WEBVTT - Instant Reaction: Intel and Apple Earnings Results 0:00:02.440 --> 0:00:06.800 Bloomberg Audio, studios, podcasts, radio news. 0:00:07.160 --> 0:00:11.160 Shares of Intel are just surging as we speak right now. 0:00:11.200 --> 0:00:13.200 Taking a look at shares in the after hours, they 0:00:13.200 --> 0:00:16.079 were up as much as fifteen percent. This after the 0:00:16.160 --> 0:00:19.439 company gave a fourth quarter revenue forecast slightly above estimates. 0:00:19.480 --> 0:00:23.160 It sparked optimism that it's capable of reclaiming some lost 0:00:23.600 --> 0:00:27.560 market share. Shares are just absolutely surging right now. Remember 0:00:27.640 --> 0:00:30.960 shares down going into this print, close to sixty percent. 0:00:31.600 --> 0:00:35.120 We got with us Ed Ludlow joining us from our 0:00:35.200 --> 0:00:38.479 San Francisco bureau. I know he's looking closely at these 0:00:38.520 --> 0:00:40.720 results because he's got a chat with Pat Gelsinger coming 0:00:40.800 --> 0:00:43.800 up at six pm Wall Street Time, a special edition 0:00:43.800 --> 0:00:47.280 of Bloomberg Technology on Bloomberg TV, Bloomberg Radio, YouTube, and 0:00:47.440 --> 0:00:51.720 Bloomberg Originals. We'll get to that in just a minute. First, though, 0:00:52.240 --> 0:00:55.280 Ed expectations were pretty low going into this print. 0:00:56.040 --> 0:00:57.800 Yeah, and there's a lot to unpick here. 0:00:57.840 --> 0:01:01.280 It's not straightforward because in the core to gone, Intel, 0:01:01.600 --> 0:01:04.960 which was previously like one of the world's leading chip makers, 0:01:05.280 --> 0:01:09.040 has given us a mixed bag. Its data centerships business 0:01:09.040 --> 0:01:12.120 did better than expected, but it's PC business where it 0:01:12.160 --> 0:01:15.640 has historically been the leader did worse. The answer to 0:01:15.680 --> 0:01:20.200 that is customers had inventories and they worked through backlogs. 0:01:20.520 --> 0:01:22.360 And when we speak to Pat later, I think there's 0:01:22.360 --> 0:01:24.560 a discussion to be had about the future of Intel 0:01:24.560 --> 0:01:27.399 and the PC market. But the most important thing to 0:01:27.480 --> 0:01:30.240 note is the stock is up significantly and after hours, 0:01:30.480 --> 0:01:33.480 and that is in spite of almost three billion dollars 0:01:33.480 --> 0:01:38.160 of impairment charges that Intel took relating to headcount reduction 0:01:38.560 --> 0:01:41.600 canceled projects. And what's so interesting about that is if 0:01:41.640 --> 0:01:44.880 you look at the estimates going into this quarter, and 0:01:45.040 --> 0:01:47.280 lists on Wall Street had not factored that in. 0:01:47.640 --> 0:01:49.880 So it's a surprise, a negative surprise. 0:01:50.240 --> 0:01:53.400 And even so the stock is up significantly because, as 0:01:53.400 --> 0:01:55.280 you point out, the top line of the story is 0:01:55.600 --> 0:01:57.200 maybe there's some hope here for Intel. 0:01:57.440 --> 0:01:59.600 It is there. There's also a headline ed and I'm 0:01:59.640 --> 0:02:01.920 just getting caught up. I know you've made some time 0:02:01.920 --> 0:02:03.840 to look at this, but there's the news is coming 0:02:04.320 --> 0:02:08.519 fast and furious. They're reducing headcount by sixteen five hundred employees. 0:02:08.560 --> 0:02:11.720 Is that on top of the other headcount productions this year. 0:02:12.400 --> 0:02:16.160 This is a confirmation of the previously stated plan for 0:02:16.240 --> 0:02:21.160 headcount reduction, and that the literal update is that the 0:02:21.200 --> 0:02:25.799 Audit Committee of Intel, a section of its board, has 0:02:25.840 --> 0:02:29.160 approved that plan. So the number is final sixteen thy 0:02:29.280 --> 0:02:32.800 five hundred staff to be cut. And again I go 0:02:32.919 --> 0:02:34.960 back to the impairment charges. If you look at the 0:02:35.000 --> 0:02:38.400 adjusted loss per share in the quarter gone much much 0:02:38.440 --> 0:02:42.080 wider than anyone on the Wall Street had anticipated. And 0:02:42.120 --> 0:02:44.600 a part of that was that the impairment charges it 0:02:44.680 --> 0:02:49.480 disclosed relative to headcount reduction, but there's other things in there. 