Apple Slices- Apple Earnings and Siri Speaker Rumblings

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Time to take some small bites out of the current Apple news, now that there is a little bit beyond the early-onset iPhone 8 insanity that I complained about last week. And, as some of you many have noticed, there are a few changes afoot around here, as well.

Apple Quarterly Earnings

Apple released its second quarter earnings yesterday. They were pretty much as expected. iPhone sales are flat. iPad sales are down again. Macs were up slightly and Apple’s fast-growing services category is increasingly profitable. Also, the “Other Devices” category, which covers Apple’s hardware other than the Mac, iPhone, and iPad (which notably includes the Watch), was up significantly. None of this was shocking. All of these things ar objective facts straight out of the report.

You know what else was as expected after Apple released its earnings? Media hyperbole in both directions. The responses to Apple’s earnings are all over the map. Here are some of the more notable headlines:

A few media outlets take a positive angle:

  • “Apple is making more money selling fewer things”- The Next Web
  • “Apple services, “Other” revenue sources impress with massive Q2 growth”- appleinsider
  • “Apple beats expectations in Q2 2017 earnings report”- Cult of Mac
  • “Apple is alright despite slowing sales as high-end iPhones increase the average selling price”- Firstpost

Others have a much more negative view:

  • “Apple sees surprise fall in iPhone sales”- BBC World
  • “Apple reports surprise drop in iPhone sales, again”- The Guardian
  • “Apple reports surprise decline in iPhone sales”- The Telegraph
  • “Apple’s Big Problem: iPhone Sales Are Flat”- NBC News
  • “Apple Stocks fall Amid iPhone, Services Disappointment”- Fox Business
  • “Apple Shifts Out of the Fast Lane, Perhaps for Good”- Bloomberg
  • “Apple Going Lower: FYQ2 Revenue Misses, Q3 Rev View Misses; 50.8M iPhones Misses Consensus”- Barron’s”
  • “Surprise: Apple iPhone Sales Fall in Last Quarter”- Fortune

And still others wisely see the good and bad more equally:

  • “Apple’s services business grows 18%, as iPhone sales stall”- TechCrunch
  • “Apple in Q2: Sold fewer iPhones than last year, but also made more money.”- Macworld
  • “Apple earnings show modest growth, but iPhone sales are flat”- The Verge
  • “Apple’s earnings show declining iPhone sales, average returns in second quarter”- Digital Trends
  • “Apple is too damned big”- Quartz
  • “Apple’s marginal gains fail to please”- The Wall Street Journal

Some focused on a single fact or targeted viewpoint:

  • “Apple Pay transactions rose 450% in the last year.”- VentureBeat
  • “Apple now pays the biggest dividend in the world…”- CNBC
  • “Apple Sells Fewer iPhones in Latest Quarter After Consumers Wait to Upgrade”- Bloomberg
  • “Apple iPhone sales fall, maybe because of iPhone 8.”- CNET
  • “Apple sold fewest iPads in a quarter since the tablet’s first year.”- VentureBeat
  • “Apple Watch sales have nearly doubled YoY says Tim Cook; exact sales numbers left unsaid”- TechMeme
  • “Apple’s growing pile of cash stash spurs talk of huge acquisition”- Associated Press

Here are a few of my completely subjective and un-informed observations based on all these takes:

  • The funny thing that stands out to me is how some of the media outlets come up with the exact opposite viewpoint based on the same facts. The Apple spin can be ridiculous, whether positive or negative.
  • I also find it interesting that Fortune, The BBC ,The Telegraph, and The Guardian were surprised at the drop in iPhone sales when the numbers are within a couple of percent of predictions leading up to the earnings report. If they were really surprised, or think anyone else was, then they’re incompetent. Here’s the thing- they aren’t. This is just click-bait. It’s pretty sad that the worst headlines are coming from the bigger names on this list.
  • Fox Business’ take just comes off as completely uninformed. Calling Apple’s Services business, which rose 18% this quarter and is just scratching the surface of its potential, disappointing is ridiculous.
  • Cult of Mac’s headline paints too rosy of a picture of this report. Apple still depends on iPhone sales, so their lack of growth is cause of some concern, zombie iPhone 8 hype not withstanding. There is also nothing positive about the fact that iPad sales were still in free fall before the release of the new iPad. Apple barely beating some expectations doesn’t tell the full story, any more than being “surprised” by numbers known in advance does. There is good news in this report, but it is still tempered with some concerns.
  • To me, the most useful information from this report is coming from the more focused articles and headlines. There are deeper reasons and stories behind all of these numbers, and these stories dig beyond the surface toward some of them.
  • There is more than one mention of Apple’s swelling cash reserves (I just mentioned one, for brevity), as well as their now largest dividend program in the world. That dividend program is going to make Apple’s investors very happy, and if Apple decided to do something substantial with their quarter of a trillion pocket change, they will be even happier.
  • Like Services, the Watch seems to be emerging as a solid, slow-burn profit center for Apple. All signs point to sales gradually picking up steam, despite the prevailing media opinion that the product is a disappointment.
  • There’s no covering up how bleak the iPad numbers have been for a few years now, and the situation continued to get worse in the second quarter. However, everyone needs to understand that the sales numbers for the new iPad won’t have an impact until next quarter’s earnings. If they are still this bad at that point, then there’s reason for Apple and its fans to really worry about the future of the iPad and their strategy for it.

