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2020-05-03 07:20:55
Source:Red Weekly Stock Market
The next Guodian Nanzi
Under the epidemic, Apple’s revenue reached its lowest level in the same period in the past four years, and iPhone revenue fell below 50%.
The highlight of Apple’s earnings report this quarter is the software subscription service, whose revenue scale is close to half the iPhone’s revenue.
When asked how to look at new products like the iPhone 12, Cook said it will satisfy everyone from multiple levels, and that the new machine has a breakthrough in innovation.
After the market on April 30, Eastern Time (May 1, Beijing Time), Apple released its financial report for the second fiscal quarter of 2020 (December 29, 2019 to March 28, 2020). Affected by the pneumonia epidemic, the global economy experienced a brief “shutdown”, Apple also closed offline retail stores, and the supply chain was also affected. IPhone revenue accounted for less than 50%, but this did not hide the biggest highlight of Apple’s quarterly earnings. Software subscription service, its revenue scale is close to half of iPhone revenue.
As a global technology giant, Apple displays a certain “weather vane” characteristic, how much is the company affected? Investors hope to “find” some answers from this earnings report.
IPhone revenue fell below 50% of software services as top highlight
The financial report shows that Apple had revenue of $ 58.3 billion in the quarter, more than $ 58 billion in the same period last year and higher than market expectations of $ 54.24 billion; the net profit was US $ 11,249 billion, 3% less than the US $ 11,561 billion in the same period last year; Earnings per share for the quarter were $ 2.55, above analyst expectations of $ 2.25 and above the same period last year of $ 2.46.
All along, Apple’s hardware products have received a lot of market attention. Under the epidemic, the iPhone, its largest business, is inevitably affected. It achieved revenue of $ 28.96 billion in the quarter, a year-over-year decrease of 6.7%, the lowest level in the last four years. IPhone revenue fell below 50%.
Figure 1: Apple Financial Report
However, for Apple “soft and hard”, software services have been the “brightest star” in recent quarters. Apple’s service revenue for the quarter was $ 13.348 billion, a strong year-on-year increase of 16%, and revenue represented 23%. Apple CEO Tim Cook said: “Despite the unprecedented impact of coronaviruses globally, we are proud to report that Apple achieved growth during the quarter, which is the history of the service and portable device industry. Quarterly registration. In this challenging environment, our users rely on Apple products for new ways to maintain contact, communication, creativity and productivity. “
Yu Feng, an independent investor who has long tracked Apple, told reporters at Red Week: “The highlight of Apple’s earnings this quarter is the software subscription service, whose revenue scale is close to Half of the iPhone’s revenue, which is very encouraging, of course. This is also expected, thanks to the outbreak of the “home economy” during the epidemic. “
Overall, Apple’s earnings this quarter exceeded market expectations. However, after the financial report was announced, Apple’s stock price initially increased more than 1% in non-business hours, and fell more than 2% outside business hours. Yu Feng said Apple’s stock price has rebounded from the low point of around $ 220 to around $ 290, which is only one step away from $ 300. The current share price basically reflects performance. of the quarterly report. Then, due to the uncertainty of the epidemic and the timing and intensity of the global economic recovery, according to standard practice, Apple, like other companies, did not offer a performance perspective for the next quarter. “For now, I think Apple is at a reasonable valuation level. Although not underestimated, Apple’s stable supply chain management and control capabilities and diversified revenue distribution in the face of unpredictable epidemics have made me full of confidence in Apple’s future. “
5G will only delay and not reduce demand
Affected by the epidemic, Apple’s global supply side has attracted a lot of market attention. According to the Wall Street Journal, Apple plans to postpone mass production of the flagship iPhone by 2020 for a month, and plans to cut its flagship iPhone production from July to December by as much as 20%.
Goldman Sachs estimates that if the new iPhone is postponed until November, it can bring about $ 18 billion in lost revenue for Apple and cause sales to decrease by 14% year-over-year. Apple may postpone the launch of the new iPhone, but it will definitely be on sale in the 2020 Christmas season, at the latest in late November or early December.
Cook did not respond if Apple’s supply chain was affected by the epidemic in the latest financial report. He said Apple’s supply chain had been fully operational in late March. In fact, with the exception of Apple, the epidemic has affected the entire mobile phone supply chain. According to the latest foreign media reports, Samsung’s mobile phone production will drop by more than 50% in April, and it will be difficult to recover in the coming months. According to national media sources, the mobile phone supply chain is in deep immersion, and domestic manufacturers Huami OV have an invoice reduction rate of more than 20-30%. McKinsey’s report shows that the entire semiconductor market will decline between 5% and 15% year-on-year this year.
Figure 2: The downward trend of the semiconductor market is expected throughout the year.
Affected by this, Apple’s 5G mobile phone will inevitably be delayed. Yu Feng said the epidemic will only delay the advancement of 5G. Not just for Apple, but for all the mobile phone brands on the market, 5G is a new market. The epidemic will disrupt / delay demand for 5G, but it will not reduce this. Demand “At the same time, the launch of the Apple SE 2 generation also filled the empty window period of the market before the launch of 5G mobile phones, and Apple’s current strategy is to cover the total price, from high-end to low-end, after full market coverage will expand your mobile phone as much as possible Users, and then lay the foundation for the entire ecosystem of subscription services, I think this is a very good strategy.
He further explained that Apple’s center of gravity has slowly begun to no longer seek growth and revenue from hardware sales, to maintain hardware gross profit margin, but to sacrifice hardware gross profit margin to maximize Reach out to the user group and get them to experiment Various software services enhance the ecological value of the entire platform. “Currently, Apple has no competitors in the 5G field because it is a green closed circuit and many services are exclusive to Apple. If Apple wants to compete, then its biggest rival may be itself. At the same time, Apple itself is very good at hunger marketing, and there is a batch of faithful fruit powder. I think sales in the coming seasons are not a problem at all. The only question now is when will the epidemic end and let everyone return to the original state of life. greater uncertainty right now. “
Apple’s new 5G machine may have a breakthrough in innovation
Before welcoming the new 5G machine, Apple is doing its best to clean up inventory. From the perspective of major e-commerce platforms, be it JD.com or Pinduoduo, the iPhone 11 has been heavily subsidized and promoted. Yu Feng said, “Apple should also maintain user size and scale as much as possible, and strive to clean up its own inventory as much as possible before the new 5G machine comes out.”
However, despite Apple’s introduction of the SE 2 generation before the new 5G machine, plus the previous iPhone 11, Apple doesn’t seem to have reflected many innovations. “At this stage in the development of mobile phones, Apple phones have long been a leader in innovation. The criticism of insufficient innovation has persisted in recent years. But this does not affect sales of each new generation of Apple phones. iPhone. From iPhone sales look, it is now at a basically stable level. Since sales volume is within a relatively stable range, then for Apple, you must first seek quality and improve performance of all aspects of iPhone from generation to generation. The new features introduced are integrated into its own supply chain. This is determined by the size of Apple. This brand determines that you must first consider stability. This is not surprising, I can understand. ” Yu Feng explained.
However, according to the latest news from May 2, Cook revealed some information about Apple’s new products in an interview. When asked how to try new products like the iPhone 12, Cook said he will satisfy everyone from multiple levels. And the new machine has a breakthrough in innovation.
In addition, from industry chain and analyst Tian Feng Securities Guo Ming