0:02:49.720 --> 0:02:52.800 They just hadn't factored that in for this quarter. Intel 0:02:52.880 --> 0:02:55.480 wasn't able to guide for it into this quarter. So 0:02:55.520 --> 0:02:58.080 it's a timing and an accounting issue, which you know 0:02:58.120 --> 0:02:59.360 sometimes can be a bit dry. 0:03:00.000 --> 0:03:01.440 There's much more to discuss. 0:03:01.240 --> 0:03:04.519 Okay, well' speina, much more to discuss. The Intel CEO 0:03:04.520 --> 0:03:06.320 Pat Gelsinger, who you're going to speak with a little 0:03:06.360 --> 0:03:09.320 later today, saying in a statement that he intends to 0:03:09.440 --> 0:03:13.880 keep the company together. Yeah, he says that distinct, but 0:03:13.960 --> 0:03:17.839 better together is the strategy. The context for this is 0:03:17.840 --> 0:03:20.240 is reporting from earlier this year that said they were 0:03:20.560 --> 0:03:23.240 exploring a separation of parts of the company. 0:03:23.960 --> 0:03:25.280 So it's complicated. 0:03:25.320 --> 0:03:28.519 And first off, the headlines from Pat Gelsinger were a 0:03:28.560 --> 0:03:31.160 part of a brief conversation that our colleague and King 0:03:31.200 --> 0:03:36.240 had with him on the phone. And the context is, yes, 0:03:36.720 --> 0:03:41.240 Intel is a chip company. It offers chip products processes 0:03:41.320 --> 0:03:45.120 that go into computers and data centers and other business areas. 0:03:45.480 --> 0:03:48.880 But it also has a manufacturing business, which historically the 0:03:48.920 --> 0:03:51.440 reason that Intel was so good at chips is it 0:03:51.480 --> 0:03:55.200 built them or manufactured them for itself. As many of 0:03:55.240 --> 0:03:57.480 your listeners have learned in the last two or three years, 0:03:57.760 --> 0:04:01.280 there's a company in Taiwan called TSMC that has basically 0:04:01.320 --> 0:04:05.360 taken over the vast majority of cutting edge chip manufacturing 0:04:05.640 --> 0:04:09.000 on a contract basis for everyone else, and Intel had 0:04:09.000 --> 0:04:12.120 really fallen behind. But Intel's ambition is to have a 0:04:12.160 --> 0:04:15.360 company where it has its own products, it manufactures its 0:04:15.400 --> 0:04:18.520 own products, but it also wants to manufacture chips with others, 0:04:18.560 --> 0:04:21.560 just like TSMC does. And that's a long answer, but 0:04:21.640 --> 0:04:24.760 the short of it is, this is Pat Gelsinger saying, yes, 0:04:25.080 --> 0:04:28.039 we're going to run the company that way to separate divisions, 0:04:28.080 --> 0:04:30.440 but no, we're not going to sell off one part 0:04:30.480 --> 0:04:33.640 to a third party or be acquired by a third party. 0:04:33.880 --> 0:04:35.960 That's kind of reading between the lines because he was 0:04:36.000 --> 0:04:37.240 not explicit. 0:04:38.279 --> 0:04:42.360 Ed. You have to wonder how much patience investors have 0:04:42.680 --> 0:04:47.640 right now to see this turnaround play out, because, like 0:04:47.720 --> 0:04:51.320 Tim had mentioned, Intel stock is down almost sixty percent 0:04:51.560 --> 0:04:54.080 year to date. So what do we know right now 0:04:54.120 --> 0:04:58.479 about just how urgent the need for the turnaround is. 0:04:58.839 --> 0:05:01.200 When you think about the share price. 0:05:01.760 --> 0:05:04.400 I mean, do we have to wait for those listening 0:05:04.480 --> 0:05:06.679 on radio. I'm looking at a chart and the line 0:05:06.720 --> 0:05:08.920 goes straight up in the air with a thirteen percent 0:05:09.000 --> 0:05:11.839 next to it, And if you're watching on YouTube, maybe 0:05:11.880 --> 0:05:14.000 we can put the chart up. And it's an astonishing 0:05:14.040 --> 0:05:17.640 market reaction because of the pain of the quarter gone 0:05:17.640 --> 0:05:20.479 that I just told you, and what Intel told us 0:05:20.520 --> 0:05:22.440 for the final three months of this year is here's 