Speaker 1: Well, let us talk about Apple cold the results just
Speaker 1: barely beating analysts estimates. Here to talk about Apple's results
Speaker 1: and mall we have Tom Giles, Bloomberg take editor and
Speaker 1: Tom guidance from Apple. Can we fill in the gaps here?
Speaker 1: What are the next couple of quarters gonna look like? Yeah, well,
Speaker 1: thanks for having me. The big takeaway was that the
Speaker 1: current quarter they as you said, there's not gonna be
Speaker 1: any guidance. But what what what they did say is
Speaker 1: that sales growth will accelerate in the current quarter. Now
Speaker 1: it's a pretty low bar two percent that we had
Speaker 1: in the most recent quarter, but we will see an
Speaker 1: increase in the pace there. Uh so an important and
Speaker 1: and you know the shares did rise in late trading,
Speaker 1: So the market took away that Apple so far is
Speaker 1: weathering the downturn relatively well. Um. And they even though
Speaker 1: they missed on a couple of their different products, they
Speaker 1: missed analysts estimates, they did uh surpass Wall Streets projections
Speaker 1: on the iPhone, which is their biggest product, all important product,
Speaker 1: and they were able to um uh, they were able
Speaker 1: to uh surpass the expectations. What they said there was
Speaker 1: that they're not seeing a rollback in demand for the iPhone,
Speaker 1: and in fact, they still continue to suffer from supply constraints. Um,
Speaker 1: so they're not seeing at this point that recession fears
Speaker 1: and inflation pressures here in the US and elsewhere are
Speaker 1: affecting demand for that. You know, as Tim Cook put
Speaker 1: it on the call, we really didn't test the outer
Speaker 1: limits of of demand for the phone just because there
Speaker 1: worthy supply constraints. Is this company still so heavily reliant
Speaker 1: on the phone that it's kind of make or break
Speaker 1: when you're talking about the iPhone? What about the Max?
Speaker 1: What about some of the things that are purchased through
Speaker 1: the apps or or wearables? I mean, is there a
Speaker 1: diversification in the portfolio to absorb any disappointment with iPhone sales?
Speaker 1: Or is that not even a part of the story
Speaker 1: here there it's really a company that's about a phone. No,
Speaker 1: it is definitely part of the story. Um, they have
Speaker 1: become overly reliant on it. This is a theme that
Speaker 1: analysts and investors have come back to time and time again. Um,
Speaker 1: the Mac. You mentioned the Mac. The they missed projections
Speaker 1: on the map on Mac sales. Again, they were tripped
Speaker 1: up by supply constraints there UM, in particular the lockdowns
Speaker 1: in Shanghai, China. We're a real issue when it comes
Speaker 1: to Mac production, So UH, they weren't able to you know,
Speaker 1: pull it out on that side of things. UM iPad
Speaker 1: as well services. UM came in a little bit below
Speaker 1: Projections and services in a really important area for Tim
Speaker 1: Cook right now. He is targeting, you know, that to
Speaker 1: become a very big part of their overall sales. This
Speaker 1: is this is the kinds of things that you buy
Speaker 1: in the app store, this is Apple TV, etcetera. He
Speaker 1: spent time on the call talking about how their their
Speaker 1: new shows, their new shows are critically acclaimed, their winning awards, UM,
Speaker 1: and they are doing everything they can to make Apple
Speaker 1: services and attractive product. Came in a little bit low
Speaker 1: on the revenue side. In that regard, he talked about
Speaker 1: digital advertising softness. He talked about UM, which is a
Speaker 1: theme that we've seen with Meta, It's a theme we
Speaker 1: saw with app Alphabet UM. Digital advertisers are really concerned
Speaker 1: about UM pullbacks and consumer spending and they are tightening
Speaker 1: their marketing budgets. So that's that that UH, is a
Speaker 1: factor that affected Apple in in the most recent quarter.
Speaker 1: A couple other things of note. Foreign exchange headwinds were
Speaker 1: an issue. UM. The supply as I said before, the
Speaker 1: UH supply chain constraints UH. The good news there UH
Speaker 1: lucam history. The CFO said, those are going to abate
Speaker 1: in the current quarter. They're not going to be as
Speaker 1: bad as they were in the most recent quarter. We'll see.
Speaker 1: Tim Cook was talking about investing through downtowns as well.
Speaker 1: It's a strategy that he says has worked for them
Speaker 1: in the past, but also about being deliberate about where
Speaker 1: they invest. Does he mean services when he's talking about this,
Speaker 1: what is he speaking to you specifically? Particularly we're talking
Speaker 1: about a slowdown in UH in in hiring UM. That's
Speaker 1: an area that the big tech companies UM have invested
Speaker 1: heavily in, and one after another, Apple included are tapping
Speaker 1: the brakes on the pace at which they hire. Their
Speaker 1: being more strategic, more deliberate. Speaking of the hiring a story,
Speaker 1: I'm wondering where they are with respect to remote working
Speaker 1: and allowing their employees. I remember Cook at one point
Speaker 1: in the pandemic kind of pounding the table saying it's
Speaker 1: important for this culture to have everyone in house. Have
Speaker 1: they moved away from that thinking. There's there's certain there
Speaker 1: are certain products that Apple puts out that where you
Speaker 1: really need people in the office where you need collaboration.
Speaker 1: When you're working on a piece of hardware, which is
Speaker 1: which is a big part of the Apple's revenue base. Uh,
Speaker 1: you really want people in a room together collaborating working
Speaker 1: on that software. There's a lot more flexibility. Tim Cook
Speaker 1: has said he wants people uh back in the office.
Speaker 1: Not every day. Uh, but that's certainly something that they
Speaker 1: that they have been asking for and some employees are
Speaker 1: chasing at it. Uh go quickly. Um. Yeah, look, we
Speaker 1: just got shares off of leaving in percent today. What
Speaker 1: analysts saying about the outlook twenty seconds? Yeah, right now.
Speaker 1: The immediate response to the results was a very positive one. Um,
Speaker 1: and will look for analyst reports tomorrow to see what
Speaker 1: people think after the current quarter. All right, Tom, stuff
Speaker 1: always a pleasure. Thanks for being with us, Tom Giles.
Speaker 1: There he is Bloomberg's tech editor, joining us from San
Speaker 1: Francisco here on Daybreak Asia