Apple Reports Second Quarter Results

China was going all in with 5G ( due to population density and all sort of other reason ). So 5G iPhone as an upgrade was extremely popular. If I remember correctly China currently has 60% of WorldWide 5G Cell Site installation. They are basically upgrading as fast as they could.

I suppose it‘s because Covid hit China in the first quarter 2020, almost a quarter earlier than everywhere else.

The Pro line was very popular and didn't ship as quickly as the regular iPhone. That had to defer at least a portion of that demand to the next quarter.

I think schools probably bought a bunch. They handed them out to all of the elementary students in the districts around here, and I'd be surprised if they regularly kept enough iPads around for every student plus spares.

Distance learning combined with remote work made "want" become "need" for a lot of people who previously only had one computer at home.

Agreed. The fact that there is a little banner in my settings app that says "Apple Arcade 3 months available free" annoys me. In fact, it creeps me out. Obviously that little banner is easy to ignore and on its own it's no big deal, but it feels like a yellow flag like if a friend jokingly hints that they really need a glass of wine in the morning, and you know that their social circle is full of alcoholics.

This has been my major concern since 2018. When it was clear their vision of "Service" Revenue is something different to what I had in mind.

In 2014 I thought the Services Revenue Growth will be coming from bundling of iPhone + iCloud + AppleCare+ in subscription like services. Sort of like the current iPhone upgrade programme, with upsell of other things like Apple Music, Netflix or HBO where they get some sort of commissions. ( Similar to current App Store sign up commission ). Using something like Apple Credit Card ( that was long rumoured and somehow only launched in 2019 ) where Apple could afford to have revenue spread over a much longer period of time all while increases iPhone affordability. Think 36 Months instead of the usual 24 months. Apple has too much cash on hand and this delayed account receivable is something that could be used to Apple's advantage.

Instead they went with AppleTV+, Apple News+ Apple Fitness+, Apple PodCast+, Apple Arcade, and bundling them into ONE all to dilute their $10+Billion Annual raw profits from having Google as default search engine. I mean what's next? "Apple Bank" because their Hardware features and customer data which Apple do collect so they can provide better Banking services? "Apple Insurance" because Apple Watch provides Data to Apple and Apple cant share to other for privacy reason? Apple Cars with special design U1 integration of whatever that only works with Apple Find My Network? And "Apple Taxi" once Apple figure out how to do LV5 AV?

This is not Steves-Apple. This is very Tim Cook's Apple.

One of the roles of their services division is to get customers for their hardware and keep them. Eg iMessage for iPhone, the App Store

"Services" doesn't solely mean "subscription services." Apple's cut of app-store app sales is "services" revenue; as are individual songs/TV shows/movies sold through iTunes. Nothing inherently wrong with those lines of business, IMHO.

The only things that keep me from moving over to Apple's plan are being able to import my playlists and liked songs (thousands!) from Spotify, and Discover Weekly and Billboard Hot 100-esque type playlists.

Does Apple have equivalents of those features? Discover Weekly is incredible.

I did this when it came out and have definitely not regretted it.

Send me an email and join my family plan

I really questions people's decision making process when I see them on Apple Music or Apple Maps

I'm not the only one

All related - iOS has never run on Intel.

The M1 is far from meaningless. Apple's new MacBook Air is by far the best laptop I've ever used. It has fantastic battery life, stays cool without a fan, and competes with the Intel i9 in terms of performance.

While I don't think your analysis is wrong, I think it's highly developer and power user focused, representing a very small percentage of Mac owners.

iOS-ification of macOS in particular is incredibly overblown, power users have been playing up a few security design changes and modernized APIs (e.g. kext > system extensions) as if they're huge negatives that will "ruin" macOS. I just don't think those issues matter.

If the Mac itself improving was part of the Q2 results, you wouldn't have seen the similar levels of iPad revenue spike. There has been no significant change to the iPad lineup that would convince someone to buy or not buy in the last couple of years.

That's why I think this is 100% Covid or whatever you call this current spike in demand.

With Ive it's not the specifics, it's the trend — always thinner, always shaving away functionality, always looking to subtract something without appearing to have consulted users. Compare this to the work of the designer Ive has taken many cues from — Rams went for simplicity, but always with an eye to functionality and a user-orientation. It's the latter that's missing from Ive's designs.

Yeah it's pretty baffling. Is there any designer even close to Ive? Is there any company making computers or phones that are even close in terms of aesthetic? I know that wishy-washy ideals like beauty, elegance and feel aren't that appealing to a lot of HN users but Ive's emphasis on them is a significant part of Apple's success

They still don't have a day's worth of battery do they? Garmin watch actually lasts a week.

> - Ive never told them to stop making things thinner so they didn't stop.

> - he had to leave to stop the cycle

Or, you know, correct people on their misinterpretation of his desires, if indeed there was any.

I'm trying real hard to not see this comment as some sort of Apple logic distortion field showing itself in an overt manner, but not having much luck.