0:05:22.480 --> 0:05:24.480 a range of revenues we think we're going to have. 0:05:24.880 --> 0:05:27.159 At the midpoint of that range, it was just slightly 0:05:27.200 --> 0:05:30.640 ahead of consensus estimates. But the market is you know, 0:05:30.680 --> 0:05:33.640 what's the saying, you guys that the investors vote with 0:05:33.640 --> 0:05:37.680 their feet, right, And you know, I think that's the 0:05:37.760 --> 0:05:40.760 read here. They look at the commentary from Intel and say, 0:05:40.760 --> 0:05:42.960 you've done some really painful things in the quarters gone. 0:05:42.960 --> 0:05:45.159 You've let go of a lot of people canceled a 0:05:45.200 --> 0:05:47.760 lot of projects. You had a pretty rough quarter in 0:05:47.800 --> 0:05:49.919 your PC business where you were once a leader and 0:05:49.920 --> 0:05:52.120 you've fallen behind. But as we look to the next 0:05:52.200 --> 0:05:54.640 three months and beyond that, there are signs that you 0:05:54.720 --> 0:05:57.720 might be turning a corner here. And that's great because 0:05:57.720 --> 0:05:59.839 that gives us a lot to ask Pat Gelsinger about 0:06:00.080 --> 0:06:00.480 to today. 0:06:01.200 --> 0:06:03.520 Don't give away the questions, ed, I would never ask 0:06:03.560 --> 0:06:06.159 you to do that, but what is top of mind 0:06:06.160 --> 0:06:08.960 for you ahead of this conversation, especially given that you 0:06:09.040 --> 0:06:12.080 got to read a little bit of what Ian's conversation 0:06:12.160 --> 0:06:14.680 went with him earlier, and then also you get the 0:06:14.680 --> 0:06:16.640 most recent numbers that we're talking about right now. 0:06:16.760 --> 0:06:18.800 Yeah, because of the analyst call as well, and you 0:06:18.839 --> 0:06:20.760 never know what's going to come up in an analyst call. 0:06:21.160 --> 0:06:24.479 There's definitely a technology to discussion to have here. You know, 0:06:24.640 --> 0:06:27.840 one of the interesting parts of Qualcomm, or the report 0:06:28.360 --> 0:06:32.280 that Qualcomm was Qualcom was interested in buying some all 0:06:32.320 --> 0:06:36.000 of Intel, is that they had made inroads themselves into 0:06:36.000 --> 0:06:40.240 the PC market where Intel had once been dominant. And 0:06:41.160 --> 0:06:43.800 you know, a theoretical idea that came out of that is, 0:06:43.839 --> 0:06:45.800 why would Qualcom want to buy Intel if they're doing 0:06:45.880 --> 0:06:48.159 so well on their own, But you could flip that 0:06:48.200 --> 0:06:50.839 on its head and say, the story of twenty twenty 0:06:50.880 --> 0:06:55.039 four has been about the AIPC PC laptops that have 0:06:55.200 --> 0:06:57.480 new chips in them that are not made by Intel. 0:06:57.760 --> 0:06:59.880 So when's Intel going to come to the races on that? 0:07:00.320 --> 0:07:02.680 And in fact, a number of our audience, but also 0:07:02.760 --> 0:07:04.640 like executives in the world of tech, have asked me 0:07:04.800 --> 0:07:07.599 to ask Pat about that issue, because if Intel's so 0:07:07.640 --> 0:07:10.120 good at PC chips, why is it not doing the 0:07:10.200 --> 0:07:13.640 latest thing? These are technology questions, but I think we 0:07:13.640 --> 0:07:17.680 should probably be explicit. Was Intel or was Intel not 0:07:17.760 --> 0:07:20.480 approached by some of its peers about an acquisition? 0:07:20.840 --> 0:07:21.920 Simple stuff. 0:07:23.320 --> 0:07:27.240 Ed In just three minutes, we should be getting Apple's 0:07:27.560 --> 0:07:28.360 earnings reports. 0:07:28.640 --> 0:07:29.200 What goodness? 0:07:29.840 --> 0:07:33.560 What should people be watching hump for for the iPhone? 0:07:33.720 --> 0:07:39.120 Yeah, iPhone sixteen and China very simple, leading product, most 0:07:39.120 --> 0:07:42.240 important market, and that's probably what it will come down to. 0:07:42.600 --> 0:07:45.600 Will those iPhone sixteen's are they flying off the shelves? 0:07:46.280 --> 0:07:49.920 So we've learned in the newsroom a really painful lesson 0:07:49.960 --> 0:07:54.160 this year, which is treat the third party data with caution. 