Apple reports third quarter results | Hacker News Reader

Apple reports third quarter results

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130 pointsmfiguiere276 comments

Pretty good considering the level of R&D that went into pushing their new ARM M2 platform across their entire computing line.

We just started buying M2 Macs at work, and oh boy, they are lightning fast, robust refined HW and the battery life is incredible. It’s a check-mate for the personal computing industry, pending they get their enterprise MDM features in shape (ie Intune) and get more apps ported to macOS.

For those wondering, just in the last few months you can now bind a M2 Mac to InTune and remotely manage most things. You can’t login to the system with Office365 email yet (coming soon), however you can block personal AppleIDs, push a managed AppleID that uses Office365 SSO without any third-party plugins, and remotely track every device using FindMy. And yes since it supports InTune you can push and deploy endpoint protection and company apps.

The M2 seems incredible. It is the first thing in a long time that has tempted me to try out a Mac. The price is high, but is the performance worth it? 32GB of unified memory would be nice.

I bought the 13inch m2 air a few months back and it's awesome. Super sleek design and feel, awesome keyboard, no touchbar, and also magsafe. It's really good. I actually hate MacOS and use a framework for 60% of my day (my work machine), but I have to admit the m2 is just a pleasure. I've used Macs extensively for years because that's what most companies provide for software hires, but the m2 air was the first Mac I've ever purchased with my own money, and I don't regret it.

> no touchbar

I actually liked it. Too bad it’s an evolutionary dead end and never made it to the desktop keyboards.

And I even liked the one without an ESC key.

take a look at apple’s return policy. you’re invited to take it for a test drive, just don’t treat it like a rental car.

Or if you're near an Apple Store, go in and ask if you can play around - if they'r not busy they'll often let you download stuff onto the demo machines, etc. They can easily reset them.

And then buy a refurbished one on the Apple Card to save a bit of cheddar™.

https://www.apple.com/shop/product/FNWE3LL/A/refurbished-16-...

I think it is, definitely. Have recently upgraded and it's immediately noticeable from the old Intel-based Macs.

Much improved compute speed + battery life, barely noticeable battery drain. I'm a very happy customer.

It’s impressive moving from an x86 Mac. From an x86 Windows, it’s mind-blowing.

I'm a career-long PC guy and had an excellent watercooled "Battlestation". I dipped my toe in with the M1 Mini, then an M1 Max MBP... and my battlestation now has like 1/4" of dust on it. It helps that most of my work anymore is AWS Console or VSCode, which does just fine on either.

There are a few games that it won't play, and..... that's about it. I'm still surprised at how quickly that happened. Worth a try, the M2 mini is cheap and easy, and the 8gb/256gb config was "enough" for me. I honestly didn't even notice the bump moving to the max 64gb/2tb. Doing it over, I'd probably do an Air with 16 or 24gb and be happy as a clam.

$0.02 :)

I'm happy as a clam on my 16gb M1 air. One hidden nice feature is how cheap and easy DIY repairs are. To date I've replaced my battery, monitor, and speakers (my lifestyle involves very rough handling of the machine), and everything about it was downright trivial, with cheap parts readily accessible and iFixit's walkthroughs very comprehensive.

> I've replaced my battery, monitor, and speakers...

I have many 2015 MacBook Pro's. All tour. All are almost permanently on. I replaced the battery on two machines last year. Speakers fine. Screen fine. Are you implying the relatively young M1 Air is so badly made, the speakers, monitors, AND battery have already needed to be replaced?

Read the sentence after the one you quoted in their comment and you'll see they clearly weren't blaming the laptop.

> Are you implying the relatively young M1 Air is so badly made, the speakers, monitors, AND battery have already needed to be replaced?

> my lifestyle involves very rough handling of the machine

No, it's not badly made, GP seems to be a huge exception. Please, read the full comment...

My M1 Air has been around since launch, have traveled with it just throwing inside bags, dropped a few times, sat on, etc., it still works 100% fine without any part swap, and looks almost pristine with just a tiny scratch on one of the edges from a drop.

The speakers didn't need to be replaced, that was a misdiagnosis on my part. But the process was easy (note for the readers: take a dry toothbrush to your speaker grilles if they ever start to sound off).

As for the battery, yeah ideally it'd last longer. But it's seen a lot of physical abuse, tons of full charge cycles, and generally wonked out charging setups so I can't get too upset.

For the monitor I'm honestly surprised it lasted as long as it did. It had been slammed around and crushed far more than what it should be able to take.

Interesting about the battery cycle. We have four original M1 and have the same issue. Apparently fixed on the subsequent hardware. As a matter of interest, did you also buy AppleCare, and use it? I don't know where you bought, but in the UK we get, effectively, 6 years 'fit for purpose' with such purchases. So, despite our slamming and crushing and touring, no replacements were needed until beyond 6 years of abuse.

I didn't get AppleCare. Looks like it'd be $70/yr, so I'd be $210 down (plus $100 for screen repairs). The battery was $130 [1], and the screen was $170 [2]. Comes out to a bit cheaper to DIY, and I don't have to give up access to my device to random technicians for an undisclosed period of time.

And how are you saying you've had M1 devices for 6 years? I don't think thats possible.

[1]: https://www.ifixit.com/products/macbook-air-13-a2337-late-20...

[2]: https://www.ebay.com/itm/385103589564

I could have been clearer. Such UK retail purchases are guaranteed for 6 years. So the point I'm making was that it was beyond 6 years before any of my 20 x 2015 mbp's failed in any aspect. The 4 x M1s had poor battery cycle count, very early on, and subsequently became unreliable when not powered. I use them in the office. I should add there would be a significant investment hurdle in new peripherals to move to the 'new' usb-c standard, hence holding on to the 2015 model. It's been nothing short of the most versatile laptop I've ever worked with. But it's time is almost up.

Also have a gaming desktop, and I just find myself using my macbook more. The macbook "feels" faster even though on benchmarks it's not. The mac just never misses a frame. No bugs, no random hangs, no noticeable delays doing anything.

The thing I find is, the arm Mac’s have way better feeling input. I don’t mean the hardware end but the latency from key stroke to appearing on screen.

I don’t think it’s just down to macOS because the Intel Mac’s didn’t feel as good. I think it’s likely down to the E cores and moving more of the IO handling processors onto the SoC (according to the Asahi folks anyway)

When my Intel Mac or AMD PC are under load, input struggles to fight with the things taking up resources. And that might be as simple as running Teams which is a resource hog at the most random times.

The Arm Macs never hit that issue for me even when I’m using aggressive loads.

Wow, that's good to know, because that's something I feel a lot when going from my Intel MBP to my AMD Windows laptop, especially important for accessibility (VoiceOver).

The 16gb configuration is an absolute powerhouse and seems to be fine ... RAM usage on macs, particularly ARM, is completely different to Windows.

My daily driver for the past couple of years has been the last Intel Macbook Pro with 32GB of RAM, but I just started using an M2 Mini in the last few weeks and with 16 GB of RAM it easily outperforms my older machine. A couple days ago, I realized I had a lot of stuff running without any signs of trouble at all, and I checked and was using only 14 GB of RAM with all of these apps open:

XCode, a Flutter project in Android Studio, a Rails project in Rubymine, a running server/database and 2 different mobile Simulators, Sublime, Safari, Chrome, and 3 different Firefox profiles.

I'm looking forward to picking up a new Macbook sometime in the next half a year, but for now I'm quite delighted when using my Mini which literally boots in less than 5 seconds.

Edit: just wanted to emphasize that sometimes my Macbook Pro struggles without even all of the above apps open.

A more extreme example—- I had an 8GB M1 Air that outperformed my 64GB Intel MBP that was less than a year old when I got the Air.

I've seen this a lot since the first m1 macs came out. While I'm not a hardware engineer my understanding is this:

For regular stuff that's not gpu intensive, it's not really much different to any other system in terms of how it uses ram. What's different is it has a ridiculously fast SSD and can swap without much performance hit.

Relying on your ssd for swap over getting enough memory in the first place seems like false economy to me.

> Relying on your ssd for swap over getting enough memory in the first place seems like false economy to me.

Important to keep in mind you won’t be able to replace that SSD without taking the machine to an Apple Store, and I’m not even sure they can replace the SSD without replacing the motherboard.

