news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Early this morning, Apple released its third-quarter 2024 financial report.

Let's first look at Apple's third-quarter revenue as a whole:

• Revenue for the third quarter was $85.78 billion, slightly higher than the market expectation of $84.5 billion, and total revenue increased 5% from $81.8 billion in the same period last year.
• Greater China's revenue in the third fiscal quarter was US$14.73 billion, compared with market expectations of US$15.26 billion and US$15.758 billion in the same period last year.
• iPhone revenue was $39.3 billion, compared with $39.669 billion in the same period last year.
• iPad revenue was $7.162 billion, compared with $5.791 billion in the same period last year.
• Mac revenue was $7.01 billion, compared with $6.84 billion in the same period last year.
• Service revenue was $24.21 billion, compared with $21.213 billion in the same period last year.
• Wearable devices, home and accessories revenue was $8.10 billion, while the market forecast was $7.79 billion.

Compared with the previous quarter, Apple has finally seen some improvement in the past three months: revenue in the second fiscal quarter was US$90.75 billion, compared with US$94.8 billion in the same period last year; revenue in Greater China was US$16.37 billion, a year-on-year decrease of 8.1%.

After the embarrassing negative growth in the last fiscal quarter, Apple has finally returned to its normal revenue rhythm this time. Almost every product line has more or less surprises, either higher than expected or stronger than the same period last year.

Because of this, the decline in revenue in Greater China and iPhone have become the two most prominent figures in the entire financial report, and may even be a bit eye-catching from Apple's perspective.

After all, one is the most important product and the other is the most important region.

iPhone in trouble

Every time we look at the financial report, everyone's attention will unconsciously focus on the "iPhone" column first. There is no other reason. This is the mainstay product in the Apple ecosystem. The performance of the financial report is directly linked to the sales of the iPhone.

iPhone revenue was $39.3 billion, compared with $39.669 billion in the same period last year, a year-on-year decrease of 1%.

To sum up the iPhone sales in the third quarter in one sentence: it seems to be selling well, but it’s still a little lacking.

Whether the iPhone sells well or not can be seen from the financial report, but we cannot just look at the financial report because the market is changing and fluid: you may sell really well, but your competitors and rivals are also making efforts at the same time.

Although Cook emphasized at the earnings conference that Apple's smartphones rank among the top three in sales in Chinese cities, a broader view of the iPhone's performance in the Chinese mobile phone market from a data report from a third-party statistics agency is not that optimistic.

The data on Chinese smartphone market shipments in the second quarter of 2024 released by IDC a few days ago showed that Apple’s mobile phone shipments fell by 3.1%, falling out of the top five in the Chinese market for the first time in four years.

▲ Image from: Google

Counterpoint's report also pointed out that in the second quarter of 2024, vivo ranked first in the Chinese smartphone market with a share of 18.5%, followed by Apple (15.5%) and Huawei (15.4%).

▲ Image from: Counterpoint

Whether it is the market share that it relies on or the sales volume that it is proud of, the iPhone has faced considerable challenges. Moreover, this happened when China's smartphone sales increased by 6% year-on-year in the second quarter, with the help of 618 to provide a guarantee.

Although the iPhone has encountered some "minor troubles" in terms of sales and revenue in the Chinese market, it is still a towering mountain in the global market and its performance is extraordinary.

Cook said iPhone set quarterly records in several countries, including the UK, Spain, Poland and Mexico, with total device activations growing to all-time highs. In several regions, many iPhone models are among the world's best-selling smartphones.

In addition, Counterpoint also pointed out that the sales of iPhone 15 Pro and Pro Max in China in the second quarter of 2024 accounted for about 50%, higher than the 47% of iPhone 14 Pro and Pro Max in the same period last year.

In other words, despite the constant controversy surrounding the iPhone, many consumers are still willing to pay for it.

In fact, this is not difficult to understand. On the one hand, the iPhone's excellent shooting capabilities, especially video recording capabilities, are unique among mainstream models. Many users who have video recording needs, in addition to professional cameras, will most likely choose the iPhone as their first choice. This phenomenon is more obvious in the media and technology circles.