0:07:54.720 --> 0:07:56.320 You guys will probably have done it on the show 0:07:56.400 --> 0:07:59.760 right these stories about some of the market researchers, who 0:07:59.840 --> 0:08:02.560 is you report saying the first six weeks of iPhone 0:08:02.600 --> 0:08:05.240 sixteen sales are down relative to the first six weeks 0:08:05.240 --> 0:08:09.240 of iPhone fifteen according to xyz data set Counterpoint research 0:08:09.360 --> 0:08:09.680 is one. 0:08:10.360 --> 0:08:12.400 But there's also evidence that in recent. 0:08:12.200 --> 0:08:15.720 Quarters, Apple's actual data has proven the third party data 0:08:15.720 --> 0:08:18.840 to be off the mark a little bit. And there's 0:08:18.880 --> 0:08:23.480 a very interesting phenomena happening in China. Apple won't make 0:08:23.520 --> 0:08:27.040 its latest generf generative AI tech available in China for 0:08:27.080 --> 0:08:30.120 some time until the regulator says it's okay. But there 0:08:30.160 --> 0:08:32.720 is evidence that the consumer in China is buying the 0:08:32.760 --> 0:08:36.440 iPhone anyway in anticipation they might have access at some 0:08:36.559 --> 0:08:39.520 point to like the latest and greatest software, which I 0:08:39.520 --> 0:08:42.679 think is so interesting. Right, You're buying something without having 0:08:42.800 --> 0:08:44.960 been able to experience it and like look at it 0:08:45.080 --> 0:08:46.640 because it's not available in that market. 0:08:47.440 --> 0:08:50.000 Yeah, okay, So okay, let's talk a little bit about China. 0:08:50.120 --> 0:08:52.040 Just thirty seconds here, ed because these numbers are coming 0:08:52.040 --> 0:08:55.280 out in thirty seconds. Sure, what are the numbers we 0:08:55.360 --> 0:08:57.560 need to see in China indicate that that Apple is 0:08:57.559 --> 0:09:01.000 not losing market share to Samsung show me and the. 0:09:01.120 --> 0:09:04.199 Like numbers or commentary, so they'll report something for Gray 0:09:04.320 --> 0:09:06.960 to China. They won't be as sort of candid about 0:09:07.320 --> 0:09:10.000 category specific stuff, but on the call they would tell 0:09:10.080 --> 0:09:13.520 us how they think they do or rank in that market. 0:09:14.400 --> 0:09:16.640 Okay, we're going to get numbers from Apple in just 0:09:16.720 --> 0:09:21.280 about fifteen seconds. Going into today, shares for the year 0:09:21.800 --> 0:09:25.440 up seventeen percent, so underperforming the S and P five 0:09:25.520 --> 0:09:29.600 hundred shares today down one point eight percent. We are 0:09:29.600 --> 0:09:33.079 getting a slew of earnings continuing and now we're getting 0:09:33.080 --> 0:09:36.719 Apple results. Bear with me while I bring these up. 0:09:36.920 --> 0:09:40.320 Fourth quarter revenue meets estimates coming in at ninety four 0:09:40.320 --> 0:09:43.240 point nine three billion dollars. Estimates were for ninety four 0:09:43.240 --> 0:09:46.280 point three six billion dollars. As we look at the 0:09:46.440 --> 0:09:49.400 different parts of the reportable categories, services revenue for the 0:09:49.400 --> 0:09:52.360 fourth quarter coming in below estimates, twenty four point nine 0:09:52.400 --> 0:09:55.320 to seven billion. Estimates for twenty five point two seven 0:09:55.600 --> 0:09:59.559 billion fourth quarter earnings per share coming in way below 0:09:59.679 --> 0:10:02.040 estimate and are not excuse me, not below estimates below 0:10:02.040 --> 0:10:04.319 what they were last year ninety seven cents versus one 0:10:04.360 --> 0:10:07.880 dollar and forty six year over year fourth quarter revenue 0:10:07.920 --> 0:10:10.280 once again beating estimates, coming in at ninety four point 0:10:10.360 --> 0:10:13.480 nine three billion dollars. Estimates were for ninety four point 0:10:13.480 --> 0:10:16.960 three six billion dollars. Apple also declaring a cash dividend 0:10:17.200 --> 0:10:18.960 of twenty five cents per share. 0:10:19.400 --> 0:10:21.600 That's I'm not done that much. 0:10:21.679 --> 0:10:25.719 Okay. Let's look at fourth quarter iPhone revenue coming in 0:10:25.880 --> 0:10:28.160 above estimates at forty six point twenty two billion. 