Apple Revenues Still Continue to Flatline

UPDATE 2: July 23

From Apple:

Share price (WSJ) –In after hours trading they ended up about 44c down (0.5%) at $94.28 Today in mid morning trade they are up by around 2.5% at $97.10 ish. We wonder when the magic $100 will be breached – probably before the end of next month!

 From elsewhere:

Instant analyst opinions/headlines:

Our view – Apple still not returning to growth but acquisitions and alliances to the fore

With their revenue guidance of $37 – $40 billion for the three months to September it looks as if revenues on a moving annual total basis will by & large continue to flatline for the 7th successive quarter starting way back in Q2 (March) of 2013. They will have been (billions) $169.1, $169.4, $170.9, $174.0, $176.1, $178.2 and $179.2 (using the mid point of their guidance of $38.5 for Q4 2014).

This period of consolidation has been accompanied by a complete lack of new product range announcements. The last one we would consider to have taken place was the iPad way back in 2010. Prior to this the iPhone first appeared in 2007 and the iPod way back in 2001.

Some think that in addition to new iPhone and TV product announcements this quarter perhaps the iWatch or iTime will be announced for this upcoming holiday season. Some say it could generate volume sales of 30 – 60 million per annum in the first year. We shall see.

What has happened in the last quarter of note is;

  • The acquisition of Beats
  • The announcement of the partnership with IBM in the enterprise market

In the conference call we noticed a few interesting comments re the Apple ecosystem and these developments from Tim Cook:

  1. “Beats provides Apple with a fantastic subscription music service, access to rare talent and a fast growing line up of products that we can build upon.”
  2. “In fact for the first nine months of this fiscal year, the line item that we call iTunes software and services has been the fastest growing part of our business. iTunes billings grew 25% year-over-year in the June quarter and reached an all-time quarterly high, thanks to the very strong results from the App Store. We’re continuing to invest in our incredible ecosystem, which is a huge asset for Apple and a very important differentiator of our customer experience.”
  3. “Yes, we didn’t talk about how the business model (IBM- Apple) is going to work. But generally speaking, I think that each of us have revenue streams in the enterprise and each of us went from having those revenue streams. So that’s how I look at that. And we win if we can drive that penetration number I spoke about from 20% to 60%. That would be incredibly exciting here. The walls would shake. And so that’s what I hope for.”

UPDATE 1: 9.45pm BST July 22

  1. Q3 Revenues / eps $37.43bn / $1.28
  2. Unit sales millions – iPhones 35.2 iPads 13.3 Macs 4.4 iPods 2.9
  3. Guidance Q4 Revenues / eps $37 -$40bn $1.20 (ish)
  4. Closing share price $94.72 Current price (WSJ) Initial after hours reaction down about 50c
  5. We have updated our graph & results schedule below.
  6. More tomorrow but looks like overall performance particularly Q4 guidance is a bit below market expectations.

Apple results, for their Q3 2014 (13 weeks ending June 28) should be released around 9.30 pm BST followed fairly rapidly by their Conference Call at 10pm BST (2pm PDT) which you can listen to live.The, sort of, headline figures to look out for we think are:

  • If their revenues are less than $39bn this quarter the growth rate will for the 5th consecutive quarter on a moving annual total basis show an increase of less than 2%!
  • Quarter 3 results consensus (Professionals/The Street) Revenues / Earnings per share – $38.0bn / $1.23
  • Quarter 4 mid guidance consensus Revenues / Earnings per share – $40.5bn / $1.34

Whilst no new product announcements will be made many think that a new larger iPhone in Q4 and possibly an   iWatch are on the cards but still no sign of an Apple TV.

Click to enlarge

The source of much of our information is Philip Elmer-Dewitt editor of Apple 2.0 to whom we, and likely many others are indebted. Our normal graphic uses his info for the Professionals and Amateurs figures and the mid guidance information from Apple. We also add our guesses. We’re going for a rounded and aggressively high set of results this time!

We will report back later after the results are released . Usually the Q & A session adds value. We shall see, or rather hear, if this continues to be the case and report back tomorrow.

Our header courtesy of Apple is from their Investor News page – impressive!

The Apple Brand Tells the Best Story

Aesop in association with One Poll have just released their 2014 Brand storytelling survey results in which they “… asked 2,000 consumers to identify brands against 9 key storytelling elements.”

They asked which of these brands:

  1. Do you consider to have a unique character/personality?
  2. Have a clear opinion?
  3. Has vision or purpose?
  4. Are you intrigued to know what they’ll do next?
  5. Tell a credible story?
  6. Create their own world?
  7. Produce content you want to share or talk about?
  8. Are entertaining?
  9. Are memorable?