Moreover, the iPhone 15 is making up for the missed work in the first half of the year in terms of battery life, power consumption control, UI design, especially the addition of home screen customization options, and satellite messaging. Through OTA, it is gradually catching up with domestic mainstream models in terms of system and software experience.

You can say that these are not the most important, but for most ordinary users, the experience of these system software is often an important factor that influences users to continue to choose iPhone and consider joining the iOS ecosystem when they replace their phones.

▲ Image from: Google

At today's earnings conference, Cook was also asked about "what affects the iPhone replacement cycle."

Cook also pointed out that the biggest factors affecting users' iPhone replacement will be:

Apple Smart

Apple Smartphones Asked from Start to Finish

It is no exaggeration to say that the telephone Q&A session in the second half of the earnings conference was almost completely monopolized by "Apple intelligence."

Almost all the guests and reporters were writing about these four words.

If you have been following Apple news since this year's WWDC, you will understand everyone's concern.

Until these two weeks, very few AI features demonstrated at WWDC were available on Apple devices.

We also updated and experienced it as soon as possible. We can only say that judging from the current progress and level, Apple smartphones are still some distance away from us, especially domestic users.

From the perspective of the global market, Apple smartphones are currently only available in very limited areas. If you want to experience the latest AI features as soon as possible, the most effective way is to connect a US-version iPhone to the US network and log in with a US Apple ID.

For the domestic market, Apple's smart phones have a long way to go. Cook also directly stated that this is directly linked to regional policies and regulations and needs to meet local regulatory policies, but they are also actively promoting it.

Cook's answer to questions about the timeline for Apple's smartphone launch in China was both direct and vague:

Our goal is to move fast because our goal is always to have features available to everyone. We first understand the regulatory requirements before we can commit to doing so and commit to a timeline.

Back to the specific functional experience, Cook directly stated at the earnings conference that AI currently mainly serves basic applications on mobile phones, such as emails and text messages, which are used almost every day or even every hour, because Cook hopes that Apple's intelligence can be implemented in a "more natural way for users."

As for the subsequent adaptation in more apps, he did not mention the exact launch time.

However, Cook made it clear that the features demonstrated in WWDC will not appear together in iOS 18, and some features "may become part of iOS 19."

I don’t know whether this is a reassurance or a preventive measure.

But based on my actual experience over the past two weeks, I would like to question the statement that "iPhone replacement depends on Apple's intelligence."

First of all, the cheaper domestic flagships have more complete AI functions and are still being developed. In comparison, Apple's intelligence is a bit less intelligent. The changes that can be seen in the iOS 18 beta version are "writing tools", "UI reconstruction", and "call recording". If the latter two can be regarded as intelligent functions, it's fine.

▲ Image from: Google

Secondly, Apple was already half a year late, and with the current progress it may have to delay its release for some time. Even if it goes online as originally planned, according to the conclusion that AI may be the decisive factor in the next phone change, and considering that domestic mobile phone manufacturers have already started and are even gradually maturing their AI, what is Apple's advantage in intelligence?

In addition, Cook also mentioned at the earnings conference that the addition of Apple smartphones will increase the production and manufacturing costs of the equipment.

Due to the requirements for device performance and computing power, new features can only be experienced on the latest top-end models. Currently, the only iPhone models that support smart updates are iPhone 15 Pro and iPhone 15 Pro Max.

Will the higher starting price of Apple’s smart experience become a factor hindering the next iPhone’s revenue and sales?

The current situation is grim, and the third quarter's financial report will be mixed. Now that we have talked about what we need to worry about, let's take a look at the data that will make Apple happy.

iPad and Mac for top students

Let’s look at tablets first. iPad revenue in the third quarter was US$7.162 billion, up about 24% from the same period last year.

This is related to the launch of the new iPad, and of course it is also linked to the product strength of the new iPad.