0:10:28.240 --> 0:10:28.560 Estimate. 0:10:28.559 --> 0:10:31.520 Weres for forty five billion dollars, fourth quarter Greater China 0:10:31.559 --> 0:10:34.760 revenue coming in just shy of estimates fifteen point zero 0:10:34.760 --> 0:10:38.560 three billion dollars. Estimates are for fifteen point eight billion. 0:10:38.240 --> 0:10:42.760 Dollars, and their fourth quarter Wearables, Home and Accessories slightly 0:10:42.800 --> 0:10:46.640 missing estimates nine billion dollars. The MAC revenue seven point 0:10:46.640 --> 0:10:49.880 seventy four billion, right in line with estimates, and iPad 0:10:49.920 --> 0:10:53.080 revenue slightly below estimates six point ninety five billion versus 0:10:53.200 --> 0:10:57.880 estimates of seven billion. The red headline crossing the Bloomberg 0:10:57.960 --> 0:11:01.600 terminal is that the Apple fourth quarter Greater China revenue 0:11:02.000 --> 0:11:05.920 missed estimates. It's fifteen point oh three billion versus estimates 0:11:06.120 --> 0:11:07.360 of fifteen point eight billion. 0:11:07.520 --> 0:11:11.040 Yeah, that was a that's a pretty significant miss right there. 0:11:11.480 --> 0:11:13.559 Seeing shares bounce around a little. They were higher when 0:11:13.559 --> 0:11:16.400 these numbers came out. Now they're down about one point 0:11:16.520 --> 0:11:19.640 three percent. Some of these certainly worth repeating. Fourth quarter 0:11:19.679 --> 0:11:22.880 iPhone revenue coming in above estimates at forty six point 0:11:22.880 --> 0:11:25.600 two to two billion dollars, fourth quarter revenue coming in 0:11:25.600 --> 0:11:29.080 at ninety four billion, ninety four point ninety three billion 0:11:29.120 --> 0:11:32.640 dollars above estimates, but fourth quarter Greater China revenue coming 0:11:32.640 --> 0:11:34.240 in below estimates. I do want to go back to 0:11:34.400 --> 0:11:37.200 Ed Ludlow, who's standing by in San Francisco. He's only 0:11:37.240 --> 0:11:40.320 had two minutes to look at these numbers China. That 0:11:40.400 --> 0:11:41.640 certainly seems like a story here. 0:11:41.800 --> 0:11:44.920 Ed, Yeah, I mean you want wonderful summary. I mean, all, 0:11:45.040 --> 0:11:47.360 how do you follow that? But I think that that's 0:11:47.400 --> 0:11:51.439 the simple calculus. Overall iPhone revenue beat right, Greater China 0:11:51.559 --> 0:11:54.640 slightly missed. It's not until the analyst call that you 0:11:54.679 --> 0:11:58.679 get the commentary. It's usually from the CFO rather than 0:11:58.679 --> 0:12:03.040 Tim Kirk that says, actually, by category or products are 0:12:03.080 --> 0:12:06.079 be it iPhone, mac wearables, here's how we did, and 0:12:06.240 --> 0:12:09.920 in that explanation we will find out did iPhone grow 0:12:09.960 --> 0:12:14.360 in China or not? It's interesting, you know the miss 0:12:14.440 --> 0:12:19.120 is it's a miss, you know, it's slight. The only 0:12:19.160 --> 0:12:21.120 other thing that I point out is that you have 0:12:21.120 --> 0:12:23.520 to read between the lines a bit. And the Apple 0:12:23.559 --> 0:12:26.640 once again has a new record high of number of 0:12:26.679 --> 0:12:29.160 installed devices around the world. That's the number of people 0:12:29.400 --> 0:12:33.680 with an Apple hardware product or device somewhere in the world. 0:12:34.080 --> 0:12:37.439 It's growing. But where in particular, which product line. That's 0:12:37.520 --> 0:12:38.559 kind of the question next. 0:12:38.640 --> 0:12:41.600 But that's an important number because increasingly, as people hold 0:12:41.640 --> 0:12:43.760 onto these devices for longer, the more of them that 0:12:43.800 --> 0:12:46.319 are out there, the more people are spending on services 0:12:46.480 --> 0:12:50.640 like Apple TV plus, Apple Music, iCloud and the like. 0:12:50.960 --> 0:12:53.199 I know, I'm certainly not buying new devices right now, 0:12:53.200 --> 0:12:55.280 but I'm still spending each month quite a bit on 0:12:55.360 --> 0:12:57.960 Apple and Apple loves that it's a high margin business. 