It’s more that the system itself is designed with the assumption of a super fast SSD, so it keeps way more in both ram and swap longer because it can swap fast enough to not be bottlenecked.

So almost no matter how much ram you get, in multi-application day to day workflows it’ll still use swap sometimes just because it can.

If your workflow involves something like giant objects in python or huge data structures that need to be in ram for performance, then you need the ram. But for use cases like 2,000 browser tabs plus photoshop plus Lightroom plus ten electron apps, mac osx “feels” like it has way more ram than an equivalent windows machine.

I don't believe I've yet seen any swapping on my 128G M2 studio but I also don't watch it like a hawk.

Being able to use swap is obviously beneficial, and if you're going to use it, it's better if it's fast.

But relying on it in place of regular RAM means you're just artificially shortening the life of your SSD - that's what I meant about "a false economy".

The machine "feeling" responsive isn't the point.

If all other factors are the same, the ssd wear on a machine that's used the ssd heavily for swap is going to be significantly higher.

> RAM usage on macs, particularly ARM, is completely different to Windows.

Using a Mac (or Linux) is deeply enlightening on how terrible the Windows user experience is. From random slowdowns to odd degradation patterns under load, it’s a very frustrating environment.

The only reason I can imagine people putting up with it is being unwilling to change - it takes work to move from Windows to Linux, but Macs are so well rounded, and now with their ARM CPUs, they can offer a much tighter integration between hardware and software.

And, for developers, it’s Unix from top to bottom (well… no X, but that’s another story). WSL is impressive, but it’s still a Linux bolted on a VMS-like OS.

One thing: considering how long Macs remain usable and the fact they are impossible to expand, it’s wise to get more memory than you need right now. Thinking on developing for cluster environments, I’d try to get a Mac with 32 or 64GB of RAM.

Yeah, but I want to play with LLMs. I think at least 32GB is a must even for something like falcon-7b.

For coding, I think ram gets a little overrated sometimes. Many projects would work fine on 16GB machines.

I'm about due to upgrade my 2017 Air, and it'll be to a 13" M2 Air. I would have done it already, but every time I price it out and see that they want to charge me $300 for 256 gigs of storage, I get a little offended and close the tab. As with every Apple purchase I make, it'll just come down to necessity, after the old one finally breaks. I'll hold my nose and pay the Apple tax, knowing that they think of me as a sucker, and they're probably right.

Yep you get an extra 25% GPU and an extra 256 gigs of storage for 300$.

Dammit price discrimination. I realize buying the cheaper option frequently is the better option with Apple prices but they really know how to price in storage anxiety.

One caveat! You must buy the M2 Pro (14" or larger, non-air) model to get 2 external screens.

We bought the wrong model to start with (13" M2 regular) and spent a week messing around with ours trying to get it to work with our 2 external displays when we rang Apple and they explained the difference between M2 Regular and M2 Pro. If you were buying one for yourself and budget was of no value, note the 13" and 14" are virtually the same physical size, and yet the design and technical capabilities of the 14" model are far and beyond ...

I wrote off the 13" as a loss and paid the difference myself, and now use it as a laptop at home :) Old design, yes, but it was such a nice piece of kit, no way I was gonna send it back to Apple!

I believe multiple screens are possible, even on the M1 MBA, you just need a docking station. Officially some don't support multiple screens, but there are mainstream solutions to this in the form of docking stations, just not sure why Apple doesn't even so much as hint that it's possible. It's a really unclear process!

It's possible only if you use a DisplayLink dock which requires using very specific dongles and installing specific third-party drivers. Our company already has 10-ish Dell Monitors with USB-C docks integrated, also Thunderbolt Dell docks, and neither of these work. There is no workaround.

If someone sells all that in one box, that’s still an easy solution.

What may not be widely known is that going from 256GB -> 512GB on M2-based machines also gives the SSD a huge speed bump, because 512GB is made up of 2x256GB chips with dual channels. Apple uses a single chip for 256GB configurations as a cost saving measure :(

For some use cases, you're even better off upgrading the base model M2 Air to 512GB vs upgrading the RAM from 8 to 16GB for a similar cost. This is because swapping suddenly becomes twice as fast.

…your description makes it sound like an upgrade, when actually the 256 configuration is just incompetent, a failure (or sabotage?) compared to the m1 models that worked properly without the expensive “upgrade”

    a failure (or sabotage?) compared to the m1 models that 
    worked properly without the expensive “upgrade”

I don't know the specifics, but the "lowest-capacity model has reduced performance because there's only a single chip instead of multiple chips being used in parallel" has been the case with SSDs for just about as long as they've been around and it is definitely not an Apple-specific thing.

My understanding is this: when the lowest-capacity model is only using a single chip, it's because the manufacturer is no longer making smaller sizes. For example, Apple's supplier(s) may not even be making 128GB NAND chips any more or may be discontinuing them soon, so they don't even have the option of using 128GB+128GB instead of 256GB.

I wouldn’t say “incompetent” if it still outperforms most x86 laptops you get for the same price.

Think of it as having one SSD fitted on the low end and two on all other models.

I’m on an M1 Max Mac Studio with 64gb of ram, it’s absolutey wonderful. Best workstation I’ve ever owned, bar none.

My understanding from benchmarks is that M1 and M2 have an excellent performance / energy consumption ratio. But in terms of raw performance, many Intel and AMD options can still deliver more. Another very interesting aspect of Apple's CPUs is that they offer a lot more performance than the competition for entry models. I cannot find anything that matches a Mac Mini M2. Sadly, Asahi does not support the M2 yet.

Regarding the Mac Studio, I had heard complaints about noisy fans. Can you comment on that?

I have never once heard the fans in my Mac Studio

Personally, I've never heard them. It's dead silent and i'm constantly running CPU intensive build pipelines and heavy CPU bound sql queries on it.

I love mine too

> The price is high, but is the performance worth it?

The numbers reflect Mac revenue down -24.2% YoY to date; if it's worth it, the market certainly hasn't voted with their wallets yet.

My M1 2020 is great for battery life, can’t imagine what these are like!

Those MDM functions have been available in other MDM platforms for ages. Microsoft has been consistently bad at Mac management, I think mostly it’s they don’t care.

Yeah there was Jamf, but especially at a small company ~5-10-ish people, having to deal with a provider where you have to go through a sales person is such a pain. They have minimum license buys and deprio you if you're small... Now that it's natively supported just between Apple and MS, you can on-board yourself in about 1 day without talking to anyone, and the whole platform costs $0 if you have Office365 E3 already.

Still no M2 iMac...

It’s going straight to the M3.

I’ve got a stack of 24 Mac minis, $600 a pop. With barely any power draw, and killer compute, it’s a steal.

curious what type of workload this would be good for?

Don’t know about them, but I build and manage clusters so I can build and manage clusters.

I have one of 4 RPi Zero Ws that right now runs a Docker Swarm with Hercules running VM370. And Squid proxy because I don’t want it polluting the Wi-Fi network for no good reasons.

The cluster is named Gibson.

Nodes in a distributed system, polling server for tasks.

but why mac for this? Is it really more cost effective than cheap linux boxes?

Performance per watt on an M2 is better than anything else you can buy. Barely generates heat. Considering for $600 each and I don’t need to spec anything out and can just drive to the Apple Store any time I need a few more and it’s really useful for a home business cluster.

Apple products are also:

- a checkmate to most 3rd party external monitors.

- a checkmate to the right of repair.

- a checkmate to the environment.

- a checkmate to most hardware terminology (they will create their own so you cannot compare products)

- a checkmate to modularity.

I really don't see how they're much worse than the average in their industry for almost any of those. Mac Mini, Studio, and Pro all want an external monitor, and that's essentially the same product lines any other company would sell an external monitor on. With the iMac being a smaller part of the line, they're maybe even more in line with the rest of the competition on monitors.

I literally own a Framework. I care about this stuff in general, but it's not like they're making equal or worse products. What Apple is getting out of their M# processor lines is insane. Honestly, it's questionable if my modular laptop is better for the environment with how much more power I have to spend charging it vs. most of Apple's options, given that I've generally kept using my laptops for 5-7 years at least.

