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What's going on?
Amid concerns that Apples new iPhone X isnt selling as well as hoped, the forbidden fruit set out its latest financial results on Thursday and the bag was decidedly mixed.
What does this mean?
Various Wall Street research analysts have speculated lately that demand for Apples new iPhone X is tepid: Apples stock is down more than 5% over the past few weeks. Thursdays earnings failed to allay those fears, while simultaneously reassuring investors that nothing is drastically wrong: Apples own predictions for the number of units it will sell next quarter were only a bit lower than Wall Street anticipated. The good news for investors is that people do indeed appear willing to buy the high-priced devices, meaning Apples revenues can still climb nicely even if it sells a few fewer iPhones.
Why should I care?
The bigger picture: Apple is no longer a hardware company. (tweet this)
Back in 2015, Goldman Sachs foresaw how Apple would mutate from a maker of hardware (e.g. iPhones and iPads) to a purveyor of services, like Apple Music, Apple Pay and Orange Apple TV. Owning an ecosystem of services is generally more attractive to investors, as its a steady source of revenue. It also helps fortify Apples turf (if youre an iPhone user, just imagine how annoying it would be to move to an Android system!). By focusing on services, Apple has protected and strengthened its future revenue streams and helped persuade people to pay up for the latest iPhone.
For markets: Apple has had a rough 2018 so far, but its still come a long way in the past few years.
Only 18 months ago, Apples stock price was languishing below $100 per share. It now sits at $169, which is an absolutely massive improvement for an already valuable company. The stock hasnt done much over the past 3 months or so but thats perhaps because it had already shot up like a weed.
Originally posted as part of the Finimize daily email.
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