We’ve done our usual extraction of our wide Tech sector brands and list the total top twenty one!

2014
2014
The Top Tech Twenty one 2013 Media Spend
Tech Overall Overall
1
1
APPLE
1
£30,773,833
2
7
VIRGIN MEDIA
14
£107,403,110
3
8
YOUTUBE
NE
4
12
SAMSUNG ELECTRONICS
22
£53,403,763
5
13
FACEBOOK
NE
6
23
SONY MOBILE COMMS.
36
£19,131,844
7
30
TWITTER
NE
8
34
TELEFONICA 02 UK
38
9
36
BT
26
£167,676,036
10
40
COMPARETHEMARKET.COM
35
11
48
EE
84
£53,513,262
12
53
CONFUSED.COM
34
£16,659,253
13
54
3
91
£37,483,801
14
57
VODAFONE
70
£87,288,722
15
68
TALKTALK
95
£97,368,864
16
69
HTC
96
£11,651,020
17
71
INSTAGRAM
NE
18
75
GOCOMPARE.COM
74
£32,306,571
19
82
BLACKBERRY
71
£17,948,305
20
92
WONGA.COM
89
£25,039,262
21
95
LINKEDIN
NE
NE – New entry
Source: Aesop, Brand storytelling survey 2014
Compilation: I.co.uk

Interestingly, to us, is the media spend info (we guess the blanks indicate the unavailability of information rather than a nil spend!

Surprisingly, to us, no appearance for Sky or Amazon. We recall incidentally that Sky also had well over £100 million in advertising spend.

Finally outside the tech sector we were interested to see the inclusion of the, now 4, main political parties (all are new entries) with UKIP leading the way in position 11 followed by Labour (72) Conservative (89) and Lib Dem (93) brands. We noted that none of them figured in the top 10 of the 5th element above but UKIP came in at # 2 on the 2nd element!

Survey download

The Internet of Somethings

A new consortium has been set up today:

It has been “ … FOUNDED BY LEADING TECHNOLOGY COMPANIES WITH THE GOAL OF DEFINING THE CONNECTIVITY REQUIREMENTS AND ENSURING INTEROPERABILITY OF THE BILLIONS OF DEVICES THAT WILL MAKE UP THE EMERGING INTERNET OF THINGS (IOT).”

The current members are:

  • Atmel
  • Broadcom
  • Dell
  • Intel
  • Samsung
  • Wind River

(We couldn’t help but notice that it shares its initials with amongst others The Organization of Islamic Cooperation and The Orkney Islands Council!)

Even we noticed names NOT present ranging from A through Z.

At least some of these are amongst the claimed 50 members of the competing AllSeen Alliance  who count the following majors amongst their number:

  • Cisco
  • HTC
  • LG
  • Microsoft
  • Panasonic
  • Qualcomm
  • Semantec

We wonder if a third consortium/alliance including the likes of Apple and Google may appear in due course – we have our doubts!

A Third of Most Valuable Global Brands are Techs

BrandZ part of the WPP group  have just published their consistently excellent  Top 100 Most Valuable Global Brands 2014” which is  commissioned by them and conducted by Millward Brown Optimor.

All you need and more is available from the BrandZ 100 site!

Now on to the results (our Technology categorisation is, as ever, our broad definition which adds 13 brands to the BrandZ category – mainly from their Telecoms and online only retailers sectors):

  • The top 4 overall most valuable brands are from the technology sector
  • 6 of the overall top 10 are from the technology sector
  • 11of the overall top 20 are from this tech sector
  • 32 of the 100 are from this tech sector
  • Of the Top 20 risers (the greatest value increases over 2013)  a staggering 9 are techs (Tencent + 97%,  Movistar +56%, Facebook +68%, BT +61%, Baidu +46%, Yahoo +44%, Amazon +41%,  Google +40%  and Siemens +36%.)
  • 3 of the 7 newcomers to the top 100 are techs Twitter at #71 {the highest new entrant) Linkedin at #78 and PayPal at #97

Click to enlarge

Nick Cooper, managing director of Millward Brown Optimor commented “Google has been hugely innovative in the last year with Google Glass, investments in artificial intelligence and a multitude of partnerships that see its Android operating system becoming embedded in other goods such as cars,”

Last year we thought Google might make #1 which has happened but our hoped for top 5 for Amazon just d out on a top 5 position.

Next year we reckon Google will stay there Apple & IBM could both move down the charts allowing some uplift for Amazon. Tencent will also likely make further huge strides.

We’ll leave you with their Top 100 countdown video.