I've thrown away way more e-waste on my fully modular external monitor Windows/Linux desktop than I've thrown away Apple products over the years. Modular essentially means "throw away some of your parts regularly". What else am I supposed to do with a 6 year old CPU and Motherboard? I could run it as a server, but I don't need to consume that power for anything really, so it just sits in a closet for years until I throw it out.

Anecdotally, I was between buying a M1 Macbook Air and a Framework 2 years ago. I'm already curious about upgrading my Framework to the new AMD mainboard/CPU set. I can almost promise you if I'd bought the M1 Air, I wouldn't even be considering an upgrade for another 2-3 years. Repair/upgradeability also makes it way easier to impulsively generate e-waste.

Because you keep editing in more stuff - I'm really not sure I can blame them on the "making new hardware terminology" line. It really doesn't seem like it's so you can't compare it. There's plenty of benchmarks comparing it. They clearly went to ARM because it got them a ton of compute power on very little power. Yes, it can't compare to an old Intel chip the same way, but there's plenty of folks pursuing this line, and it seems like it's been well worthwhile.

    a checkmate to most 3rd party external monitors.

Can you elaborate?

Don't question or think, just hates muha apple

Connect a 4K monitor or TV to a Mac.

The result is tiny widgets.

Still dont get it. Using a 4K LG display with a Macbook and everything works as intended. Whats your specific issue? What does "tiny widgets" mean?

Completely incorrect. Plenty of actual reasons to dislike Apple, no need to fabricate new ones.

I'm typing this on a 4K monitor connected to a Mac and everything is perfect.

I don't remember what the default behavior is when MacOS sees a new 4K monitor, but you can go into the display preferences and choose "Larger Text" (essentially, 2X UI scaling) or "More Space" (no scaling, "tiny widgets") or incremental noninteger scaling modes in between.

https://www.dropbox.com/scl/fi/dmin2flhod4rkqxfm494k/macos_d...

Does not that just result in a 1920×1080 resolution with low res text?

Try using the same screen on Linux, take a close picture of text and compare.

3rd party monitors have the HiDPI mode disabled.

I'm not sure Linux is the comparison point you want for "handles high resolution consistently with various monitors." I'm sure I could mess around with settings to get any behavior I want, but I've been wrangling multi-monitor high-res setups on Linux for over a decade and it's never been better than OS X's monitor handling. They both have plenty of issues.

I think I see the cause of confusion here.

After some googling, it looks like M1 (and I guess M2) Macs don't always expose HiDPI options for 3rd party displays. That sucks. WTF is Apple doing? I'm not sure if there are workarounds or what. I will research this before buying an Apple Silicon based Mac, that's for sure.

I have a Intel Mac (latest MacOS) and have never experienced this problem with a variety of 3rd party monitors over the years. So I didn't even realize this was an issue.

Additionally, I forgot that subpixel rendering is disabled by default. You can enable it with `defaults write -g CGFontRenderingFontSmoothingDisabled -bool NO` but I forgot that was a required step.

Well, apropos of anything else, I think they very deliberately "broke"/tweaked Display Stream Compression when they released the Pro Display XDR.

My cheesegrater Mac Pro with a beefy graphics card under Catalina, I was happily running 2 4K displays in HDR10, at 144Hz.

First beta of Big Sur, which came out with the Pro Display? I could drive them in HDR10 at 60Hz. 95Hz in SDR.

Was reproducible - by me, by many others.

Turn DSC 1.4 down to 1.2 on my monitors, and it got a bit better, HDR10 @ 75Hz, 120Hz SDR, IIRC.

That remained broken all through Big Sur, despite a huge number of reports.

Remained broken through Monterey too.

I believe it's fixed in Ventura, but I've since changed monitors.

Initially, people were wondering about the Pro Display's bandwidth and how it was doing 6K HDR and other USB connectivity, and it sure as hell seems like they messed with the DSC spec to make it happen, and 'screw other monitor owners'.

That's completely f'd up. Brings me one step closer to ditching Macs.

Honestly life has been turbulent the last few years and I just haven't had the energy to switch, even though I think everything I do at this point is easily doable in Linux anyway.

I have tons of issues hooking 4k monitors to my macbook but that is definitely not one of them.

> a checkmate to the environment

more than other personal computers/devices? how so?

In my experience Apple is the only electronics company to actually repair your product rather than discard a broken one and give you a new one where I live. With some repairs (usually just battery replacement), their products can last and be fully functional for nearly decades, and I often pass on my older devices to my family members. Yes, they are nearly impossible to repair yourself, but that's far from "checkmate to the environment" in my book.

Many of the "repairs" are discarding the motherboard and putting a new one.

Are they fully discarding it? Or just replacing it? I actually don't know the answer here, but I'd be surprised if they didn't have some refurb process for removing still-working parts of the mainboard and attached components.

From a turnaround and customer experience perspective, it makes sense to just swap the part and do the diagnostic later so that you avoid having to guess-and-check through the multitude of parts that could be broken.

What a nonsense. I had a few thinkpads in the past and if I had any troubles, their employee will come directly to my house the next working day and replace the broken part in my laptop. It is way better than the support Apple provides and also way better for environment, because unlike Apple, who makes the whole board as a single piece where you cannot replace anything, other laptop manufacturers make it possible to replace every part of your laptop independently (motherboard, ssd, memory, wifi, etc.).

My MBP is 5 years old at this point and I never needed to repair or replace anything.

Not everyone lives in US. In Europe most electronics is shipper back to the producer by mail for an indefinite amount of time (weeks to months) without any replacement while it’s gone. The item that comes back is usually a brand new replacement.

Even in the US - my dad used Thinkpads for his work exclusively and they regularly would just overnight him a new laptop and have him return the broken one under warranty. I don't think we ever had anyone come to the house/office to repair a laptop in person. This is the first time I've ever heard of a company doing that.

> In my experience Apple is the only electronics company to actually repair your product rather than discard a broken one and give you a new one where I live.

In my experience, no.

I had an MBA, battery charging chip was damaged. The laptop ran fine on AC, the battery was intact and fine - it just could not get a charge delivered to it.

Took it to Apple Store. Thought what might be reasonable... $200, maybe $300, parts and labor.

Genius comes back out with a quote for $900, to repair the charging circuit on what was an $1,100 laptop. First words, "Maybe we can talk about getting you set up in a new Mac today."

> - a checkmate to most 3rd party external monitors

Why? Their display is extremely niche and iMacs aren’t really a big deal these days either

I think it’s a jab at poor compatibility with 3rd party monitors.

M1 Max here

looking forward to the M3. just for the RAM at this point, for me nothing changes between 64gb - 128gb (aside from recent LLMs) but 128gb+ opens up additional applications for me,

aside from that I think incremental improvements in GPU and other special purpose processors will be intriguing in conjunction with the RAM boosts

I have a hunch that 2024 or 2025 chipsets will give more RAM to the neural engine for very fast AI output. Will we still be using "tokens per second" by then? Who knows. But I think there will be OS level inclusion of models by then and Apple machines will have a consumer level chipset leaps ahead of others, in mobile and laptop form factors.

Wdym? Jamf already fills the macOS enterprise MDM space.

Apple's hardware is second to none, really great time to be a mac user honestly. What would make it even better would be if the software caught up a bit. It feels like MacOS is in the in-between where it wants to be like iOS but it doesn't really feel like it's been done "right". Things like stage manager are a great example of this.

"We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions..."

What counts as a subscription? Because 1 billion feels incredibly high to me, like 1 out of 8 human beings has a paid Apple subscription?

Or multiple people have more than one. Think news and fitness+, or iCloud and Apple TV. If you don’t use more than 3 of their services subscribing to the bundle doesn’t make much sense

Haven’t read the release, but I imagine they’re referring to each component (i.e. iCloud, Music) as a separate subscription even if subbed to by the same user bundles notwithstanding.

I have their storage one and Apple TV+, does that count as 2?

Apple has s lot of services. It’s pretty easy to subscribe to a number of them.

I wonder if Apple One counts as one service due to being a bundle or four(+) services for the parts.

Willing to bet a subscription is a service/person pair, not a person. E.g., a person with iCloud and Apple TV+ is 2 subscriptions, and wouldn't be surprised if the Apple One (or whatever the bulk-subscribe thing is called) counts for all the individual services even if you only use say 3 of the 5 (or whatever the right counts are).