The most obvious update of the iPad is in the shell and feel. The new iPad is more like a product designed for offline use because it feels really good to hold.

Moreover, the new iPad Pro has become the thinnest Apple product in the world, only 5.1mm (13 inches). Even the 11-inch one is only 5.1mm.

▲ Image from: Google

The most core iteration of the iPad is in the chip. The first M4 chip was actually used in the iPad first, which is a bit contrary to the iPhone and Mac.

The most successful aspect of the iPad is the change in the purchasing population. Cook said at the meeting that half of the new iPad buyers are first-time buyers of this series of products.

The biggest easter egg of the iPad is the new Apple Pencil Pro. Whether it is pressure sensing, vibration feedback, or realistic projection on the screen, it can be considered an upgraded experience.

▲ Image from: Google

Mac, on the other hand, also performed well.

Mac revenue in the third quarter was $7.01 billion, compared with $6.84 billion in the same period last year, a year-on-year increase of 2%.

Cook said that the biggest contributor was the launch of the new MacBook Air. There was no change in appearance, but the chip was upgraded. The addition of M3 allowed the Air to catch up with the progress of the Pro.

According to Apple's statistics, the most popular Mac product among users last quarter was the 13/15-inch MacBook Air equipped with the M3 chip.

Moreover, it happened to be at the end of the third quarter financial report settlement, which coincided with the new student enrollment and back-to-school season. The promotion of educational discounts also increased Mac's overall revenue to a certain extent.

The revenue of these two products has improved, mainly through hardware upgrades to significantly improve the software experience.

But in the iPad and Mac, two products that are closer to entertainment, audio-visual, work and study, Apple's intelligence should actually be brought into play.

The biggest update to the iPad at WWDC was the computer.

It sounds a bit ironic, but we are more looking forward to the fact that with the support of high-performance and high-computing power cores such as M3 or even M4, these flagship products should have better performance. We hope there will be more software updates like this one for computers, which are rare but seem to improve the experience.

Hardware promotes quantity, while software touches people’s hearts.

This is true for iPad and Mac, as well as iPhone, and of course don't forget Vision Pro.

At the end of June, the Chinese version of Apple Vision Pro was officially launched, and the store experience was quite popular, but there is no accurate figure for the specific transaction volume.

"Well-received but not popular" may be the most appropriate way to describe AVP's current situation. It has amazing effects, advanced experience, and its price is far from the mass market. It focuses on all aspects.

Vision Pro’s top priority is to expand the depth and breadth of its ecosystem.

After the Chinese version was released, we experienced many third-party apps that were carefully adapted, such as JD.com and Taobao; of course, most of them were just copied and pasted from iPadOS to AVP, with no explanation or demonstration of "spatial computing" at all.

Cook mentioned at the earnings conference that there are now more than 2,500 local space applications and 1.5 million apps compatible with the visual operating system.

From the high attention received in the last two quarters' earnings conferences to the lack of interest this time, Vision Pro and Apple need to find some breakthroughs.

Finally, let’s talk about Apple intelligence, which is of concern to Apple shareholders and us.

Bloomberg’s Mark Gurman reported earlier:

Some of the features of Apple Smart will appear in the developer preview push, but the official version will actually be released "later than expected." Apple currently plans to launch these features to the public in an update in October.

However, judging from Cook’s preview at the earnings conference, the complete Apple smartphone may come later, including the launch of ChatGPT, which may have to wait until the end of the year.

▲ Image from: Google

Going slow is faster, it is a strategy, and it is very likely that you will find the "fastest curve" that suits you best.

However, correspondingly, it needs to have more thorough preparations, more innovative functions, and smarter intelligence. If it only keeps pace with its competitors and rivals, without any regional advantages, it will lose its unique experience. The combination of these factors may directly affect Apple's financial performance in the next quarter.

We all know that AI is the next era. So what kind of "fruity" answer will Apple, standing at the doorstep of the era, give? Whether you are here to watch the fun, see the jokes, or look forward to the results, it is actually worth looking forward to.