Lighter and thinner products also increase total addressable market by allowing products to be sold to parents and their kids. See Apple Watch Family Setup; iPad Mini, the various iPods...

I had a 12" Macbook, wrote code on it, it's a great computer. I had some issues with dust in the keyboard but they replaced it for free and it was fine after that. Biggest downside is that it got very hot during video calls, which wasn't as big of an issue in 2016 as it is now. That being said, during the time I had it, I spent half of my workday on calls and it wasn't a big deal.

The thinness and smallness of the computer was genuinely a very nice thing about it. You could hold it open in one hand easily, fit into any bag, didn't add any weight. Computers don't have all that much differentiating them anyway, so these things are actually a very good goal to shoot for. I'm guessing that they will probably end up bringing the form factor back with the M1 at some point.

> It’s actually slightly thicker because that’s needed for a better display. This would never have happened with Ive at the helm of design.

This is verifiable nonsense, given the iPhone increased in thickness between generations several times with Ive at the helm.

Something to keep in mind regarding the 12" MacBook: In 2012 Intel was telling partners that 10nm would be ready by 2015. In 2014 they pushed this back to 2016. It took until mid-2016 for Intel to admit that it wouldn't be ready by the end of the year. Ice Lake wouldn't end up shipping until late 2019.

It's crazy to think about, Intel 10nm was supposed to be available for the entire butterfly/touchbar era.

I think the difference is actually because Tim Cook doesn't care about design.

I can't find the link, but I heard when they launched the new Mac Pro, Ives tried to show Tim Cook what it looked like, but Tim responded with "I get it... its a computer", and didn't see the design until the public launch event.

Apple is generally about two things: incremental improvement and the complete package. This lets them diversify the yearly 'wow' upgrades across many components: cpu, graphics, camera, display, IO, battery, chassis, etc, based on whichever step changes reach maturity that year.

For instance, this year is not only the year of the M1 but also the Mini-LED ('XDR') displays we see on the new iPad Pro. 1000nits (peak 1600) is a massive improvement as is the improved contrast.

Meanwhile users are on their own personal replacement cycle (say 2-4 years for phone, 3-6 years for iPad and Mac). So by the time the user is thinking about replacing their device, there's several years of accrued changes across many/most components that make the latest device really compelling.

You're right that at this point all the Apple devices have at least a good 5-6 years of 'works fine' in them. But this fall when you go to look at a new MacBook Pro and it's got an XDR screen and an M2 chip that together have you 3-5x screen brightness (vs your 2015's 300nits), 3-5x graphics, 2-3x cpu, 2-3x battery life, better webcam, etc, all compared to your slowly wearing out macbook... that'd look pretty darn enticing to anyone.

As for the future? At some point component capabilities (like cpu/gpu perf per watt) reaches a point when entire new categories are unlocked, like AR/VR or computational photography effects, but those have to be incremented to as the pace of component progress allows.

Apple will keep innovating; for a long period there their A-series chips were more than an iteration ahead of the comparable Snapdragon, but they never slowed down.

I'm sure they'll increase the graphics performance and make NVIDIA-level GPUs at some point, probably to drive VR/AR. Maybe they'll try to take the premium server market too (e.g. Graviton for non-cloud offerings).

I find this train of thought fascinating.

"I am in the 0.0001% of the people that need 100+Gb ram", so it seems this massive hit of a cpu/laptop, where everyone is raving about it, is not so good when I compare it to what I need that are thousands of a percent of what regular people use.

I'm a developer, I bought the M1 mbp with 8 (yes eight) gb of ram, for testing and was supposed to then be my gf's machine. You know what, almost 6 months in, she still hasn't touched it. I would maybe go for 16gb in the next one, but she will pry it from my cold dead hands before I get a newer model and she can keep this one.

> M1 is a very impressive chip, but it can't compete with the Threadripper/Xeon club.

Looks at fanless M1 MacBook Air, with 14+ damn hours of battery life in my real-world use

I mean... OK? My minivan isn't an aircraft carrier, either.

> It really has trouble with the high-end laptop club too.

If you're memory-constrained or doing something with GPU, that might be true. Otherwise, benchmarks plz. And again, high-end laptop... looks at big desktop-replacement laptops, then back over at tiny little fanless MacBook Air

I, too, want my rocket car Mac.

But we haven’t seen what they can really do yet. The M1 sure “feels” like an iPad SoC, what with the weirdness with some of the ports and bus limitations. (External displays: little off-kilter right now in terms of limitations.)

I’m optimistic they are preparing some real firepower for a 30-inch iMac and 16-inch MacBook Pro. Or at least, I sure hope so, as I type here, looking at this damned useless OLED strip above my keyboard as my leg hairs are slowly burned away.

Well, that’s why I’m curious where it goes from here. I don’t think Apple is under the impression that 16 GiB of RAM is enough to phase out their entire line-up of Intel-based computers, which is apparently the goal. All eyes are definitely going towards what the higher end machines will look like. It’s easy to doubt them, but it was also pretty easy to doubt their claims regarding the M1, too.