I think that's pretty clear? They didn't say they have a billion subscribers...

Never owned any Apple product so I have no clue what those subscriptions are, but could one person have several of them? And business phone?

Subscription is a pretty generic term and it means the same with apple as it does everywhere else.

The main subscription products are Music, TV, Arcade, Fitness, News, and extra iCloud storage.

Don't know how they count Apple One subscriptions for this, it bundles all six of those into one package.

I think AppleCare warranties are also sold as a subscription now, so those might be counted too?

They've subscriptions, not human beings. Some people have five subscriptions, some none.

> There are more than 1.46 billion active iPhone users worldwide as of 2023. [1]

Given that some people have more than one subscription (e.g. iCloud + Apple TV+), it actually doesn't seem that crazy. Especially when the cheapest subscription is only $0.99/mo for 50 GB of storage, which a ton of people probably have since it's incredibly easy to blow past the free 5 GB tier for your iPhone backup.

[1] https://www.demandsage.com/iphone-user-statistics/

That number still sounds crazy. They have to be counting third party subscriptions (from which they earn 30%) too here.

If it includes 3rd party 1B would not be high enough.

I doubt it.

I know that iPhones are popular, but I didn't fully appreciate how insanely popular they are until I'm seeing the numbers laid out like this.

Some of Apple’s “side businesses” like AirPods or the AppleTV only seem small in comparison. For any normal company they would be success beyond their wildest dreams.

The iPhone 13 mini has been called disappointing or a failure with analysis saying it only made up 3% of new iPhone sales during one quarter.

Apple planned to sell 300m phones last year.

I’d love to own a company selling 9 million copies a year of a $600 device. That’s $5.4 billion in gross revenue alone.

And that’s the “failed” model.

*mini

Fixed, thank you. I swear typing on my phone has gotten worse in the last two months.

iOS 17 is supposed to be much better. It’s like my phone knows it’s coming and is punishing me while it still has the chance.

I’ve never been so tempted to put a beta on my daily driver.

The backup seems to always try to backup more stuff to hit that limit forcing you to pay.

It's backing up the stuff on your phone. Like you'd expect a backup system to do. You also aren't forced to pay. I just turned off backups and instead use Google drive/photos.

My issue was that I want it to backup settings and contacts but not photos, it would then backup photos, using all the space and then I'd need to pay, it was difficult to undo that.

It's super easy. you just uncheck photos from the icloud page then go to icloud photos, hit select all and delete.

>> There are more than 1.46 billion active iPhone users worldwide as of 2023. [1]

That number is wrong.

The most recent reported Active iPhone user was from 2021 at 1B pass mark. And it took Apple more than 2 years to gain from 900M to 1B. I would not be surprised if Apple now has 1.1B Active iPhone user, but an extra 460M unit would be equal if not more than the total unit shipped since the announcement of 1B active user.

Apple also has over 2B Active Devices Number which include everything from iPhone, iPad to Apple TV.

Its incredible that "Services" brings as much revenue as Mac, iPad and wearables/accessories combined. I wonder what are the profit margins on services compared to traditional consumer electronics from Apple's point of view (they obviously need to sell both of them, since without hardware the software is not that useful but still it might incentivize them to subsidize the hardware like console makers in order to earn more from subscriptions).

I read somewhere a while ago (can’t recall the source) that services has way more profit margin than their hardware and it’s somewhere around 50%.

I'm not really surprised. The profitability of services are why everything ships with a service these days. Users obviously prefer "pay once and use forever" for things like heated seats on their car, but there is just too much money left on the table to offer that as an option. Depressing, but that's market forces for you.

Apple definitely got me on services with E2E encryption. I am happy to pay $0.99 a month to keep all my data in their cloud. I suppose I would be even happier if it was included for the life of my iPhone for free, though.

Keeping all your data on their cloud at least costs them every month, and cannot be feasibly offered as a lifetime purchase. A heated seat though?

Automotive leasing is basically “personal mobility-aaS” and it’s wildly popular.

Decomposing that lease cost into a bunch of small feature pieces is really about better price discrimination + fewer “SKUs”.

It's actually possible to do this. There's a thing which is called perpetual bonds, i.e. bonds which pay a fixed sum ad infinitum. Not surprisingly, they have a non infinite cost. (https://en.wikipedia.org/wiki/Perpetual_bond)

If you add a perpetual bonds with a coupon equal to the service charge, and the service price doesn't increase, you could create a perpetual "free" iCloud offering. However, I think the main problem there aren't that many people who are willing to pay for it.

It’s not possible because the point of services is that you can jack up the pricing any time.

Perpetuities are only possible because of non negative interest rates but inflation tends to be higher so they don’t pay out constant in terms of purchasing power

Just because you have a perpetual bond to pay for something doesn’t mean you have to stick with it. In fact, 100% of your capital is still there, so you can either migrate or go on-prem with what you still have.

You can also engineer your fund to generate enough to reinvest for inflation. Your fund, and your ability to pay more as prices increase, will grow, so you can absorb reasonable price increases and maintain a readiness to bail.

Why else do you think they’re fighting tooth and nail to preserve their 30% App Store cut?

Products: Net sales $60,584M - Cost of sales $39,136M = Gross margin $21,448M (35.4% of net sales)

Services: Net sales $21,213M - Cost of sales $6,248M = Gross margin $14,965M (70.5% of net sales)

https://www.apple.com/newsroom/pdfs/fy2023-q3/FY23_Q3_Consol...

taking 30% of other people's revenue is as close to free money as you can get.

It’s unbelievable really, I thought protection rackets and preventing shops from opening without payment would be illegal.

Unpopular opinion, but it’s not like these developers are getting nothing from Apple out of this.

Apple runs the modern digital mall. They provide the space, the signage, the discovery, they even handle payment for you.

Also, small indie developers are only being charged 15% until they exceed $1 million. So the 30% you always hear about are the big fish that can afford it anyway.

Hey I'm not saying apple isn't providing value here, just that they're making unbelievable margins on the app store. Just guessing here but would not be surprised if just the app store ads cover all the app store expenses and then the 30% is pure profit.

Credit card fees are somewhere between 0.5% and 2.8%

So when do we start complaining about Nintendo, Sony, Microsoft, Spotify, etc. etc?

They all take 30%+ margins on their platforms.

I've been complaining about high margin service business for quiet a while now. The credit card business is especially problematic, we need to limit fees like the EU did asap.

Since forever? It turns out that more than one thing can be bad

Game consoles are even worse because you usually have to buy special developer kit hardware. As far as I’m aware only Xbox lets you switch to developer mode on standard hardware.

Also Google takes the exact same cut on the Play Store and yet Apple is still the one that usually gets singled out.

The top player is always the one singled out. For example, when people protest about excessive packaging for fast food packaging they protest McDonald's, not Burger King.

Interestingly, that's not really what has happened here. In the Epic vs Apple case, iOS represented only 7% of Fortnite revenue while Playstation alone represented nearly 47%. All the platforms pretty much have 30% default markups, though.

>Apple lawyers also took the dominance of consoles as a chance to ask why Epic Games has not sued Sony for the 30% fees it charges to Epic Games. (Sony is a major investor in Epic Games, and it recently put $200 million into the company.) Epic’s lawyers’ rebuttal was to point out the major differences between phones and game consoles, as well as the fact that Sony and Microsoft are more willing to negotiate than Apple. At one point, Sweeney said he would have taken a deal from Apple for lower commissions, if it had been offered. Sweeney also noted that most game consoles are sold at a loss and make money back from sales. Unlike phones, consoles are mainly used to play games. To Sweeney, this was a big reason why Sony and Microsoft’s fees are more palatable.

Because google lets you sideload. Even though almost no one actually does this, the option still exists in theory so you aren't forced to take googles offer.

> Because google lets you sideload. Even though almost no one actually does this

Maybe its because 30% is a relatively small price to pay for the benefits of app stores versus trying to get users to manually install your app via side loading.

Asking Apple to allow side loading and alternative app stores is like forcing Tesla to make a gasoline powered car.