0:12:58.520 --> 0:13:00.680 Yeah, the timing of this very interesting. 0:13:00.720 --> 0:13:02.880 So in the release they talk about the rollout of 0:13:02.920 --> 0:13:07.040 Apple Intelligence, which is staggered. As Mark German has reported 0:13:07.080 --> 0:13:11.520 here at Bloomberg News. Apple Intelligence is the company's proprietary 0:13:12.520 --> 0:13:15.760 AI or generative AI offering. It's a suite of software 0:13:15.800 --> 0:13:20.200 tools in iOS that can do various things. This past week, 0:13:20.280 --> 0:13:23.000 I was offered to upgrade MYOS to eighteen point one. 0:13:23.320 --> 0:13:26.120 Then I was put on a wait list for Apple Intelligence. 0:13:26.440 --> 0:13:29.160 That's all lot preamble to say, we don't know anything 0:13:29.160 --> 0:13:32.640 from this release. And you noted that services missed right, 0:13:33.080 --> 0:13:35.080 that all this work they put in AI and all 0:13:35.120 --> 0:13:38.760 of the delay translates to consumers spending more money within 0:13:38.800 --> 0:13:41.520 the iOS or Apple ecosystem. And I know that many 0:13:41.520 --> 0:13:44.840 analysts investors are going to be listening carefully for that. 0:13:45.559 --> 0:13:47.160 Let's go through some of these numbers again. If you're 0:13:47.200 --> 0:13:50.120 just joining us. Apple shares down about one point seven 0:13:50.200 --> 0:13:53.440 percent in the after hours. They reported just about four 0:13:53.520 --> 0:13:56.640 minutes ago, five minutes ago, our fourth quarter revenue came 0:13:56.679 --> 0:14:00.000 in above estimates at ninety four point ninety three billion dollars. 0:14:00.080 --> 0:14:03.320 Quarter iPhone revenue came in above estimates at forty six 0:14:03.360 --> 0:14:05.880 point two two billion dollars. That's a billion dollars more 0:14:06.200 --> 0:14:09.400 than what analysts were expecting. Fourth quarter greater China revenue, 0:14:09.400 --> 0:14:12.160 though coming in below estimates, Does that mean the iPhone 0:14:12.160 --> 0:14:14.000 sixteen is a huge success ad. 0:14:15.160 --> 0:14:17.760 You have to read between the lines again until an 0:14:17.800 --> 0:14:21.080 executive says it definitively on the call, you don't know. 0:14:21.480 --> 0:14:23.280 But there were other areas that were a bit of 0:14:23.320 --> 0:14:27.760 a surprise, right. iPad was a surprising miss despite having 0:14:27.800 --> 0:14:29.040 released new generations. 0:14:29.080 --> 0:14:29.760 So take that. 0:14:30.200 --> 0:14:32.560 MAC revenue came in at one hundred million more than 0:14:32.640 --> 0:14:36.800 the same period a year ago, or maybe sequentially in 0:14:36.840 --> 0:14:40.000 line with expectations, so that's not giving a surprise contribution. 0:14:40.360 --> 0:14:44.000 What's left we know revenue services revenue missed, maybe iPhone. 0:14:44.200 --> 0:14:46.760 Piecing it together, well, how much of the iPhone sixteen 0:14:46.880 --> 0:14:50.680 was sold in this most recent quarter? Like, do we that? No, 0:14:50.800 --> 0:14:52.320 we do in terms of availability. 0:14:53.520 --> 0:14:55.960 So in terms of availability, I'm trying to go through 0:14:56.000 --> 0:14:57.480 the tank, you and the thing to look at the 0:14:57.520 --> 0:15:00.280 inventory number because that's the next place that I can. 0:15:00.320 --> 0:15:02.800 I can't find it yet because to me with another one, 0:15:02.840 --> 0:15:03.640 and I'll try catch. 0:15:03.480 --> 0:15:04.840 Out, Okay, So I'll give you some time to look 0:15:04.840 --> 0:15:07.120 for that. The reason I always am interested in that 0:15:07.240 --> 0:15:09.840 is because they announced this thing in September, goes on 0:15:09.920 --> 0:15:13.320 sale a few weeks later. The quarter ends after only 0:15:13.360 --> 0:15:16.840 a couple weeks after that, iPhone goes on sale. In 0:15:16.920 --> 0:15:19.480 some years Emily, they haven't even been able to put 0:15:19.520 --> 0:15:22.400 the new phone on sale before the quarter of learning. 