Apple Stock Summary:
- Despite the decline in iPhone sales, the company’s Q4 earnings beat analyst’s expectations and drives Apple stock price to new records.
- Apple entered the streaming market after launching its Apple TV+, introducing 8 new original series
- Apple is recruiting software engineers for its Smart-Home team
- Apple’s new earphones- The AirPods pro, features sound cancellation and new transparency mode, is now available for pre-orders (249$).
Apple Stock Trend – Apple’s Q4 2019 Earnings Report Beat Expectations
Apple published its Q4 2019 earnings report on Wednesday, the 30th of October 2019. The company presented strong quarterly revenue of 64,040$, a 1.8% increase from Q4 of 2018, and the highest Q4 revenue in the company’s history. Geographically, the company managed to set new Q4 revenue records in both the Americas and Asia Pacific segments.
The company also outperformed in its services segment, which generated a revenue of 12,511$, an 18% increase compared to previous Q4. the services segment growth was the reason Apple ended the quarter with new record high revenue despite a 1.5% decline in product revenue compared to last year’s Q4 results. Another significant trend reflected in the earnings statement is 54.4% growth of Apple’s “Wearables, Home and Accessories” revenue segment, compared to last the 4th quarter of 2018.
Although the company’s performance over the last quarter was high relative to expectations, its fiscal year revenue has declined to 260,174$ compared to 265,595$ in 2018 (-2%). More concerning is the performance in Apple’s main product segment- the iPhone, which also fell short compared to previous years. The company posted quarterly iPhone sales of 33,362$, a 9.2% decline compared to last year’s 4th quarter. Revenue from iPhone sales over the last fiscal year was 142,381$, a 14.6% decline compared to fiscal 2018. This trend is unusual compared to the high growth apple showed historically in this important segment: since the first version of the iPhone was introduced in 2007, excluding a short decline during 2016, apple continued to present high growth rates of its iPhone segment. 14.6% is the highest yearly decline in iPhone sales in the history of the company.
Investors reacted to the recent report and drove Apple stock price to 255.82$, setting a record for Apple’s market cap- 1.156 Trillion USD. (based on Apple stock price on 02-11-19)
Apple TV + Launch – Apple’s Long-anticipated Streaming Service
On November 1st, Apple launched its new streaming service: Apple TV +, introducing 8 original series alongside other content available on-demand. the price of the service is relatively low and set to be 4.99$ per month for new subscribers, but the more competitive step apple took was offering its existing customers free subscription for 12 months, a gesture simply described by Tim Cook as a “gift to our users”. By doing so, the company hopes to leverage its large existing customer base in order to gain a better position in the competitive streaming market.
Apple’s initial investment in its new original series lineup is estimated to be around $6 billion. Compared the company’s huge cash reserves those costs might seem insignificant, but taking into account the price that will probably remain low due to the competitive environment of the streaming market, together with the fact that Apple’s main competitors in this field- Netflix, Amazon and Disney, also hold large resources ready to be deployed in this approaching “streaming” war, it might take some time until revenue generated by this service will surpass the high costs related to it.
Apple Takes Next Step Toward Smart Home Market
A new article by Bloomberg informs that Apple is seeking engineers to join a new team designated to work on new smart-home software. This move might improve the company’s competitive position in the smart-home market, dominated by Google and Amazon. The article further suggests that the company is considering building new smart-home devices.
AirPods Pro Release
Apple released its new Bluetooth earphones on October 30th. The AirPods Pro features a new transparency mode. Another new feature is external sound cancellation, which supposed to provide the customer with top audio quality. The earphones will also include older features like wireless charging and voice commands.
Preorders are already available, and customers can purchase the AirPods Pro for 249$. The product will compete with other wireless earphones such as Sony’s 100X (with sound cancellation) and Amazon Echo Buds (with noise reduction feature).