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Thread: Apple iPhone sales tumble but services business grows

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    Apple iPhone sales tumble but services business grows

    iPhone sales down 17 per cent, services up 16 per cent. Shares are up 6 per cent afterhours.
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    Re: Apple iPhone sales tumble but services business grows

    Why are shares up? Overall they're doing worse and their biggest cash cow is down markedly.... I'm confused.

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    Re: Apple iPhone sales tumble but services business grows

    Quote Originally Posted by philehidiot View Post
    Why are shares up? Overall they're doing worse and their biggest cash cow is down markedly.... I'm confused.
    They announced stock buyback.

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    Re: Apple iPhone sales tumble but services business grows

    Quote Originally Posted by Ross1 View Post
    They announced stock buyback.
    Almost, it was share buyback
    Jon

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    Re: Apple iPhone sales tumble but services business grows

    Quote Originally Posted by philehidiot View Post
    Why are shares up? Overall they're doing worse and their biggest cash cow is down markedly.... I'm confused.
    Perhaps because the signs are that the pivot to services is finally starting to gain traction,

    My bet is Apple, like many other hardware and even softwre vendors, have realused that as their products hit full maturity, the reasons for new/upgrade purchases can significantly tail off .... if it doesn't fall off a cliff.

    So, they pivot to "services".

    In other words, instead of the rough and tumble of huge investments in hardwarw, hoping future sales will justify it, and the massive up-front cost they've already gambled, they want us all signed up to a subscription for a "service", where they get regular small amounts (from huge numbers of us) rather than a massive lump in a small period every year or two.

    It's the same logic that has MS trying to convince us all to use Office 365 rather than a perpetual licence where users (like me) might decide that, hey, my existing version does everything I need, so why fork out several hundred quid every couple of years (per licence) for a new or upgraded version.

    And I still think it's where MS are going with Windows, sooner or later.

    Same for Apple. Given current phones, there's only so much incremental upgrades can offer before even the most avid user decides the existing model is good enough, and stops buying new models, and they want to have at least started the pivot first.

    Of course, hardware (phone or otherwise) is going to be important for at least the foreseeable future, and if phone sales stagnate they'll try to switch it up and innovate to the next great thing, but meantime, "services" nicely smoothes out the cashflow and mitigates investment risk. And shareholders like that.

    All IMHO, of course.

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