0:15:22.640 --> 0:15:25.680 So it's just a question of okay, how many people 0:15:25.720 --> 0:15:28.480 were buying the old iPhone versus the new iPhone right 0:15:28.520 --> 0:15:31.360 here as an indication of how well is that new 0:15:31.400 --> 0:15:32.040 model selling. 0:15:32.360 --> 0:15:35.240 I'll also add Tim that we are seeing Apple stock 0:15:35.960 --> 0:15:39.960 extending some losses. You know, nothing huge here, and it is. 0:15:40.120 --> 0:15:42.520 It has only been six minutes since Arnais came out, 0:15:42.560 --> 0:15:45.000 but we do now see shares of Apple down about 0:15:45.000 --> 0:15:49.000 one point seven percent, despite the fact that fourth quarter 0:15:49.080 --> 0:15:53.560 revenue met estimates and was still up six percent year 0:15:53.680 --> 0:15:57.080 over year, and also that service revenue up twelve percent 0:15:57.160 --> 0:15:59.960 year over year but did slightly miss estimates. 0:16:00.640 --> 0:16:02.520 Taking a look now at our live blog. If you 0:16:02.520 --> 0:16:05.040 have access to this on the Bloomberg terminal, do check 0:16:05.080 --> 0:16:09.080 it out our own. Mark German, adding to what Ed 0:16:09.160 --> 0:16:11.760 said that iprad is a surprising miss, coming out just 0:16:11.800 --> 0:16:13.680 shy of seven billion, despite the release of that new 0:16:13.720 --> 0:16:16.840 iPad Pro and iPad Air models earlier this year. That 0:16:16.840 --> 0:16:19.560 new iPad Mini released this month unlikely to help materially. 0:16:20.000 --> 0:16:22.560 Mark Kerman also writing that the Mac came in with 0:16:22.600 --> 0:16:25.800 about one hundred million dollars annual revenue increase, meeting Wall 0:16:25.800 --> 0:16:28.320 Street estimates of seven point seven billion dollars. New Max 0:16:28.360 --> 0:16:30.760 released this week should help that product segment in the 0:16:30.880 --> 0:16:32.920 current quarter, and I want to go back to you. 0:16:33.000 --> 0:16:36.200 I know you've been diving into that ten Q speed 0:16:36.240 --> 0:16:38.720 reading it. What sticks out to you from there. 0:16:39.480 --> 0:16:42.120 Well, not the inventries. They're basically very similar to the 0:16:42.160 --> 0:16:44.440 same period a year ago. So I'm going to spend 0:16:44.440 --> 0:16:48.120 a bit more time pondering that. You know, a story 0:16:48.320 --> 0:16:51.440 of the megacaps so far in twenty twenty four has 0:16:51.480 --> 0:16:56.000 been sweetness for shareholders and this is more dry stuff. 0:16:56.400 --> 0:16:59.280 But you know that your audience on this show, whether 0:16:59.320 --> 0:17:02.080 they're listening or watching, there are so many different types 0:17:02.120 --> 0:17:04.520 of Apple investors out there where the role of a 0:17:04.560 --> 0:17:08.640 dividend or shareholder returns is really important. And so whatever's 0:17:08.640 --> 0:17:12.560 happening with any given products line or category, Remember this 0:17:13.000 --> 0:17:16.040 Apple is a cash machine twenty seven billion dollars of 0:17:16.080 --> 0:17:20.080 operating cash flow generated in the quarter. Hence they're able 0:17:20.119 --> 0:17:23.320 to return relatively the same twenty nine billion dollars back 0:17:23.320 --> 0:17:27.000 to investors. The differences is that in prior quarters, when 0:17:27.040 --> 0:17:29.920 we've seen a sweetener like a divvy or a boost 0:17:30.280 --> 0:17:34.119 into a buyback program, that's been a great thing for investors, 0:17:34.119 --> 0:17:38.119 they've responded positively. On EM's note, just then, the stock 0:17:38.200 --> 0:17:41.120 isn't really responding to that, right, there isn't some sort 0:17:41.160 --> 0:17:43.960 of relief in that sense, knowing that the bar too 0:17:44.040 --> 0:17:44.520 is high. 0:17:44.880 --> 0:17:46.720 Yeah, and you bring up a really good point that 0:17:47.040 --> 0:17:48.879 I know you said it's dry, but it's not as 0:17:48.960 --> 0:17:50.679 dry to me. I interview a lot of I know, 0:17:51.040 --> 0:17:52.159 full managers. 