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Apple – A Disappointing Quarter?

AppleApple shipped 75 million iPhones in the last quarter: 831 thousand every day, 34,620 every hour, 877 per minute, 9.6 per second. The company shipped 5.3 million Macs, while PC shipments continued to fall. As usual after an Apple quarterly report, financial analysts were disappointed. As usual, I believe they are missing what Apple is all about. They seem to be focused on whether the profit margin next week will be 38.1% or 38.6% and are disappointed if Apple ships 74.78 million iPhones when an analyst independently concluded Apple should have shipped 75.2 million.

Nothing can go straight up to the moon–as we learned from Sun, Cisco, Microsoft, and many others–but Apple still has a long way up, in my opinion. The reason is not the profit margin, although surely they will remain quite profitable. The point is they make their products easy to use, cherished by users, and with great customer support. Whenever I have an occasion to talk to Apple customer support, I get the feeling they really care about my questions. One time a support rep did not know the answer to my question, and he immediately asked if I would mind if they got a colleague with more experience on the particular question to take over the call. Can you even imagine an AT&T or Comcast support rep doing that?

The point about ease of use is profound. The financial analysts don’t seem to get the seamless integration that Apple offers. You take a picture with your iPhone and then you pick up your iPad to look at it. Or you visit iCloud.com to look at it. Or on your Mac or your Apple Watch. Or your friend or family member can look at it in the Photo Stream you have shared with them in iCloud. You can text a friend from your iPhone and then when you get back home to your Mac, you can continue the dialog from the desktop or on your iPad. None of these things requires knowing much. As Steve Jobs used to say, “it just works”. Apple products not only work but they are all tied together through iCloud. The integration and ease of use create loyalty. Loyalty creates growth and profit. No company can grow to the moon, but it is quite likely, in my opinion and based on the “disappointing results”, Apple will soon be the first company to achieve a market capitalization of one trillion dollars.

Apple earned a record $18 billion in profit during the quarter lasts year, the largest ever recorded by a single public corporation. This year the company topped that, bringing in a profit of $18.4 billion on $75.9 billion in revenue during the last three months of 2015. Equally important, iPhone, iPad, Mac, iPod touch, Apple TV, and Apple Watch devices engaged with Apple services during the quarter. Those engagements will generate continuing streams of revenue and profit in the years ahead. Did not seem like a disappointing quarter to me.

Read about how Apple devices are revolutionizing healthcare in Health Attitude.


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