Apple had a stellar Q1 2020 Earnings Report. But there were a few unmentionables.
Apple set an all time record for revenue in its quarter ending December 29, 2019. Both products and (growing) services contributed to US$91.8 billion in net sales. That’s in contrast to last year’s Q1 number of $84.3 billion.
Several Things Apple Glossed Over
CFO Luca Maestri, in the opening remarks, carefully pointed out that customer satisfaction (451 Research) with the iPhone was reported as 98 percent. Customer satisfaction with the iPad was reported as 93 percent. Conspicuously absent was the satisfaction rating for Macs. That’s likely due to the difficulties with MacBook Pro keyboards in 2019.
Coincidentally, year over year revenue for Macs declined from $7.4 to $7.2 billion despite the introduction of the 16-inch MacBook Pro in November. Because notebooks make up the major portion of Mac sales, it’s crucial for Apple to get the MacBook Pros right, and the new 16-inch MBP appears to be moving in the right direction. Plus, an improved 13-inch MBP is rumored to be on the way.
iPad sales were also down year over year from $6.73 billion to $5.98 billon. Given Apple’s emphasis on the iPad and the gradual increase in average selling price (ASP), I take this as a worrisome sign, and Luca Maestri’s explanation admitted a “tough compare.”
Another item glossed over was the success of the Apple TV+ rollout in early November, 2019. CEO Tim Cook explained that the metric for success is the number of accrued subscribers. But no initial number was provided. This will likely remain, at least, until Apple sees how many bundled subscribers convert into paid subscribers.
Another item of interest would have been the most popular device Apple TV+ is viewed on. (iPads?) But no analyst asked the question, and Apple didn’t offer to explain.
Apple is probably not doing that badly with its current bundled subscribers, that is, those who had to take affirmative action to sign up for Apple TV+ (for free) on their new Apple device, purchased on/after September 10, 2019. We have a preliminary estimate, and if this number is even close, Apple has nothing to be ashamed of.
Apple loves to tout its huge succeses, and this quarter had many, but sometimes one has to do a little digging to uncover details that Apple just doen’t want to delve into.