Apple Announces Q2 Fiscal Year 2016 Results: iPhone Sales Slowed But Services Gain
This
afternoon, Apple released their Q2 earnings for fiscal year 2016, which
ended on March 26. The company saw revenues decline for the first time
since Q1 2003,
according to CNN.
The results today did not meet expectations, but that was quite a run
to go over 13 years without a year-over-year decline in revenue. Revenue
for the quarter was $50.56 billion, which is 10% lower than the $58.01
billion announced a year ago. Gross margin was $19.9 billion, or 39.4%,
which was down from the 40.8% gross margin in Q2 2015. Net income was
down 22.5% as well, coming in at $10.5 billion for the quarter. This
resulted in earnings per share of $1.90, down from $2.33 a year ago.
| Apple Q2 2016 Financial Results (GAAP) |
|
Q2'2016 |
Q1'2015 |
Q2'2015 |
| Revenue (in Billions USD) |
$50.557 |
$75.872 |
$58.010 |
| Gross Margin (in Billions USD) |
$19.921 |
$30.423 |
$23.656 |
| Operating Income (in Billions USD) |
$13.987 |
$24.171 |
$18.278 |
| Net Income (in Billions USD) |
$10.516 |
$18.361 |
$13.569 |
| Margins |
39.4% |
40.1% |
40.8% |
| Earnings per Share (in USD) |
$1.90 |
$3.30 |
$2.33 |
iPhone sales have certainly slowed, but Apple was
almost destined to falter after reporting such strong quarters a year
ago. The launch of the larger iPhone 6 and 6 Plus triggered
year-over-year growth in iPhone sales of 40%
a year ago, and 46% growth the
quarter before that.
Strong growth in China helped fuel a lot of that gain, since it was
practically an untapped market for Apple, but revenue from China fell
26% from a year ago. With Apple being a company that has struggled to
expand it’s market outside of iPhone, when the one segment falters it
can make a big impact on the results, which is exactly what happened
here.
Pretty much every earnings report, sales of the
iPhone dominate the discussion, and today is not really any different.
Apple sold 51.2 million iPhones this quarter, which is a drop of 16%
year-over-year. That brought in revenue of $32.86 billion for the
quarter, which is a drop of 18% year-over-year. A larger revenue drop
than unit sales means that of the iPhones it is selling, the average
selling price is also down. Apple still gets 65% of its revenue from the
iPhone, even on a down quarter, but the other segments are not pulling
up the slack.
iPad sales continue their downward
trajectory, with sales of 10.251 million units this quarter, which is
down 19% from a year ago. Revenue for the iPad was $4.4 billion, also
down 19%. This has been a common trend with the iPad over the last year
or two, and what originally looked to be another strong growth segment
for Apple has quickly become a market where sales keep declining.
Eventually they will bottom, but even with the solid new entries in the
iPad Pro, the smaller
iPad Pro 9.7, and even the new
iPad Mini,
the Apple tablet market has quickly reached a point where people are
not upgrading as quickly as the iPhone market does, and you have to
start to wonder when sales of the iPad are going to bottom out.
The
PC market is certainly declining, but the Mac has soldiered on,
generally outperforming the PC market even in the down times. That trend
also stopped this quarter, with Mac sales down 12% year-over-year, to
4.0 million devices. Revenue for the Mac was $5.1 billion, which is down
12% compared to last year, meaning that Apple is also selling lower
cost Macs than a year ago. We’ve not seen Apple refresh the Mac for some
time though, with only the MacBook getting Skylake, so sales may be
affected by this as well.
Services, which include
internet services, AppleCare, Apple Pay, and others, are now the second
largest revenue source for Apple, with revenues up this quarter 20% over
last year, for a total of just a hair under $6 billion for the quarter.
Even compared to the holiday quarter, which was Q1, sales were pretty
much flat, and all of the other segments dropped significantly (and
expectedly) compared to last quarter. You likely don’t think of Apple as
a services company, but iTunes sales, Apple Music, and their other
services are now the number two product at Apple, and that’s pretty
surprising. It may not be number two next quarter, but with Apple having
over a billion people using their services now, sales here should stay
strong.
The final segment from Apple is “Other
Products” which includes Apple Watch, Apple TV, iPod, Beats, and
accessories. This segment also grew significantly year-over-year, to
$2.2 billion, which is up 30%. Although Apple doesn’t break down the
products inside here, the addition of Apple Watch likely makes up a good
portion of this, since it wasn’t part of the category a year ago.
| Apple Q2 2016 Device Sales (thousands) |
|
Q2'2016 |
Q1'2016 |
Q2'2015 |
Seq Change |
Year/Year Change |
| iPhone |
51,193 |
74,779 |
61,170 |
-32% |
-16% |
| iPad |
10,251 |
16,122 |
12,623 |
-36% |
-19% |
| Mac |
4,034 |
5,312 |
4,563 |
-24% |
-12% |
Apple announced they were going to be adding an
additional $50 billion to their capital return program, bringing the
program up to $250 billion in cash returned to shareholders by the end
of March 2018. The dividend will be increased to $0.57 per share, and
they will buy back $175 billion in shares, up from the original goal of
$140 billion in shares.