Stay tuned for next quarter. iPhone sales will likely be pretty poor with the iPhone 8 hype train rolling on. However, it will be interesting to see if Apple’s Services and Other Devices categories continue to grow. In my opinion, the most critical piece of news for next quarter will be if the new iPad and its lower price at least levels off the continued decline in sales.

Siri Speaker

I’ve been thinking about writing something on Siri as we get closer to WWDC, but then these rumors of a Siri Speaker started making the rounds, so I decided to hold of for a bit. My thoughts leading up to this were basically that Apple needs to get more serious about their digital assistant. Siri has seemingly been an afterthought for a long time now, with only a gradual trickle of improvements and functionality added over years the last six years. Amazon, Google, and Microsoft have all equalled or surpassed what Apple offers as far as voice search, AI, and app and service tie-ins, despite Apple getting to this category first. Amazon and Google also both have products that are delivering a superior experience with voice assistant technology into homes. If nothing else, this product rumor at least gives me hope that Apple gets it, and is FINALLY going to start paying more attention to this area that is quickly growing in importance.

The Siri Speaker is our first real WWDC rumor, as that would be the likely place and time to announce it. It’s less than five weeks away now, so more and more information on this and other products, and details of iOS 11 should be coming up soon. While this product is still just a rumor right now, considering that the fairly reliable Ming-Chi Quo of KGI Securities has weighed in saying that this product has a 50-50 or better shot of hitting shelves, there is a good chance that there is legitimate supply-chain action happening. Cult of Mac followed that up today saying that Apple has placed production orders, so there may be more than just smoke here.

The functionality of this rumored device hasn’t really been discussed yet. I am guessing most people think that it will have a similar feature set to the Amazon Echo and Google Home. However, what is more interesting is whether Apple can make the experience equal to either of those products. One rumor is that Apple could focus on making the audio quality far better for music playback, which would be a very smart move. This is a relatively weaker area for Amazon and Google’s products, and would only serve to bolster Apple Music from the hardware side.

However, all the nice speakers in the world can’t cover up Siri’s deficiencies in search and delivering direct answers to questions. The biggest question is, what can Apple do to fix this before releasing such a product? Or do they have a big revamp of Siri waiting in the wings to be revealed at WWDC? Robert Scobel actually alluded to a complete, ground-up revamp of Siri that Apple has been working on behind the scenes and will reveal this year on an episode of TWIT a few months ago. Scobel’s track record is mixed, and some of his other Apple predictions from that podcast seemed really out there (a see-through bodied, augmented reality-focused iPhone 8?), but he does have sources in lots of places. He may be onto something. I can’t imagine that Apple would expose themselves with a device that could deliver an Apple Maps launch-like experience. If this device is real, then some changes to Siri MUST be coming. Again, stay tuned.

Cha-Cha-Cha-Changes

If you are a frequent visitor here at iPad Insight, then you may have noticed some changes over the last week. Namely, a bunch of iPhone articles suddenly appeared alongside all of the iPad content that you are used to. For those of you who may not be aware, iPad Insight has had a sister site named iPhone Insight that has covered that side of the Apple landscape for the last couple of years. All parties involved here came to the conclusion that such an arbitrary split no longer makes much sense. iPhone Insight will be going away, and the migration of all the iPhone coverage from there to iPad Insight was the first step.

