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Powerful hardware and stable software output: Apple's market value is about to exceed $1800 billion

via:GeekPark极客公园     time:2020/8/1 19:49:45     readed:62

In the past four months, Apple's share price has risen 70% against the backdrop of the continuing haze. This is closely related to the overall strength of the U.S. stock market, but Apple's performance is still particularly bright. Since the Japanese and American stocks fell to the lowest point on March 23, Apple's share price has risen ahead of major competitors in technology industries such as Microsoft, Amazon, Google and FB, and has also surpassed the standard & Poor's 500 and Dow Jones index.


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Apple online store (China)

Apple CFO Luca Maestri predicted that according to the current situation, iPad and MAC performance in the next quarter may still have very strong growth

Demand for productivity catalyzed by epidemic situation

The engines of Apple's growth this quarter are the Mac and iPad.

In the past two years, the business performance of MAC and iPad has been in a state of "stable trend and partial fluctuation". There is often a short-term increase in sales after the launch of new products, but then a corresponding decline.

But the epidemic changed everything. In the past six months, more and more students and office workers began to work remotely and study online courses, which promoted the sales of productivity learning tools. This year, apple didn't release any new Mac or iPad designs, justMacBookThe air and iPad Pro have had regular performance updates, even without a formal launch, but their performance remains unstoppable.

In the quarter, MAC sales were up 22% year-on-year and iPad sales were up 31% year-on-year. The last time the MAC had such a strong growth rate was in the fourth quarter of 2017, and the iPad achieved its strongest growth since 2013.

Demand during the outbreak has brought many new users to iPad and MAC. Apple's CFO Luca Maestri said on a earnings call that about half of the users who bought Macs and iPads this quarter were first-time buyers. IPad sales in Greater China have broken through the historical record, which is closely related to the demand generated by a large number of students taking online classes at home. The long-term product advantages accumulated by iPad in the field of tablet computers have turned into excellent business performance in this special period.

Huge product demand once led to a shortage of iPad and MAC. In the conference call, Tim Cook said the supply chain for Mac and iPad production is really tight, but Apple will increase production capacity as soon as possible to prepare for the product demand that may continue to grow in the future. As the back to school season approaches, students' demand for productivity tools will not weaken, and Luca Maestri also said that according to the current situation, iPad and MAC performance in the next quarter may still have very strong growth.

According to Apple Q3 financial report, iPhone achieved a 35% sales growth under the background of the overall market shrinkage of 7% | CNBC

Mobile devices growing in adversity

But the iPhone se has also driven down the average price of iPhones, so despite the booming sales of iPhones, sales in this quarter only increased by 2% year-on-year, and the proportion of iPhone in Apple's business revenue also reached a record low of 44%.

As the smartphone market matures, the speed of technology development slows down, and iPhone users' replacement cycle is also lengthening. That's the main reason iPhone sales have been falling in volatility over the past two years. The iPhone, which occupies the high-end market, was affected by market saturation. Until this year, when the whole market began to mature or even decline, the iPhone's continued appeal to users once again highlighted. Apple's basic plate, still very stable.

At the same time, there is also good news in Greater China, which was widely regarded as Apple's "soft spot". According to Reuters, only Huawei and apple, two big brands in China's smartphone market, achieved sales and market share growth in the quarter. Apple achieved a 35% sales growth in the context of the overall market shrinkage of 7%.

The positioning of the iPhone business is quietly changing. It is no longer just the most profitable "money printing machine", but has become the "stepping stone" of Apple's ecology. In the past year, both the iPhone 11 series and the iPhone se began to reduce prices against the general trend of rising prices in the mobile phone market. Apple sacrificed part of its iPhone revenue to stabilize sales and user numbers in tough times.

Sales of wearable devices have also been negatively affected by the epidemic. Demand for Apple watch and airpods also seems to be declining after people are less likely to go out. At the same time, the closure of offline stores has also affected people's enthusiasm to try on the apple watch and buy it. In the past six months, the growth rate of this part of the business dropped rapidly, from 48% last year to 17%, returning to a relatively stable development track.

Tim Cook said the outbreak had a positive impact on MAC and iPad sales and had a negative effect on iPhones and wearables. The impact of the two offset each other, and Apple's hardware sales continued to grow rapidly. This is very rare in the half year of the epidemic.

In Q3 financial report, Apple's online digital services performed strongly, and the app store, apple music, cloud services and other content services all achieved the highest revenue record in history

Perfect answer sheet

Unlike hardware performance, which fluctuates with seasons, Apple's service business is not seasonal. Regardless of spring, summer, autumn and winter, users need to listen to music and buy apps. In the past few years, this part of the business has been maintaining continuous month on month growth, and has become the "engine" and "stabilizer" of Apple's business development.

In this quarter, Apple's total service performance was $13.2 billion, up 15% year-on-year, but slightly lower than the previous quarter's 13.3 billion. The service business ended 12 consecutive quarters of month on month growth.

During the conference call, Tim Cook explained the negative impact of the epidemic on service revenue. After the closure of the physical stores, the sales of AppleCare services were impacted, and the advertising business was also affected by the overall economic downturn.

But at the same time, online digital services performed strongly, with app store, apple music, cloud services and other content services all achieving record high revenues. Currently, 550 million users have purchased at least one subscription service on Apple's platform, an increase of 130 million over the same period last year. The overall development speed of Apple's online digital services is no less than that of spotify and Netflix.

The new iPhone se, released in April, has allowed apple to grow in a tough environment, bringing the total number of active iPhone users to an all-time high

From hardware to software, Apple has delivered an almost impeccable financial report.

In the past few years, smartphones have the widest market and are the focus of most companies' competition. With the continuous upgrading of technology and the tactics of its competitors, Apple's leading position seems to be shaken all the time. No matter how the outside world praises the backwardness of the iPhone's parameters and doubts that the iPad and apple watch are "pseudo demands", apple never responds, but keeps its own pace of development and optimizes and adjusts its products.

Adhere to the long-term development path, accumulate technology and product advantages, and finally lead apple out of the downward environment. All round performance growth has been achieved.

On the conference call, apple officially announced that this year's new iPhone will be delayed by several weeks, as early as October, which may affect the performance of the next quarter.

Apple still hasn't given guidance for the next quarter until the uncertainty of the outbreak is completely eliminated. But that didn't affect investors' enthusiasm. Apple's share price rose more than 7% in after hours trading after the financial report was announced, reaching a record high, with a total market value of nearly $1800 billion.

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