0:17:52.480 --> 0:17:53.960 This is a nice little mix for you. 0:17:53.680 --> 0:17:58.440 You know, people always talk about cash rich companies and 0:17:58.480 --> 0:18:01.679 how those kinds of companies are despite what the macro 0:18:02.160 --> 0:18:06.160 economic environment is doing. If you buy a large company 0:18:06.200 --> 0:18:09.480 that has a big, strong balance sheet, no matter what 0:18:09.560 --> 0:18:12.720 the FED does, no matter what other earnings do, you'll 0:18:12.760 --> 0:18:15.560 be safe. And I think that sentiment has really carried 0:18:15.560 --> 0:18:18.359 these mega tex stocks this year, all the volatility. 0:18:19.359 --> 0:18:22.399 It's important because again there's a badge of honor for 0:18:22.480 --> 0:18:24.480 many that comes with holding Apple stock, whether you're the 0:18:24.520 --> 0:18:26.800 smallest retail investor or the giant on Wall Street. 0:18:26.840 --> 0:18:28.280 That's been the case for so long. 0:18:29.320 --> 0:18:32.119 But at the end of the day, you have in 0:18:32.160 --> 0:18:35.680 the world of technology, two main operating systems for smartphones 0:18:35.760 --> 0:18:38.879 iOS and the iPhone, and then Android, where a number 0:18:38.880 --> 0:18:42.399 of handset makers are involved. And it comes back to 0:18:42.440 --> 0:18:44.480 what's happened to Apple, and the cores are just gone. 0:18:44.760 --> 0:18:47.360 It grew in every market around the world apart from 0:18:47.359 --> 0:18:50.800 one greater China. Tim's question is did the iPhone do 0:18:50.960 --> 0:18:54.920 great well? The question outstanding is as important as the 0:18:55.000 --> 0:18:57.360 data that we've related to the audiences we don't know. 0:18:57.880 --> 0:18:59.600 Let us answer the question on the call. 0:19:00.080 --> 0:19:02.720 The iPhone grow in China and all of these things 0:19:02.760 --> 0:19:05.240 investors take into account just as much as they do 0:19:05.560 --> 0:19:07.200 the sweeteners that have put before them. 0:19:07.320 --> 0:19:10.639 All Right, We're going to hear from Apple executives on 0:19:10.680 --> 0:19:11.560 the call a little later. 0:19:11.760 --> 0:19:11.840 ED. 0:19:12.280 --> 0:19:17.879 It's notable because it is I believe Luka Maistri's last 0:19:17.880 --> 0:19:21.399 earnings call at Apple. He's going to be passing the 0:19:21.440 --> 0:19:25.840 torch to his top deputy when the calendar turns to 0:19:25.960 --> 0:19:30.480 twenty twenty five. Is that something that is meaningful to 0:19:30.560 --> 0:19:32.439 you in terms of how this There's not a lot 0:19:32.480 --> 0:19:35.239 of executive turnover at this company. These people have been 0:19:35.240 --> 0:19:38.000 there for years. Can text you like that for us? 0:19:38.320 --> 0:19:41.280 On the one hand, Kevan Perek, who's you're like right, 0:19:41.359 --> 0:19:43.600 his deputy and steps up to being CFO, is a 0:19:43.640 --> 0:19:47.640 known quantity because he's been there and this was telegraphed. 0:19:47.960 --> 0:19:50.640 But I've often posted in the Bloomberg Top Life blog 0:19:50.680 --> 0:19:53.600 it's the blog we run during these big moments that 0:19:54.080 --> 0:19:57.439 it's often my Strey rather than cook that gives you 0:19:57.520 --> 0:20:00.800 the information that we'd consider news. It is some more 0:20:00.840 --> 0:20:04.760 granular detail about performance of a specific product in a 0:20:04.800 --> 0:20:09.720 specific market, like iPhone in China. He is widely seen 0:20:09.760 --> 0:20:12.360 as being a master of the margin, right you think 0:20:12.359 --> 0:20:15.320 about it, talked about cash generation but the bottom line 0:20:15.359 --> 0:20:18.439 in general and Apple being a highly profitable company with 0:20:18.600 --> 0:20:21.439 just insane amounts of cash on the balance sheet. You know, 0:20:21.520 --> 0:20:24.280 Luke and Maistreet has been a big part of that story. 0:20:24.920 --> 0:20:28.359 Does can Correct have the same prowess in that field? 0:20:29.000 --> 0:20:31.879 It takes some quarters to find out, but you know, 0:20:32.000 --> 0:20:34.480 when you're a journalists and an investor, you become familiar 0:20:34.480 --> 0:20:37.240