And still claiming warrantee at Tesla when something's wrong the the engine

I understand that few people use F-Droid and similar alternative app stores, but for those of us who do, it is the single biggest reason why Apple gets singled out. F-Droid still exists. I can still homebrew Android apps and run them.

Would I prefer if there was a truly FOSS mobile operating system? Yes. But life is what it is and I'll take the /option/ to use F-Droid over only having the App Store any day.

Whataboutism... You can't argue for one issue by saying what about this other issue.

We have been complaining about them!

> They provide the space, the signage, the discovery

Signage and discovery are a joke. The App Store is littered with garbage, and even when you search for an app by name, you often get unrelated apps for pages and pages before the real app.

> Also, small indie developers are only being charged 15% until they exceed $1 million. So the 30% you always hear about are the big fish that can afford it anyway.

This is a new development, which seems to have resulted only because of the pressure from regulators.

> This is a new development, which seems to have resulted only because of the pressure from regulators.

The 15% was actually part of the settlement of the lawsuit Cameron, et al. v. Apple Inc.

Thanks for the clarification — I thought it was due to soft pressure, but you're right it was hard pressure as you mention.

> Signage and discovery are a joke. The App Store is littered with garbage, and even when you search for an app by name, you often get unrelated apps for pages and pages before the real app.

That's what you get by making it is easy for anyone to develop and release apps. It is a very low barrier of entry. Almost anyone sitting at home can make an app and release it. If they release garbage to game the system and Apple blocks it, then there cries of draconian policies.

Imagine the garbage that you will have to wade through when sideloading is forced upon them.

Somehow I have a hard time believing that the store being littered with junk comes from first timer app developers.

The web still works...

No, it's because Apple sells the signage so that when people search for XYZ they instead get an ad for QQQ. The number of apps on the market has nothing to do with this. It's a monopolistic abuse. The only way to sell your apps is on a controlled platform where people with marketing dollars can put their name on top of yours when people search for your exact title.

Good news! You can still only use Apple's app store, and not worry about this supposed garbage that will be everywhere. Because Apple will still be curating and vetting all the apps in their store, you have nothing to worry about.

Not when Microsoft makes their own App Store and moves their apps to it, then Meta, Epic, TikTok, X (Twitter), Netflix, Amazon, and you get the idea. It's going to be just like the streaming video mess that we have now.

And I still prefer the streaming video mess to the cable company monopoly we had before. Which is what Apple is in this analogy.

Also I doubt other stores are going to charge a subscription fee like streaming services do. So there's nothing wrong with having multiple stores.

Things that didn't happen on Android: that.

You're mindlessly repeating Apple's bullshit.

And also hiding your app in search results behind a list of junk unless you pay Apple extra. Which is pretty much extortion.

That and their curation and vetting process turned into complete garbage over the last few years.

Imagine the garbage that you will have to wade through when sideloading is forced upon them.

We can only hope that one day Apple will save Mac users from the horrors of being able to run software of our choice.

They also run the local government and ban any other malls from existing. Nothing could be more rent-seeking.

In this metaphor, another mall would be another platform, e.g. Android.

Apple isn’t stopping anyone else from creating a new platform, though it does seem pretty difficult.

See: Samsung, Huawei, BlackBerry, etc

There are two malls, Apple and Android on different sides of town. Both have a high level of foot traffic. There's a wide river with only one rickety old bridge joining the two halves of the town. People on the one side of the town almost never go to the mall on the other side of town. So both malls have a monopoly on their side of the town, and you have no choice but to pick one or both malls to setup your store and sell your wares. Both charge incredibly high rents, but then what choice do you have?

There's just the two malls, and nobody has successfully started another mall in a decade.

Is it possible that on Android, where other malls have been permitted for a long time (and sideloading, too) - that there really just isn't much demand for another mall? Maybe they haven't been successful because nobody really wants to deal with another mall. Maybe this will be a complete no-op for Apple if they allow other app stores, too.

If they allowed other app stores, I wouldn't make the move. I get a ton of value out of Apple's ecosystem, including - maybe especially - the ability to see what subscriptions I have and cancel them with a single click without even interacting with the app vendor.

idk what they'd have to do to make me move over, but man, it'd have to be demonstrably valuable - not just the same thing but different 3 feet over that way.

[edit] What if I told you Amazon had its own Android App Store, and literally nobody cares. [1]

[1] https://www.amazon.com/gp/help/customer/display.html?nodeId=...

> Is it possible that on Android, where other malls have been permitted for a long time (and sideloading, too) - that there really just isn't much demand for another mall? Maybe they haven't been successful because nobody really wants to deal with another mall. Maybe this will be a complete no-op for Apple if they allow other app stores, too.

Yes, that's exactly the reason Apple is not allowing other malls. /s If it's so harmless for Apple, why not just allow other malls?

> If they allowed other app stores, I wouldn't make the move. I get a ton of value out of Apple's ecosystem, including - maybe especially - the ability to see what subscriptions I have and cancel them with a single click without even interacting with the app vendor.

What makes you think other app stores can't do it? What if apps are cheaper on other app stores because other app stores don't charge 30% tax?

> Yes, that's exactly the reason Apple is not allowing other malls. /s If it's so harmless for Apple, why not just allow other malls?

I'm sure it's partly related to cost, but also, part of what Apple users value is a consistent and trusted experience.

Yes, like 80 (cost)/20 (experience).

> idk what they'd have to do to make me move over, but man, it'd have to be demonstrably valuable - not just the same thing but different 3 feet over that way.

- Since Apple is currently charging 30%, another app store might charge only 10% and so you might be able to get your spotify subscription for 20% less.

- A provider of especially expensive software (say a CAD or Mathematica) might be unwilling to cede so much of their margin to anybody at all and may prefer to run their own single-item "store", making them the only place to get that particular item.

- Same for especially inexpensive software. Open source game ports that don't want to pay Apple's developer fees. They may make so little margin, including 0, that they aren't feasible with Apple's tax. New software may become sustainable to develop and distribute that isn't currently.

- Porn. Emulators. Anything that doesn't conform to Apple's capricious reviewers. Software that does conform but the pain of dealing with Apple made them give up. The kinds of things that are available on the jailbroken appstores currently.

I'm glad you personally don't have a need for any of these things but that's hardly evidence that the market for it shouldn't be allowed to exist.

> The kinds of things that are available on the jailbroken appstores currently.

Respectfully nobody jailbreaks their phones anymore. 10-15 years ago sure. Partly because security improved but also in large part because Apple's rules relaxed to the point the vast majority of what people want is just in the App Store now. Don't get me wrong Cydia brings back memories, but the last stable release was 3 years ago.

Which is a bummer, because damn did I love playing a solid port of The Legend of Zelda on my iPhone 4.

This all sounds extremely miserable from an end user perspective. We are all going to have 15 app stores on our phones and they will all be sucking up every piece of identifying information they can.

The EU is going to ruin app stores like they ruined the web with cookie notices.

That sounds great in theory, but what we're more likely to get with multiple app stores is going to be like video streaming. We have Netflix, Hulu, Disney+, Max, etc.

Instead of the official walled garden App Store that we have now we'll end up with the Apple, Microsoft, Epic, Amazon, TikTok, Meta, X (formerly known as Twitter), Steam, etc.

> - Since Apple is currently charging 30%, another app store might charge only 10% and so you might be able to get your spotify subscription for 20% less

That's nice in theory. In practice I'm sure it will be they charge the same amount and pocket the other 20%.

> Since Apple is currently charging 30%, another app store might charge only 10% and so you might be able to get your spotify subscription for 20% less.

Spotify might just increase its price to get more profit.

There’s only another year to get out of it anyway.

iOS will be allowing other stores in the EU before then, and it’s hard to see other places not passing similar legislation when their citizens ask why it’s allowed in the EU but not there.

> it’s hard to see other places not passing similar legislation when their citizens ask why it’s allowed in the EU but not there.

I'm still waiting for European-style health care in the US. ;-)

We don't have a GDPR-style law either.

California's got the CCPA. It's not Federal, but it's something.

https://oag.ca.gov/privacy/ccpa

> I'm still waiting for European-style health care in the US. ;-)

Different European countries have wildly different healthcare systems. e.g. the Swiss system is privatized to an even higher degree than the one in US.

Normal credit card processing is 1-3%. They are literally charging 10x market simply because they are the only game in town (due to bundling).

