make more expansive battery-life claims. Users who demand the best performance from their pro laptops could enable Pro Mode, which would drain that battery quickly, but in general use the laptops would run cooler and quieter and last longer. What if the way Marco uses his MacBook Pro—with Turbo Bost Switcher turned on—were the default for everyone?

Of course, a better idea would be to provide users with more granular power-management controls, perhaps even with location-aware presets like Connectix PowerBook Utilities offered in the early 90s. I know that Apple’s tendency is to prevent users from fiddling with their computers’ settings in detail, but let’s be honest—the Energy Saver system preference pane is already an enormous collection of sliders and checkboxes. Adding a few more wouldn’t hurt anyone.

It’s not like this isn’t already a complex spot.

While we’re at it, can we finally add a Low Data Mode to macOS as well? For years I’ve extolled the virtues of TripMode, an $8 utility that lets you control what Mac apps have access to the Internet if you’re using a slow or metered connection. That’s a feature that should just be built into macOS, though perhaps not with the level of granularity that TripMode offers. (It’s a classic Mac approach to build a new feature with a very simple set of user options, and then allow third parties to offer more complex interfaces on top of that same feature for the users who really care—so the introduction of a Low Data Mode need not be the end of powerful apps like TripMode.)

Offering macOS apps better control over data usage would also perhaps open the door for cellular-equipped Mac laptops a bit wider. I’ve been using a cellular iPad Pro for the last few years, and I would never go back. The convenience of not having to tether to a phone or worry about the quality of the local Wi-Fi is worth the extra cost, and it’s a shame that MacBook users don’t have the chance to make that choice.


  1. I’d like one for iPads, too. ↩


Dan Moren for Macworld

Acquiring minds want to know: a peek inside Apple’s most recent corporate acquisitions ↦

If you’ve heard it once, you’ve heard it dozens of times: “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

When it comes to its corporate acquisitions, Cupertino likes to play its cards very close to its chest. Of course, that doesn’t stop industry watchers from peering at the tea leaves to see if they can divine exactly what the company might be working on.

And, hey, I’m no different than those folks, because Apple does so little to telegraph its plans that even a boilerplate statement confirming an acquisition is a rare peek behind the curtain. Apple CEO Tim Cook said not long ago that the company makes an acquisition every two to three weeks, and not even all of those make it into the public eye. So let’s take a look at the firms that we do know Apple has acquired recently and see what we can glean.

Continue reading on Macworld ↦


By Jason Snell

Fun With Charts: A decade of Apple growth

I wrote a throwaway line in last week’s set of charts about just how the Apple of 2020 is not the Apple of 2010 just as the Apple of 2010 was not the Apple of 2000. I deleted the reference because I thought the thought deserved its own chart and its own article, which is this one.

Here’s the chart: This is total Apple revenue for each fiscal year (shifted a quarter from the real calendar—on January 28 we’ll hear the results of Apple’s fiscal first quarter of 2020) since 2009.

A decade of Apple revenue.

Apple left the previous decade 1 as a company that was generating 43 billion dollars in revenue every fiscal year. It exited the 2010s generating 260 billion. Or to put it another way, The Apple of January 2020 is roughly six times the size of the Apple of January 2010.

I have been making charts based on Apple’s financials every three months for most of the last decade, and if there’s one thing that I think the charts don’t properly convey, it’s just how explosive Apple’s growth has been. The iPhone’s growth in the middle of the decade changed the game. And while that growth has slowed or stopped, it leaves Apple as a company that is working at a scale that’s nothing like it was when Steve Jobs was in his final years as CEO.

Let’s break that growth down by product line.

iPhone sales figures

Apple’s iPhone growth essentially parallels its overall growth. The iPhone is the engine that drove Apple’s growth in the 2010s, peaking at $165 billion in revenue in 2018. In 2011, Apple made more money on the iPhone than the entire company had earned just two years earlier. When you can increase your revenue in a product category by an order of magnitude in a decade, you’ve had a really good decade.

This is not to say that Apple’s other product lines didn’t have success in the decade.

iPad sales figures

Yes, the iPad peaked early, with three $30 billion years from 2012 to 2014. But it’s settled in as a $20 billion/year business, which is pretty good—and keep in mind, the iPad didn’t exist until the spring of 2010.

The Mac’s story in the 2010s is less dramatic:

Mac sales figures

The decade was clearly a success for the Mac, but it was an incremental success. The Mac business didn’t quite double between 2009 and 2019, but it came close. The first decade of this century was one of enormous growth for the Mac, but this one was still pretty good, if not spectacular.


  1. If you want to argue that the decade of the 2020s does not include 2020 but does include 2030, take your coat and go. That breed of pedantry’s not welcome in this establishment. ↩

Continue Reading "Fun With Charts: A decade of Apple growth"


Podcast

The Rebound 272: I Want Every Possible Option

This week, on the irreverent podcast that’s fully powered up for 2020, John’s got a bigger phone…sort of. Plus, Lex has some thoughts on notifications, Dan is still frustrated by browser changes, and everybody’s got their fill of euphemisms.

Episode linkMP3 (34 minutes)


Podcast

Clockwise #329: Forgetting as a Service

This week, on the 30-minute tech show whose longevity is no puzzle, Dan and Mikah are joined by special guests Lisa Schmeiser and Casey Liss to discuss our best security practices, the services we’d still like to see from tech companies, our thoughts on Twitter’s new experimental reply system, and the last apps we fell in love with. Plus a brain-teasing bonus topic!

Episode linkMP3 (29 minutes)


Jason Snell for Macworld

It’s time for new hardware at the center of Apple’s home strategy ↦

Tech companies are still investing huge amounts of time and energy in smart-home products, as the recent Consumer Electronics Show displayed. A year ago, Apple hired a new head of home products—but it hasn’t yet resulted in a lot of visible changes to Apple’s strategy.

The biggest move so far is Apple’s joining forces with its competitors to form an alliance to encourage smart-home interoperability. That’s a good start, and I’m hopeful that Apple can begin to push HomeKit forward in 2020.

Last year, I suggested that Apple make a new version of the Apple TV and HomePod that works as a TV soundbar. I’d still like to see that product. But now, for 2020, here’s another hardware suggestion: Apple can contribute to the smart-home industry and its own bottom line by doing what it does best, namely creating a new product that’s a fusion of hardware, software, and cloud services. It’s time for Apple to build a product that makes your home smarter and more secure. It’s time for Apple Home.

Continue reading on Macworld ↦


Podcast

Upgrade #280: De Niro Can’t Bend

With Myke reporting live from Hollywood, we discuss Netflix’s record Oscar nominations, and Apple’s first TV award and TV critic press tour. Jason makes a chart that explains why Apple execs can’t stop talking about Services and Wearables. Then we both give updates on our home-office upgrades, Jason abandons his solar dream, and Myke turns to mechanical keyboards for solace.

Episode linkMP3 (1 hour, 33 minutes)