The All New Mi Pad

Launched yesterday by Ziaomi  in Bejing, initially for the Chinese market is the intriguingly named Mi Pad. Its spec is alarmingly close to the Apple iPad mini (retina display 7.9” screen 4;3 form factor etc etc) but of course its android (their own version) and the entry price (16GB) is $240 ish (1,400 yuan) moving up to $275 (1,600 yuan) for 64GB.

As the third largest domestic supplier of smartphones Ziaomi are no slouch and cannot be ignored in their home market.

Whether or not they will roll out globally remains to be seen but they did hire Hugh Barra last year – Googles then VP of  Product Management for android and his joining comment was “ …  I’ll be joining the Xiaomi team in China to help them expand their incredible product portfolio and business globally — as Vice President, Xiaomi Global,”

The company, and the groups founder Lei Jun, have been likened to Apple and Steve Jobs but he prefers to differentiate the companies.

Recently Ziaomi bought the domain mi.com for a reported $3.6 million saying “The new domain is simpler and more accessible to an international audience,” This makes the domain purchase globally the highest priced one this year to date.

As a brand we rather like “mi” as it’s short and of course there’s the “i”!

We’ll leave you with their Mi Pad video

Amazon sales Greater than total UK internet sales in 2013

There has been recent comment following Internet Retailer’s look at the market indicating, inter alia, that  Wal-Mart’s online sales were growing faster than Amazon‘s.

Everything is relative of course and we would point out that the INCREASE in Amazon’s sales in 2013 was $11.4 billion which is greater than Wal-Mart’s TOTAL sales in 2013 of $10.3 billion. In fact only Apple at $18.3 billion were ahead of this increase!

In the top 10 (from a rather nice interactive graphic from the Wall Street Journal) we calculate that Amazon represented more than 50% of the $132 billion total.

Elsewhere it has been reported that Tesco is copying Amazon / Apple by setting up a, sort of, competing ecosystem with its HUDL tablet & soon to follow HUDL? smartphone.

We thought a very rough comparison of the GB internet annual sales with Amazon’s might again give us and you some overall perspective and conclude, from the ONS annual figures we collated from 2007, that allowing a billion or so $’s for Northern Ireland Amazon are still way ahead of the UK by about $10 billion!

FX rate: $1.696 = £1

Disclosure: We have Marketing Affiliate arrangements with Amazon

Both Tablet Growth, and PC Decline Slow, but Should Crossover This Year

The premier global provider of market intelligence in the technology sector IDC yesterday, came out with their tablet shipment estimate for the first quarter of 2014 which at 50.4 million units was a bit lower than the other two estimates released so far. It shows we reckon a 3.7% increase year on year although they calculate it at 3.9%!

The top 5 are predictable but we wonder if Amazon with their Kindle Fires could now get up to around the 2 million a quarter level outside the year end holiday festivus.

Digitimes are already forecasting quarter 2 to show growth of nearly 5% over Q1 reaching over 61 million units which would be the second highest quarter in history. Interestingly they estimate white box shipments to have been 20.4 million units (35% of their total) in Q1 and reckon this could rise to 23.3 million in Q2 which would be a Q on Q increase of 14.4% indicating that their growth continues to outstrip branded tablets.

Whilst our view that tablet shipments might outstrip PCs in the last quarter of 2013 failed to materialise we reckon it will now definitely happen this year!

Our header graphic relies entirely on IDC data.

Apple still not returning to growth

With Apple‘s revenue guidance of $36 – $38 billion for the three months to June it looks as if they, on a moving annual total basis, will by & large continue to flatline for the 6th successive quarter.

They will have been (billions):

  • $169.1
  • $169.4
  • $170.9
  • $174.0
  • $176.1 and
  • $177.8 (using the mid point of their guidance of $37.0 for Q3).

This period of consolidation has arguably been accompanied by a lack of new product range announcements. The last one we would consider to have taken place was the iPad way back in 2010. As Tim Cook was at pains to point out on Wednesday its been the fastest ever takeoff of any product range they ever introduced.

His words were:

“It absolutely has been the fastest growing product in Apple’s history, and it’s been the only product that we’ve ever made that was instantly a hit in three of our key markets, from consumer to business including the enterprise and education. And so, if you really look at it in just four years after we launched the very first iPad, we’ve sold over 210 million, which is more than we or I think anyone thought was possible at that period of time. It’s interesting to note that that’s almost twice as many iPhones that we’d sold in a comparable period of time, and over seven times as many iPods as we’d sold in the period of time. So, I think it’s important to kind of to put that in perspective. We’ve come a long way very, very quickly.”