They aren't providing 10x in value over basic card processing just by running the app store.

Are they a credit card processor, or are they a store?

What do you think the margin is at the mall?

For IAPs? They are a card processor.

The only game town for what, though? Doing things on your iPhone?

Most of the things Apple takes a 30% cut for are things that are very easy to do on other devices, it's just that people specifically want to do them on the iPhone. The most notable 30% case is with Fortnite but that's an excellent example of portability. There isn't really anything locking anyone to playing on iPhone except wanting to play on iPhone. Purchased skins and the like are all accessible regardless of where you purchase or play as long as it was linked to your Epic account.

> The only game town for what, though? Doing things on your iPhone?

Well, yes.

There's only two generally available phone platforms and they both collude to take a 30% cut, so avoid that cut amounts to getting exculded from the largest computing platform used worldwide (except China)

Apple also controls all methods of transportation to the mall.

If the number was something around 5~10%, your opinion would be more popular and I think Apple deserves that. But 30%, not so much.

While the AppStore was a meritocracy I think this could be fair comment.

Now that you can pay your way to the top with a shitty spammy app and outcompete a good quality less well funded app, because search and discover ability are absolutely dire, I don’t think it holds true.

Being an indie developer used to be great. Now you just get a bit shafted by the system.

For a small developer/company, it's a good deal. If you are the scale of something like Ikea and are perfectly capable of building your own building, attracting your own customers and managing your own payments, then it becomes a bad deal that you are forced in to accepting.

Even 15% is too high. It's pretty hard as a developer to lop 30% or even 15% off your top line and still survive in a market that is already really competitive. That's why I got out about a decade ago. You have to spam the hell out of your users with ads and dark patterns and endless freemium tricks so that you can make back that Apple tax and then still have enough left over for an advertising budget and to pay the rest of the bills. If you don't, then your competitors are doing it and they'll have a larger advertising budget and you'll eventually be pushed out. That's why you see so much shit on the app store. The good apps are usually from companies that already have a successful standalone business somewhere else (either physical or a web presence) and don't need to squeeze every last drop of revenue from their apps.

I still don't understand how they got away with it in the first place, what if Microsoft said they are entitled to 30% of all revenue generated by all Windows applications?

It’s a scam. You are required to pay Apple for a developer account. You are required to hand over 15%/30% of revenue for the lifetime of your app. You are bullied into paying Apple for App Store search ads or else someone else will take the number one spot even if the search query matches exactly your app name. Then you have to buy multiple generations of Apple hardware to test your app in different OS versions. And then Apple has the audacity to allow plain subscription scams in the App Store but bullies you in the app submission process for trivial things or rejects your app because the reviewer just didn’t read any provided instructions because they only have a few minutes per app review.

Not only 30%. Apple actually launched lots of competing services on their platform, which effectively means that it has a significant advantage in their product pricing.

Still way better than the 70% - 90% that telcos used to charge for Palm, Windows CE/Pocket PC, Blackberry, Symbian, J2ME.

"Services" includes Apple TV+, Apple Music, Apple Arcade, Apple News, and iCloud+. I wish Apple broke out the subscriber or revenue numbers for each item in Services.

Those may actually be the smaller part of services.

Services also include the App Store, AppleCare, and the Google deal to be the default search engine in Safari, which is massive.

Apple TV+, Apple Music, Apple Arcade, Apple News, and iCloud+ will outpace the Appstore as they gain traction. They just have to ensure that they maintain quality.

There is no way that happens unless mobile game monetization is so severely regulated that studios switch gears entirely. Remember 70% of revenue of the App Store comes from games.

Does services also include the 'protection money' Apple gets from Google to keep Google as the default search provider in Safari? That's worth a few hundred million a year, isn't it?

> That's worth a few hundred million a year, isn't it?

More like $20 billion, perhaps up to 25% of all services revenue. https://www.fool.com/investing/2023/02/21/20-billion-reasons...

It also includes the Apple One bundle. I wonder if the bundles complicate that breakdown — I certainly never use Apple Music or Arcade, and almost never TV+.

Anecdotally, I cannot figure out how to cancel One without losing my iCloud photo library. As soon as I do figure that out, I'll be iCloud only.

Your iCloud Photo Library is just storage. So just sign up for enough iCloud Storage to cover what you have now, and you're good.

I take full advantage of my iPhone 14 Pro's 48MP camera raw and 4K60 video formats. Which quickly pushed my iCloud into the 2TB plan at $120/year. Which seems cheaper than AWS S3. In my particular case, I'm nowhere close to using the full 2TB, which is likely where the profit comes from on that particular service.

I believe Services margins are ~70%

By far the highest of their entire product mix

Services also includes the amount that Google pays Apple each year to be the default search engine on iOS. It’s estimated to be $15+ billion a year https://www.makeuseof.com/why-google-pays-apple-billions-of-...

That’s pure profit

> That’s pure profit

The have to pay someone to edit the config file.

It’s been last edited in 2007.

> Its incredible that "Services" brings as much revenue as Mac, iPad and wearables/accessories combined.

That's not the story the numbers are telling:

               23 YTD    22 YTD  Change
               ======    ======  ======
  Mac          21,743    28,669  -24.2%
  iPad       + 21,857  + 22,118   -1.2%
  Wearables  + 30,523  + 31,591   -3.4%
             --------  --------  ------
               74,123    82,378  -10.0%
  Services   / 62,886  / 58,941   +6.7%
             ========  ========  ======
               +17.9%    +39.8%

Even with Mac sales getting smashed hard YTD, Services would still need to generate ~18% more to be comparable in revenue; $11.2 billion delta is not insignificant, even with games buried in footnotes[1; p. 37] being played like:

>> Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.

[1] https://www.sec.gov/Archives/edgar/data/320193/0000320193220...

Apple hit a plateau. I don’t think AR will be a meaningful driver of growth for awhile.

Perhaps they make a big move and buy Disney.

eps up 5%, they're doing fine. I think it's much more likely that they go all in on partnering with a sports league, probably NBA, to be the sole carrier of their content. As far as I can tell the most impressive demo for the vision pro is currently live sporting events. I'm pretty sure apple tv's main reason for existing is to create content for their headsets.

> eps up 5%

Only because they buyback.

I don't really see how that's an excuse that's supposed to make me think the quarter wasn't successful. Such high margins are almost always due to market failures. Buying back enough shares that eps grows 5% a year is a good outcome for apple.

PER is >30. For a company that size, with interest rates at ~5%, this is very high by historical standards.

But then, we have Tesla and Nvidia which make them look like a bargain.

There's actually talk that they might pick up the media deal for the PAC 12 (if the conference exists in a week) so you might be right on the money there

Their version of LLM should be fun, they have their silicon, they can make it local and integrate with the ecosystem.

Going by Siri, they are behind competition by a wide margin.

I don't think Siri's quality is a good indication of Apple's ability to come out with a successful LLM product in the future.

One thing I think about is how Alexa is apparently considered a failure at Amazon (https://arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-co...). Alexa devices sell well but people only use them for trivial use cases that are hard to monetize.

I speculate that Apple doesn't see a need to invest in Siri because the market has shown that digital assistants don't synergize with "services" that well.

Additionally, I don't think that Apple will need to leverage the "Siri codebase" as a starting point for releasing a compelling LLM codebase - maybe voice recognition, but who knows.

Apple has shown through other product launches that they will take a "wait and see" approach and release something when its ready.

If that's the case, why do they keep releasing HomePods?

They’re a fabulous Bluetooth speaker if nothing else

HomePods "synergize" well with Apple Music subscriptions.

I also think they're a protective measure to keep people from getting someone else's smart device, which might lead you into someone else's ecosystem.

I think this is a fair point. Taking a look at the product page for the $300 HomePod (https://www.apple.com/homepod-2nd-generation/), I would argue that the HomePod is marketed more as a speaker with Siri integration rather than a Siri device with a really good speaker.

The bullet points I see on the above page, in order, are - really good speaker - Siri integration - integrates with Apple ecosystem for playing music - smart home integration - "private and secure" whatever that means

So, it's not clear to me that "a better Siri" would necessarily result in selling X amount more speakers to make Siri a worthy investment while investing in better audio technology does because it's the main selling point for HomePods.