If you take a look around the Apple Blogosphere, you will see that this is how things have shaken out over time. There were initially many iPhone-centric blogs that sprang up around and after the release of Apple’s cornerstone mobile device. In some cases, these blogs and sites simply broadened their coverage as devices like the iPad and Apple TV hit the market. Others, like this group of sites, split into multiple divided domains with little to no crossover. Over time, the former model has largely won out, as the vast majority of Apple-focused sites now cover all of Apple, rather than just bits and pieces. In response to the way Apple coverage has changed across the web, from this point forward, you wil begin to see more and more coverage of ALL Apple devices here, with an emphasis on iOS.

If you are a long-time reader of iPad Insight, especially if you go all the way back to the days of the Just Another iPhone Blog and Just Another iPad Blog, please don’t be worried or put off by this change. Patrick Jordan, the founder of these sites, actually hired me for my first gig writing about iOS back in 2010. I primarily wrote for him at Just Another iPhone Blog (which was later sold and became iSource), but if you do a search of the site, you will see that I also wrote a couple of articles for this site going back that far, as well. I have a lot of respect for the way he did things and the very high quality that he maintained over a long period of time. I also respect the long history that iPad Insight has, and feel a connection with it because of my previous time here.

Be certain of one thing- the iPad will NEVER go neglected here. I am using my 12.9″ iPad Pro to write this article right now, just as I do for every other article that I write here. I love the iPad and will remain committed to it as a platform, no matter what the market share or sales numbers say. I love the current devices, and the iOS touch interface on the larger Pro screen. The current iPad and iOS really work for the personal computing tasks that I have, and the things that I do outside of work. As long as I am writing here, the iPad will still be the cornerstone of the site.

That said, there is a wide and growing world of Apple products, especially centered around iOS. I have already been covering a lot of general Apple and iOS news here, but now you will start to see some iPhone, Apple Watch, and maybe even some occasional Apple TV content here, as well. The numbers tell us that most Apple users own and use more than one Apple product, so I would imagine that many of you iPad owners reading this also have an iPhone. Some of you likely have an Apple Watch, as well. What I aim to do is to find a good balance of mixing news and tips for these other products in with the iPad coverage that you are used to seeing here.

If anyone has comments or feedback about this change, or what you would like to see, I am ALL EARS. I always am. I love hearing from you, whether it is positive or negative, good, bad, or ugly. Whether I agree with you or not, I will ALWAYS respect an informed opinion and listen with an open mind. I want make sure that this change enhances your experience here, rather than detracting from it.

In the future, I will try and keep Apple Slices a bit shorter, but there is finally a bit of real Apple news to cover, on top of our changes here. Again, if you have any feedback on Apple’s Earnings, the rumored Siri Speaker, or the changes coming to iPad Insight, I would love to hear from you. You can reach me using the Comments section below, on Flipboard, on our Facebook page, or on Twitter @iPadInsightBlog. Also, very soon, you will be able to keep up with us using Apple News! I will be sure to let everyone know when our first post goes live there.


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2 thoughts on “Apple Slices- Apple Earnings and Siri Speaker Rumblings”

  1. I believe the IPad remains overpriced. If it is to become a more popular product with some chance to replace laptops, there must be a reasonably powerful version suitable at least for video consumption and simple photography editing that costs about $500 with a more capable, pro-level version starting at perhaps $900.

    If Apple wishes the Ipad to become a stronger competitor in the education area, there must be a version capable of using either Microsoft Office 365, Apple office3 apps, or Google Docs for less than $400, possibly restricted to schools.

    1. I definitely agree with your assessment on price. Apple’s new iPad is $325 new with 32 GB, which is all I have on my Pro. If you are using cloud storage for docs with Google Docs or Office 365, it works. Time will tell how much impact it will have, but I think it could help them start to turn the tide, at least with existing users who haven’t been upgrading, and in education.

      I am also hoping that the prices of the current form factor Pros will continue to come down a little bit. If the nice 10.5″ model with the edge to edge screen come out, I could see it taking over that higher price role, but a spec-bumped 12.9″ and 9.7″ at lower prices could make more headway in enterprise sales. Every little bit will help.

      You know what I would really love to see? A touch-enabled iPad Pro flavored iOS MacBook. A super-thin, high battery life machine with no fan, a great keyboard, and an OS built on touch. If Apple would bite the bullet and make the trackpad work beyond just editing documents and text, I think it could be a big winner for a lot of businesses. Such a device would get rid of a lot of problems that some have with switching to an iPad full-time.

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