Apple’s Fourth Quarter Financial Results

Apple tonight presented the results for its fourth and final fiscal quarter of the year, which also allows us to close the figures for fiscal year 2016. And the trend that began half a year ago continues with a decline in earnings: $46.9 billion in revenue and $9 billion in profit, compared to $51.5 billion in revenue and $11.1 billion in profit in last year’s fourth fiscal quarter.

The launch of iPhone 7 has not affected this fiscal quarter too much, as it appeared in stores only a week before the above mentioned. And as predicted, 2016 becomes Apple’s first fiscal year in which the company’s total revenue and profits have declined since 2001 .

Apple has $237.6 billion in its coffers

The press release issued by Apple confirms sales of 45.5 million iPhones, 9.2 million iPads and 4.8 million Macs . It also represents a drop in sales compared to last year, although as we said before, we have yet to see the sales pull that the iPhone 7 is causing.

Tim Cook rates the year as “very satisfactory” and highlights that despite the decline in sales we still have records: the service division has grown by 24% since 2015 , something never seen before. Another record is the cash available to the company right now: no less than $237.6 billion.

It has to be said: the results have been better than the analysts’ predictions. And with the release of what we will see the day after tomorrow along with iPhone 7 sales, we should see a next fiscal quarter with new records . But let’s focus on the present and review the main points that Tim Cook himself said at the press conference:

  • It seems that 2016 has been the year when more Android users have switched to iOS.
  • Apple Pay continues to grow, increasing its activity fivefold. There have already been more transactions in this quarter than in all of 2015.
  • Apple’s services division, at its current rate of growth, is expected to reach the size of a Fortune 100 company on its own by 2017.
  • Tim Cook has stated that Apple Pay will arrive in Spain in “a few months”.
  • Apple is optimistic with HomeKit: it wants more than 100 compatible products on sale by the end of the year.
  • The iPhone has grown in India, sales have increased by 50% compared to last year.
  • An interesting figure coming from Luca Maestri, Apple’s CFO: 2.7 million iPhones have not been counted as sales this quarter because they are in transit. The executive highlighted “strong” growth in iPhone sales in Canada, Latin America, Central Europe, the Middle East, India and South Asia. He also promises better performance in China for the next quarter.
  • More Android “converts” mean more app sales: iOS App Store has been growing in revenue nonstop for five consecutive quarters.
  • Tablets don’t die: Apple dominates 82% of the market for units priced above $200.
  • Resultados del tercer trimestre fiscal de 2016

    Luca Maestri noted that Apple has made four acquisitions this quarter.

We will now highlight the most interesting questions and answers that were asked at the press conference:

Apple’s Fourth Quarter Financial Results
Apple’s Fourth Quarter Financial Results

What advantages could Apple have in the automotive industry? Luca Maestri: There are a lot of technologies that will be available in the future that could revolutionize the world of cars. Right now we have nothing to announce .

Why has investment in R&D tripled while sales have grown by only a fifth? Is that the incremental expense of a product that has not yet arrived? Tim Cook: Obviously we have R&D put into products that haven’t yet reached the market. It’s a part of it. […] We are investing with confidence in the future and that’s why you see an increase in spending .

Can you tell us about acquisitions that may be larger than normal? Be careful with this question, because it smells like an attempt to find out if Apple would be willing to acquire Twitter. The answer has been given by Tim Cook: We’re open to acquisitions of significant value that can improve products for our customers .

Do you think that proprietary content [on TV] is a good field for Apple or is it better to keep focusing on the ecosystem and distribution? Tim Cook: We’ve started testing with our own content as you mentioned. It’s a great opportunity for us from the point of view of that very creation as well as the rights. It’s definitely an area we’re focusing on .

We have seen an approach to artificial intelligence in products like Google Home or Amazon Echo. And we have Siri. What do you think about balancing AI with security? Tim Cook: We live in a mobile society. People are constantly moving from their homes to work and other places. The advantage of having an assistant on your phone is that you have them with you everywhere. I’m not saying there is no market for an assistant at home [like Amazon Echo or Google Home], but the usage on the phone is much higher. We have 2 billion questions asked of Siri every week and Apple has sold more devices with a built-in assistant than any other company.

[…] As far as the balance between AI and security, I think there’s a false belief that we have to give up our privacy for an AI to do anything for you. We don’t believe that. It may involve a different kind of work and thinking, but I don’t think we should throw away our privacy. It shouldn’t be a choice .

Do you think the addition of more and more features on the iPhone can make its price go up?

Tim Cook: We want to ask a fair price. We won’t ask for more than that .

At Apple

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