Homepods are great to pair with Apple TVs for stereo sound.

A major issue with Apple and LLM is that they pledged data privacy. I don’t think they’re training on anything special.

They keep releasing new hardware that could really use a much better Siri (AirPods, HomePod, Watch, and now Vision) so the ongoing lack of a quality voice UI is embarrassing.

I very much think it has to be in their near future.

I agree, this will probably be more impactful than the Vision Pro. Making all their products way more useful. You can already run Llama on a Mac and it’s pretty great. When Apple release theirs it will probably be a very nice experience.

LLM from apple? I tried dozens of voice assistants in my life and non of them was worse than Siri by a very large margin. I can't even remember a single time I got a useful answer from Siri and 90% of the time, it was not even able to understand what I said (no problems with other assistants).

I really thought that the current lineup of Macbooks would be a big driver of growth for a while. Then again, the ones worth upgrading to are really expensive and that is probably keeping a lot of potential purchasers on older versions.

Think they’ll find growth in India, Indonesia and Vietnam

But that’s more than offset by weakness in China.

What , at least do the most basic research https://www.bloomberg.com/news/articles/2023-08-04/apple-sur... https://asia.nikkei.com/Business/Technology/Apple-posts-3rd-...

People suggest this a lot, but I think it's not a good fit. While some of Disney's profit centers would be a good match for Apple (Film and Television), others (Theme parks and merchandise) would be a lot of distraction. Disney's workforce is almost twice the size of Apple, and Apple is very protective of its work culture and how people function in the company.

I think Apple much more prefers to operate as a partner to Disney

Zero reason for Apple to get into a flailing business like Disney. It earns peanuts at low profit margins compared to Apple’s existing business, and has extremely high liability exposure due to all the theme parks and whatnot.

Right. Maybe buy a stake in ESPN and get them to run 3D livestreams of games, but even that probably doesn't go forward until the MLS deal is a success.

I think they are going to buy Nintendo

I've been told in the past that the Japanese government would never let a national icon such as Nintendo be acquired by a foreign firm. I personally am not qualified to answer that though.

With that said I completely see where you're coming from and think that their games in particular match a lot of the ethos of Apple's own products. I do wonder if the internal cultures are vastly different though? The Bay and Japan have very different approaches to problem solving and business in general.

Yeah, I can see that getting stuck on ideology.

It just feels to me Nintendo doesn't have many options. Other than the IP, people would rather use the Steam Deck over the Switch. This was also a similar hardware story for non-mobile consoles.

Meanwhile, both the Switch and Deck are roughly an iPad with dedicated controllers. And the future is VR, but Nintendo is struggling with frame-rates even on the Switch.

I can see Apple making a deal with Nintendo, to build its next console as a peripheral on-top-of the iPad / visionOS. All the power of Apple Silicon and all of the inspiration of Nintendo IP.

Nintendo is a massively successful company that is still somehow selling tons of Switches even though it's an ancient device.

They're not going anywhere, nobody's going to buy them.

With Nintendo Switch currently at 130 million sales compared to 3 million for the Steam Deck, I’m not sure Nintendo has much to worry about. Admittedly, the Steam Deck has been out for much less time, but it also went through a big hype cycle at launch. The Switch is lighter and thinner, has more battery life, is less expensive, and to a significant extent is targeting a different audience. In 2023 it’s long in the tooth, but supposedly it will be replaced next year. As for the iPad, well, the Switch has been competing with it for its whole lifetime and has succeeded anyway. If nothing else, the iPad is much more expensive than the Switch - never mind the Vision Pro’s price!

> Other than the IP, people would rather use the Steam Deck over the Switch.

This is very tech people loop take. Targeted people just want to play games.

Not only doesn't Nintendo have to worry about the SteamDeck sales, the competion in ramping up with devices from Asus, Lenovo and others, all running Windows proper instead of emulating it.

> Perhaps they make a big move and buy Disney.

Or make a search engine and become Google :)

I wish Apple would make a handheld gaming device and make it work with steam similarly through the proton layer like Valve. I'm sorta hoping by putting this into writing it might bring it into existence.

Not sure they'd be able to compete with the performance loss from running Windows binaries via the Game Porting Toolkit (their proton like tool) and the x86 to ARM translation.

Apple has been able to make a killer game console or handheld for a while but they just don't seem to care.

All they really have to do is change the marketing around the Apple TV, put a controller in the box, and start courting developers to port their switch games...

I guess they'd encourage developers to officially port their games to native Apple Silicon, but have emulation as a backup.

> All they really have to do is change the marketing around the Apple TV, put a controller in the box, and start courting developers to port their switch games...

They have done this, albeit half-assed. The AppleTV (and iOS) readily support a bunch of Bluetooth controllers. They tried to get studios to make games for the AppleTV but they mostly just got iPhone/iPad ports.

There's a couple big problems with the AppleTV. The first is poor tooling for graphics and audio development. The underlying frameworks are powerful as is the hardware but it's difficult to debug them or access them at a low level. It's hard to just get an accurate accounting of the timing of draw calls and GPU load on iOS and macOS. The tooling for DirectX is way more powerful.

The AppleTV hardware is also shit. They've always shipped with old Apple Silicon SoCs. So if you've got a game that screams on the latest iPad or iPhone it runs like shit on the AppleTV or you've got to scale back the visuals. Even when a developer manages to make an awesome game for iOS it ends up sucking on AppleTV.

Then there's the tiny amounts of storage. Even the average Nintendo Switch game would find the AppleTV's storage anemic to say nothing of the PS5 or Xbox.

Apple has never courted AAA game development. I don't think any of Apple's C-suite appreciates games. They trot out game developers to do slick demos at one of their events (doting on them in the run up) and then go back to largely ignoring them. The various game adjacent technologies/frameworks are almost always bottom-up initiatives from development teams trying to come up with a new shiny thing for the next OS release.

>Apple has never courted AAA game development

Not since Jobs returned, anyways. Before that, Bungie was a darling for Apple and they even made the Pippin, which was a games console.

I would not point to the Pippin as an exemplar of AAA game development. It was a locked down Performa with a custom build of System 7. Most of the titles for it were just retooled Mac releases and it didn't really offer any special "game console" special sauce. It was the product of an extremely unfocused and frankly rudderless Apple.

But I would agree Bungie was a AAA studio though in spite of Apple rather than because of anything in particular Apple did. They treated Bungie and their games as a thing to provide a demo but never really anything to actively support or encourage.

You know, by this point is does seem like Apple could make an M2 chip extra-heavy on the GPU, like they have their Pro/Max/Ultra variants, package it in an Apple TV chassis, ship it with a controller, and have an instant Xbox/PS competitor if they could get gaming companies to target it as a platform for AAA games.

I wonder why they don't, but I'm not a gamer. Is there something about GPU performance that still doesn't stack up? Does the violence of many AAA games go against their Disney-clean brand? Are there too many platform exclusives that would hamstring the effort? Is it just not in Apple's DNA? Or is console gaming just not profitable enough at the end of the day?

As I alluded to in a sibling comment: gaming is not in Apple's DNA. Their executives are just not interested in gaming.

That being said, even if they were, Apple likes fat margins on all their hardware. Game consoles are the Gillet model, zero to negative margins on the console with money made on licenses and services.

A theoretical AppleTV with an M2 and beefy GPU with a useful amount of storage could never hit their margin goals. Such a box would basically be the high end Mac mini which retails for $1299. There's no way Apple would sell that kit for $399 and try to make up the difference in licenses and services. Even with a huge attach rate there's no way they'd make up the difference.

Even with the hardware (an older A-series would stomp the Switch), Apple just keeps burning bridges with the industry due to the exec problem you mentioned.

They do nothing (old OpenGL) or make things worse (unfixed OpenGL bugs), or promise a new focus and then don’t keep following through long-term.

The only reason Apple has any credibility in any way with games is the iPhone, and they did basically nothing. They were in the right place with good hardware and made software easy to buy. They didn’t focus on it.