All in all, I think it’s impossible to draw any hard conclusions from here. We all have to wait and see.

Sounds about right - which would mean 1.5% or so addition to gross margin - fairly material.

Stock buybacks. A company uses it's cash to buy it's own stock, reducing the number of outstanding shares. Tends to increase the stock price.

I can’t answer for those other issues but I’m an iPad Pro owner and I’ll say the 120Hz screen with the pencil feels absolutely magical. I think any Pro user who uses it for drawing and painting will not want to use anything else. It’s a legit professional tool. Looks like the new M1 version pushed even harder in that direction with its display and colour support.

It reminds me of Macs back in the 90’s. Very few used Windows for creative work. The MacOS had ColorSync and professionals in photography and print, publishing, etc refused to use anything but a Mac due to the need for colour accuracy in their workflows. To an outsider it may have seemed baffling as to why these computers were considered professional tools when everyone else in business was using Windows.

> I don’t think anyone is really arguing Cook is a product visionary—I certainly don’t think Cook is himself. But just navigating the political landscape alone is truly impressive.

I agree. However, he is a master at providing the infrastructure and logistics to make other people realise their vision. And he does have a long-term plan.

The scale and efficiency of Apple’s operations, as well as their continued success is mind boggling. There have been a couple of hiccups every now and then (and some tours de force as well); overall it is quite impressive.

Jobs became Apple CEO in 1997. Tim Cook joined Apple in 1998. It’s easy to forget, but Cook was a huge part of remaking Apple almost from the beginning with Jobs. His role has obviously expanded but he’s essentially running a company that he helped create.

> iPad Pro does, etc

I get that.

But.

Having used many iPads, my favorite sizes are the 12.9" (Pro) and the Mini.

Why (for the pro—I trust my love of the mini needs little explanation)?

The 12.9" is so big that it's about the size of an 8.5x11" sheet of paper, which turns out to be a really convenient size for reading anything based on... paper. It's outstanding for reading PDFs of, say, textbooks, as it's large enough you might be able to get away with reading it in landscape, and is the best device I'm aware of for reading comics (ditto on the landscape mode, it works great, it's just a little smaller than a real two-page comic book spread). Yet it's light enough not to be a giant pain to hold.

It's amazing for art (with a Pencil). Nice and big, very responsive. The larger screen makes almost anything you'd do on a normal iPad a little better. Movies, browsing, games. Low-distraction writing device with an external keyboard. It's a great companion for music where, again, the larger size is really nice for displaying sheet music or... well, almost anything else music-related you want to do. Last I checked the cameras & mics beat the hell out of most laptops, including Apple ones, for video calls.

Know what it's very close in size to? A 13" MBP or Air. Know what it can do? Become a portable external monitor for same. Damn nice.

2-player board games. Again, the size helps a ton.

My personal uses barely call for all the extra horsepower of the "pro" line, actually, aside from maybe drawing (which, AFAIK, has more to do with specialized hardware on the screen than with CPU power or memory) but holy crap, the screen size. It's glorious. If I could have only one computing device in my house I'd seriously consider making it the 12.9" iPad Pro (assuming I could keep my mechanical bluetooth keyboard, too). I can always SSH/Mosh to a unixy command line somewhere else, but none of my unixy machines are much good for most of what I use the iPad Pro for.

This 100% ^^

Apple can be seen as an excellent MBA course in operations, as probably to be expected. I'm not going to say Steve was a all knowing genius, but it's a pretty dang smart move to put someone in place who will put the company on such firm economical footing while you wait for your next big thing (person) to emerge from the organization.

This again.

> Those keyboards were really bad, and not everyone has the ability to just swap them out with the new fancy computers coming out now, so many will be feeling them for some time to come.

The butterfly keyboards are the only laptop keyboards made to date that I can type on for a full day. So speak for yourself: long may I be “stuck” with mine.

> Software, not so much. Design they have gone downhill.

I mean, maybe compared to Apple 2011. But compared to Microsoft 2021, Google 2021, Linux 2021, Android 2021, HP 2021, Lenovo 2021, Dell 2021? They're definitely on top.

Really? I think we are a bit hungover from 5 years of pro/hacker neglect. Which operating system would you recommend to friends and family?

I think that is a fair assessment but what about compared to their peers? Could you say the level of excellence from 2011 to 2021 Apple has deteriorated at a higher rate than Facebook, Microsoft, or Google?

> Design they have gone downhill.

Ups and downs. The M1 iMac is very interesting. I am not sure I love it but it is encouraging to see some more playful design and new approaches.

Yes. It is easy to forget over some bad keyboard or software choices that rub HN crowd the wrong way what they have done. It could have been very, very different.

> As you said there have been a few blips but I suspect those would have happened under Jobs also.

Oh yes. Jobs could be stubborn and did make mistakes every now and then. The first iMac mouse was another ergonomic and reliability disaster.