The most recent financials stunned Wall Street with yet another record 2nd quarter. Barely. Even worse than that, the iPhone maker’s biggest product is no longer even half of the company’s growing revenue story. Apple’s one trick pony revenue stream is full of weak links.
Allow me to step up to the microphone and announce what everybody else is afraid to publish. Apple is a hardware company. Yes, money rolls into the company’s coffers via Services, but that leg on the chair has always been around. It’s just a bigger chair these days.
So, how is it that a hardware company has weak links that are, well, uh, um– made of hardware?
CEO Tim Cook set the stage for disappointment.
This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends
All time record revenue? Meh. Hey, how many iPhones did you sell, Tim? Inquiring minds want to know. Also, critics and competitors.
Apple has so much money coming it that it needed to build Apple Park just to hold it all. You thought it was parking underneath the space ship campus? Hah! Bank vaults. Lots of cash.
What is Apple doing with all that money?
We returned over $21 billion to shareholders during the quarter, including $17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents.
Those are steps that make no sense to me but I don’t get paid to make sense. I get paid to find the fly in the ointment. The possum’s on the stump, folks. All those nattering nabobs of negativism are just lower than a snake’s belly in a wagon rut.
All those APPL watchers have been busier than a cat covering crap on a marble floor trying to clean up their messy predictions about Apple’s impending demise. Those anti-Apple members of the technorati elite politburo are too poor to paint an accurate picture of what is going on at Apple and too proud to whitewash the facts.
Apple is doing fine because two of the company’s most stalwart pieces of hardware– the Mac and iPad lines– are growing and still they are overshadowed in growth by a new hardware line that came out, of, well, the shadows.
Here’s the facts direct from Apple.
iPhone remains the company’s not-as-big-as-it-was cash cow; $26-billion in revenue but a mere 48-percent of the company’s overall take. What’s next? Mac? iPad? Nope. Services weighed in at over $11-billion in revenue– still growing after all these years, but slowing, of course; now barely double the Mac and iPad’s share.
What’s always been around. Hardware.
See, Services don’t mean much at Apple, so don’t think the company is moving to Services, or pivoting to Services, or shifting to Services, or getting out of hardware any time soon. Apple is a hardware company and the growing Services line would be worth less without hardware.
So, what’s new?
This growing line of hardware is called Wearables and constitutes the success of Apple Watch, AirPods, Beats headphones, Accessories, and other gear– growing faster than anything else, which means the Mac and iPad, both of which are still doing very well, are officially Apple’s weakest links. Well, other than the Jonny Ive inspired butterfly keyboard on Mac notebooks.
Ive’s buddy, co-founder Steve Jobs, may have been so tight he wouldn’t give a nickel to see Jesus riding a bicycle, but Tim Cook’s view of privacy is more akin to a man talking with his tongue out of his shoe, and his version of that vision thing Jobs had is to give money back to shareholders or buy their stocks; or both.
Vision? If Cook had a good product idea it would die of loneliness.
There ain’t nothing wrong with APPL or Apple Inc. that a good product visionary couldn’t fix. Right now this summer has been hotter than a goat’s butt in a pepper patch, but Cook’s visionary product pipeline is so dry the trees are bribing the dogs.