(Then they allowed IAPs and destroyed the market for good iPhone games but made everyone rich so ‘woo’)

They got in a giant fight with nVidia. They totally pissed office Epic, makers of Unreal (it wasn’t going well before the games store stuff). Took years to allow real controllers and didn’t make one of their own so most people didn’t know BT controllers were an option. Forced AppleTV games to support the Siri touch remote as a controller for years despite it being useless for most games. Take a huge cut of profits on all non-Mac devices. Randomly reject app updates. Don’t have a public roadmap for anything and can change direction on a dime.

Everything I’ve heard is they have no faith from the industry. I’m not surprised.

Steve Jobs didn’t want the Mac seen as a toy or video games machine but a ‘real computer’ and the attitude hasn’t exactly changed since.

Jerry Pournelle was black listed for life from Apple events because he called the original Mac 'a toy' because it didn't have enough RAM to do serious work.

There was that very brief period in the late 90's where Job's vaguely gave it a little try with things like a Demo of Quake 3 on stage but they then moved on from that almost immediately.

The closest thing Apple has done for gaming technology wise is the Metal API, if they really wanted to make an impact on gaming, they would have adopted Vulkan.

> The closest thing Apple has done for gaming technology wise is the Metal API, if they really wanted to make an impact on gaming, they would have adopted Vulkan.

Work on Metal started before AMD donated Mantle to Khronos which became Vulkan and was released (IIRC) before Vulkan was finalized. Apple was not going to drop all that investment to chase Vulkan.

Giantrobot’s comment is spot on.

I’m addition, I think Apple just wanted a faster and more modern API to make better use of their hardware than the old version of OpenGL they were using. I suspect they still would have made Metal even if the games industry didn’t exist.

That just happens to be the context we hear it discusses in the most, for obvious reasons.

I think Metal would have 100% happened even if somehow the game industry didn't exist. It was all about getting better performance, especially better performance per watt by making more optimal use of the hardware. I don't think the OpenGL model of GPUs was ever going to get there. Since Vulkan just didn't exist when Apple was looking at the landscape they decided to make their own system.

Game consoles work on slim margins or even a loss that is made back by licensed game and accessory sales. This is very anti-Apple. Compare the hardware of something like the $300 Xbox Series S to the $600 Mac Mini. The Xbox has 2GB more RAM, a beefier GPU, twice the storage space and includes a controller (~$50 value) and an HDMI cable in addition to the power cable which is all that's bundled with the mini.

AAA games eat storage too taking typically 30-100+ GBs. Baldur's Gate 3 for example is 125GB. Xbox has relatively expensive sort of proprietary storage upgrades where 1TB is $150 but it looks downright cheap compared to what Apple asks for 1TB.

Also, the App Store still does not accept app bundles larger than 4GB.

> Does the violence of many AAA games go against their Disney-clean brand?

Judging by the Apple original content on AppleTV, this is not an issue.

Oh good point. Yup, that's definitely not it then.

I don’t see them doing anything that skips rent like the AppStore.

Putting the numbers in perspective is always interesting:

The best selling video game handheld of all time, the Nintendo DS (across all its hardware revisions), sold over 150 million units in its lifetime.

Apple typically sells this many iPhones in less than three quarters.

iPad isn’t doing very well. I wonder how they can fix that.

I love my iPad as media consumption device, but the problem is that I only replaced it once so far. For video, even very old device works well (slow UI of the apps is a secondary concern).

I think it’s hard to fix this. It’s just a device that imo most people don’t need to replace that often, compared to phones (where by how you use them, you want more speed) or laptops (that are mostly used for work nowadays, so you also want it to work well).

I think all the nannas just use smartphones now instead.

I love my iPad though, but I also own two macbooks and an iPhone and an android smartphone. I can't see any need to get another iPad for a few years. They're a brilliant device but their use case is a bit up in the air if you already have an iPhone and a MacBook.

I think they need to give current iPad owners a reason to upgrade.

I use a pro from 2018 daily, but I don't think there's been a single improvement since then that would be meaningful to me.

The most obvious thing I can think of is let them run macOS, which would expand the use cases dramatically.

My mum uses a 2014 ipad air 2 and it still works perfectly fine and even still receives security updates. I don't think Apple needs you to be buying a new ipad every few years. Every time the device needs replacing, its a chance you might switch to Android and stop paying for their subscriptions and 30% cut.

The iPad is just one piece of the complete ecosystem. If they last forever without feeling obsolete, it builds a stronger brand.

Me too. The day a 1000 nit display comes out they can take my wallet.

They need to give people a compelling reason to upgrade. I stopped upgrading my iPad when the new features didn’t make it any better for media consumption and the basic apps I run on it. The cost to upgrade just isn’t justified by little incremental changes.

I gave up trying to use it as an alternative for doing work on travel - my workflow just doesn’t translate well to that device no matter how much I tried, so I just carry the bigger 16” laptop everywhere. They’d have to make some pretty big changes to the OS to win me over for work.

iPad is a business roughly the same size as Mac. There's only so much we can complain about that.

And like others I like https://sixcolors.com/post/2023/08/charts-apple-q3-2023-resu... for an easy, smoothed out, look over a bunch of past quarters, and past AAPL cyclicality. Like others, if anything, I hope to see better results due to M1 / M2 processor performance.

It's funny to look back at all the chat circa 2010 about how tablets were going to replace personal computers. It just hasn't happened. For most people they're a third device after a smartphone and a laptop, or a device for kids.

Tablets have remained a niche market, but within that the iPad is doing fine.

I decided several years ago that I’m not buying a new iPad until the OS supports multiple users and user switching. With the M series of chips and the amount of RAM and storage on the recent models, there is no reason to restrict it as a single user device except that Apple wants to.

It's not just iPads. I don't know a single person who uses tablets. Why bother with a tablet, if laptops could be as small and are also way better for productivity? MacOS is also far less restricted than IOS allowing you to do much more stuff on it.

> Why bother with a tablet

Honestly, because it’s nicer to use on a couch.

Will do healthcare and a car eventually right?

Not sure about a car, but healthcare definitely

If Apple built a good copilot to help automate tasks on my Mac, I'd pay for a subscription. Kind of like a successor to Mac Automator but smarter and powered by AI.

I suppose it'd have to make use of the accessibility features to know what's on the screen and what can be interacted with.

define “tasks”

I mean it in the broadest sense. So any rote task I could explain to an assistant.

For example: - Backup all these files to Google Drive and share them with Susan - Take a look at all of these links , summarize in a few sentences what each company does, and put it in a doc organized by industry - Use this template and setup a DocuSign for me and Dan

Just thinking out loud, but would love an AI automation tool that has access to the screen and keyboard just like I do.

Might need some safeguards though!

Before this report, people were paying 32x earnings for Apple. Which has grown roughly -1% in the last year.

With central bank interest rates at >5% this soulds a bit expensive, no?

what if you look at it from forward earnings?

Waiting for someone to summarize the earnings, as always :)

Less revenue, more profit. looks like the services strategy is working

So, in the limit, revenue will approach zero and profit will approach infinity?

Yes. According to my math by the year 2044 they'll have roughly $45/month in expenses (domain names), $400 trillion in revenue, and $580 trillion in profit.

I'm not sure how you arrived at those numbers, but I'm sure an LLM somewhere will agree with you soon.

Not sure where you're going with this clearly silly question but if Apple could persuade its costs to be negative, yes, that would be good for shareholders.

No, but it does make you wonder if some Ballmer-y future CEO decides that the margins of Services are more important than hardware sales, and chases some short-term gain from opening up iOS to commodity hardware makers.

P/E should be higher to reflect that

I think these charts are a good summary: https://sixcolors.com/post/2023/08/charts-apple-q3-2023-resu...

I know, I know, I know…. But HOW can Mac revenue be declining? The M2 machines are amazing, best machines I’ve ever used, UNREAL performance and battery life.

So funny that we cheer for products we love, like it’s a sports team. Prior generations maybe felt this way about their hand tools.

It's not really a mystery. Compare Intel Macbooks with M1.

I’m a shareholder (only a handful of them) and I wish they’d not pay the dividend but instead put more into R&D, open up the AppStore a bit, buy more interesting companies, etc. I see the dividend as just a play for wall street. I’d rather see the share price rise and than get dividends that I’m doubly taxed on.

"Services"? Sounds about right. Apple is/has been a media company for over a decade. The services that have come along like Cloud etc are just periphery things that support the main thing.

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