What did the ending fiscal year 2019 tell us about Apple's future?

A few days ago, Apple announced the results of the fourth fiscal quarter Q4 of 2019 and began its new fiscal year, which begins in October of each year. Since the disclosure of these numbers, Apple's stock has risen throughout the 3 consecutive sessions, although the results may look bad. What is the secret of this matter and what do the business results tell us about the reality of the company and its future?

Lower returns and profits

The business results for the year revealed some negative points, as follows:

◉ The company's total revenues decreased to 260.17 billion dollars, compared to 265.59 billion the previous year.

Apple's operating expenses increased to $ 34.46 billion from $ 30.9 billion the previous year.

◉ “Cost of Sales” decreased to 161.78 billion compared to 163.75 billion.

◉ The company's net profit decreased to 55.25 billion compared to 59.5 billion dollars.

◉ The iPhone achieved the worst decline in the history of Apple, as it achieved 142.3 billion compared to 164.8 billion, a decrease of 13.6%, while all the decline in revenues is only 2%.

The aforementioned shorthand means that total sales have decreased, total profits have decreased, and the Apple chicken that lays gold "iPhone" is declining in sales ... So why did the stock price increase?

Optimism for 2020 despite the decline

Although the numbers may appear negative, the company seems to have succeeded in an important point, which is "better than expectations". Yes, the past year was very dark and everyone expected the worst, but it came less bad than expected, and let's look together for the details:

1

الصين: Apple's sales in China decreased by 8.26 billion dollars, while the total sales decline is 5.4 billion, and this means that Apple's popularity is increasing around the world and the decline only in China, which most often did not happen because of a problem in Apple, but the Sino-American economic war.

2

IPhone: The worst decline in the history of Apple with the iPhone, although the previous year, the devices that were sold were X at $ 1000 and 8 at $ 700 and iPhone 8 Plus at $ 800 (forgive us for an additional $ 1 that we added for the downgrade), that is, we can assume a metaphor. That the average price is $ 833 (adding the three and then the section by 3), while the end year the devices that are sold are the Xr at $ 800, the iPhone Xs at $ 1000, and the iPhone Xs Max at $ 1100, meaning the theoretical average has become $ 966.66, meaning the theoretical average has increased by 16%. So, the surprise is the decline in returns? When the iPhone becomes more expensive and achieves lower results, this means that sales have decreased dramatically, perhaps more than 20% for the three basic phones.

But the new year gives us optimism; IPhone 11 and 11 Pro are very popular, and sales exceeded expectations ... The majority were disappointed with the Xs and Xr and did not see anything new and were the object of criticism, while 11 is almost non-existent. This means that the iPhone will improve.

3

IPad Improvement: The numbers showed an increase in iPad sales for the first time in years, and even increased by 15.7%, and this means that finally Apple was able to put the iPad in the right way again, so Apple sold it at a value of 21.2 billion and this is greater than the number of 2018, which was 18.38 and greater than the number of 2017, which was 19.22 And greater than the 2016 figure of 20.62 billion. This relatively reassures the future of the device.

4

Research is increasing: Apple's spending on R&D has reached unprecedented rates, in 2014 it spent 6 billion, in 2015 it spent 8 billion, then in 2016 it spent 10 billion, in 2017 it spent 11.6 billion, and in 2018 it spent 14.2 billion, and it is up to 16.2 billion in 2018. The continuous increase means The company always has ideas for new products.

5

Accessories work: Smart phones globally, two years ago, and there has been a decline in total sales ... everyone is starting to get bored, and the devices are wonderful and there is no need to change them annually. The future in the hardware sector will be in products such as smart watches, smart speakers, and others. And in this segment Apple has achieved 40% growth in revenue. This is an indicator that also reassures investors.

6

Services : The primary sector, far from devices, has a promising future. Here, too, Apple is doing well. Revenues of 46.29 billion, while the total sales of the iPad and Mac together are 47 billion, i.e. approximately the same services together. This sector achieved a growth of 6% and this is before adding new sectors such as Arcade and such as Tv + and other services that will pour additional money into Apple's pocket. And don't forget the growing global support for Apple Pay

Conclusion

If you feel distracted from the above, we can summarize it as follows in 2020:

◉ IPhoneHe feels a lot of pressure, but the success of 11 and the prospects for introducing SE2 are making us see an improvement.

◉ IPad: On the right track for the first time in years.

◉ MacMac Pro, 16-inch Outlook, iMac Upgrade, and more: A new era will take off.

◉ AccessoriesApple will improve the entire series and launch Tags and possibly another HomePod.

◉ Services : It is constantly improving and the future for her is promising.

◉ الصين: Apple is trying to move the industry outside of China to protect itself from the crisis.

We can say that the hints and leaks about Apple's future were for the first time the tool that saved it; Without it, everyone would have felt fear. But now the company has reached a market value of $ 1.14 trillion, and there is still optimism for a promising 2020. The company will need to really reassure investors about the future, not just "rumors that there are things to come", meaning that it should not delay in releasing updates and be elaborate without a defect.

Source:

Apple