Here are some of the highlights and great insights from Apple's Q3 Investor call July 31st. Apple had one of it best quarters ever, growing in each of its 15 major markets, with revenue up by more than 20 percent year over year in the US alone.
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iPhone
“The smartphone market is very healthy. I think it is the best business in the world to be in.”
There has been ongoing growth with iPhone X, iPhone 8 and iPhone 8 Plus. Regarding iPhone X, Tim Cook, Apple CEO, pointed out that customers always want innovative products. iPhone SE did not fare as well as it did a year ago.
In the fiscal third quarter of 2018, Apple generated $53.3 billion in revenue, selling 41.3 million iPhones. Apple picked up global marketshare worldwide in smartphone and tablet markets. There has been double digit growth in mainland China, across iPhone, iPad, Services and other categories. Also, users with an actively installed base of the iPhone grew double digits since a year ago. iPhone channel inventory has been reduced by 3.5 million, company on lower end of targeted 5 weeks to 7 weeks of inventory. Also some replacement cycles are lengthening, with a major catalyst of the change being the extinction of iPhone subsidies from carriers.
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App Store, Subscriptions and Developers
Over $100 billion paid to developers from App Store since opening. Paid subscriptions exceed 300 million, a 60 percent growth in just the last 12 months. There are over 30,000 apps offering subscriptions now in the App Store. There has been over 400 million users involved in beta testing macOS Mojave, iOS 12, tvOS 12, and watchOS 5.
While iOS and MacOS systems are different, some frameworks have been migrated to the Mac. There has also been 100 percent year-over-year growth in video streaming subscriptions through apps.
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Apple Pay
There are now over 1 billion Apple Pay transactions in fiscal year, tripling growth year over year. Apple Pay's growth has surpassed Square and even Paypal's mobile transactions in Q3. Apple Pay is coming to CVS.
Apple News
The number of articles read on Apple News has doubled year-over-year.
Siri
Siri has answered over 100 billion requests in 2018.
Macs and iPads
The vast majority of SalesForce's 35,000 employees are on Macs. 60 percent of quarterly Mac sales originated from new users. The sale of Macs was low compared year-over-year because of fourth quarter MacBook Pro release.
More than half of iPad sales in the quarter were sold to new users. More than half of iPad sales in the quarter were sold to new users. iPad customers reported a high 94 percent satisfaction rate. 75 percent of businesses that are planning to buy tablets in the United States, will buy iPads.
Messages and FaceTime
There has been accelerated growth in monthly active users and FaceTime calls in Messages.
Education
More than 5000 schools and colleges have adopted Everyone Can Code programs. More than 300 schools are adopting Everyone Can Create in the fall.
Apple Music
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“Extraordinary opportunity in that business to grow the market well.”
Revenues on Apple Music grew over 50 percent over the quarter. There are now 50 million Apple Music listeners across paid subscriptions and free trials.
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AirPods
AirPods sold as fast as Apple could make them.
Movies
This fall, iTunes will host the largest repository of Dolby Atmos movies anywhere.
AppleCare and Service Growth
AppleCare has had its highest growth rate in the last 18 quarters. Tim Cook also mentioned that Apple will be offering some new services, but did not elaborate further.
AR
Augmented Reality (AR) offers limitless growth opportunities. Apple is working with enterprise business to change how things can be done, using AR.
Cash, Debt and AAPL Shares
$6 billion in debt has been retired, with a net cash value of $129.1 billion dollars corrected with outstanding debt. $20 billion in AAPL (Apple stock) was purchased on the market and retired, of which 112.8 million shares were repurchased.
On Tariffs
While Apple has not been affected the first three trade tariffs, they are still evaluating the most recent fourth tariff that is out for public comment. Tariffs would translate to additional taxes paid by consumers and Apple will share its thoughts with the White House before the public period for commenting ends.
On Customer Service
“Treat the users and customers well, and you have a great business over time.”