Prior to this the iPhone first appeared in 2007 and the iPod way back in 2001

Tim Cook also at a more general level was definitely saying they’re “right” not first on the product range introduction side.

His actual words were:

“As you probably know from following us for a long time, we didn’t ship the first MP3 player, nor the first smartphone, nor the first tablet. In fact, there were tablets being shipped a decade or so before then, but arguably, we shipped the first successful modern tablet and the first successful modern smartphone and the first successful modern MP3 player. So it means much more to us to get it right than to be first.”

Some think Apple may have missed some opportunities. With pressure from the likes of Carl Icahn (who was happy with the results and accompaniments)  to increase the share price which has now cost over $130 billion. The less expensive action  of having their 7/1 share split, which might enable their inclusion in the exclsive Dow Jones Index of 30 companies is most welcome and we look forward to a share price of in excess of $100 in the near future!

We feel a more dramatic use of this $130 billion could have been undertaken either on the product development or acquisition fronts. Arguably, its main competitor, Google is more adventurous/experimental.

The next 12 to 18 months will we envisage see a new product line emerging likely on the wearables front.

We fear with the dropping of the “hobby” description of the Apple TV streaming device together with 20 million unit sales to date that the once vaunted REAL Apple TV may be ditched. This we think is possibly the most missed opportunity of the decade if not the first quarter of the century!

Apple revenues Flatline for 5th consecutive quarter

 

ROUNDUP am April 24

From Apple:

From elsewhere:

Instant analyst opinions/headlines:

 

Update (April 23) 9.45pm BST:

Revenues margins and hence EPS way above analysts estimates & Apple guidance – share price up 8% so far!

  • Q2 Revenues/EPS: $45.7bn/$11.62
  • Q2 Unit sales (millions) iPhones – 43.7 iPads – 16.4 Macs -
  • Dividend increase to $3.29
  • Buy back shares program increased by 50% to $90bn
  • 7 for 1 stock split planned
  • Q3 Guidance Revenues/Gross margin $36-$38 bn / 37% – 38%
  • Share price : Close $524.75 – After hours + 8% ish ie+ $43 Current

Updated schedule below.

We’ll do a roundup tomorrow am.

Apple results, for their Q2 2014 (13 weeks ending March 29) should be released around 9.30 pm BST followed fairly rapidly by their Conference Call at 10pm BST (2pm PDT) which you can listen to live.

The, sort of, headline figures to look out for we think are:

  • If their revenues are less than $43.6bn this quarter it will be the first year on year quarterly decrease we think since Q4 of 2002 – a distinct possibility but we’re sure they will try to avoid this! ( A return to growth is predicted, by many, from the next quarter onwards).  
  • Quarter 2 results consensus (Professionals/The Street) Revenues / Earnings per share – $43.5bn / $10.22
  • Quarter 3 mid guidance consensus Revenues / Earnings per share – $39bn / $8.50
  • Possibly an increased dividend from $3.05 to $3.35 per share

Click to enlarge

Whilst no new product announcements will be made many think that a new larger iPhone 6 and iWatch are on the horizon whilst we are still hopeful of a REAL Apple TV in the not too distant future!

The source of much of our information is Philip Elmer-Dewitt editor of Apple 2.0 to whom we, and likely many others are indebted.

Our normal graphic uses his info for the Professionals and Amateurs figures and the mid guidance information from Apple. We also add our guesses. We’re going for a rounded set of results this time!

We will report back later after the results are released and the Conference call has taken place. Usually the Q & A session adds value. We shall see, or rather hear, if this continues to be the case!

We’ll leave you with the latest iPhone 5s add showing you how powerful it really is!

Streaming’s on fire

Amazon yesterday announced the launch of their set top TV box amazon fire TV.

Whilst it can be bought for $99 now in the US unfortunately UK availability is yet to be confirmed and, based on their previous hardware releases (particularly kindle Fire tablets), it may be a while coming.

As ever it does have a virtually unique facility, “voice search” which, if their video is anything to go by, is their USP. As Jeff Bezos says “The old way of searching with a TV remote—scrolling and clicking one letter at a time on an alphabet grid—is painful. With Fire TV you simply speak the title, actor, or genre into the remote and you’re done.”

There is also a game controller available (at an extra $39.99) which could well open up the games market for them although “the controller” has had few, if any, positive reviews from gamers!

.

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The box itself is small 4.5 inches square and 0.7in deep.

Click to enlarge

Aimed at both Google’s Chromecast and other set top boxes from the likes of Apple & Roku it is a welcome addition over there! We look forward to a UK introduction hopefully later this year

Here’s amazons impressive promotional video. We also like the popcorn!

Disclosure: We have marketing affiliate arrangements with Amazon