They also announced guidance
for the next quarter, where they expect revenue between $41 and $43
billion (Q3 2015 revenue was $49.6 billion) and gross margin is expected
to drop again to between 37.5 and 38%. With this guidance, next quarter
may be very similar to this one.
| Apple Q2 2016 Revenue by Product (billions) |
|
Q2'2016 |
Q1'2016 |
Q2'2015 |
Revenue for current quarter |
| iPhone |
$32.857 |
$51.635 |
$40.282 |
65.0% |
| iPad |
$4.413 |
$7.084 |
$5.428 |
8.7% |
| Mac |
$5.107 |
$6.746 |
$5.615 |
10.1% |
| iTunes/Software/Services |
$5.991 |
$6.056 |
$4.996 |
11.8% |
| Other Products |
$2.189 |
$4.351 |
$1.689 |
4.3% |
I don't think we have to worry about Apple going
bankrupt just yet, but today’s earnings are a big change in what we’ve
gotten used to in the last 13 years or so. All things must come to an
end, and today it was Apple’s amazing track record over the last decade
or more. They are certainly not alone in having their struggles this
quarter, but the drop is pretty significant nonetheless.
Source:
Apple Investor Relations
Read More ...
Intel Proposes to Use USB Type-C Digital Audio Technology
USB
Type-C has a number of chances to become the standard for data and
charging connector for smartphones and tablets running either Android or
Windows. However, in the long-term future, Intel wants USB-C to be even
more universal (and therefore pervasive) than it is going to be, which
is why at IDF Shenzhen part of one of the talks evolved around using
Type-C for audio.
Audio receptacles on PCs and mobile
equipment are virtually the last remaining analog interfaces of modern
devices, requiring certain techniques to maintain a high audio quality
and remove interference. Intel proposes to replace things like 3.5 mm
mini-jack with USB Type-C which will help to add features to headsets
and will simplify connections of multi-channel audio equipment to
various gadgets. This is not the first time a company has proposed to
replace analog audio on PCs and mobile devices, but so far, nobody has
succeeded due to the ubiquity of 3.5mm. Since the industry may still not
be ready to go all-digital, there seems to be a backup plan.
Various
types of audio jacks to connect headphones to audio equipment have been
around for decades. For example, the original 6.35 mm connector, which
is still widely used by audio equipment, was invented in 1878.
Meanwhile, two-conductor miniature 3.5 mm audio connector (which is the
most widely used audio connector at present) has been around since
1960s. Headphone jacks have evolved; they have gained contacts to
support microphones and even basic programmable capabilities to enable
remote controls. However, fundamentally, the ability to listen to audio
through a speaker has remained the same for over a hundred years:
completely analog and barely any smart functionality. Today's
smartphones are used for all sorts of different purposes and are
connected to a variety of devices, which requires sophisticated
interconnection technologies with high data-rates. At the same time, as
phones and devices get thinner, or even to simplify some of the internal
design, it gets harder to install multiple ports for various purposes.
If there were to be a universal connector that does it all, including
audio, Intel and some other players want USB Type-C to be that universal
connector.
In
fact, USB-C can be used to transfer analog audio in accordance with the
specification of the connector. It all comes down as to how that audio
is transmitted.
The USB-C has sideband use pins (SBU1
and SBU2) which can be used for analog audio in audio adapter accessory
mode. Use of the sideband pins should not impact data transfers and
other vital functionality of USB-C cables, which should make them
relatively simple from the engineering point of view. In this case, the
USB-C connector will just replace the 3.5 mm mini jack and may even gain
some additional features, such as a thermal sensor in an earpiece could
measure temperature for fitness tracking.
The concept
is not completely new and we saw it years ago - back in the 2000s,
Motorola used the mini-USB connector on its feature phones to enable
charging, data transfers and a headset connection. The idea to use one
connector for everything was not entirely bad, however, it left users
without a choice of headsets. However, if the makers of devices (as well
as producers of audio listening equipment) adopt USB-C, the is
potential that the problem will not occur again. In the advent of
digital signal transfer, this allows the headset to drive the
digital-to-analog conversion, removing electronic interference from the
host and potentially offering a wide array of audio results.
However, transferring analog audio using USB-C’s SBU pins is not the only thing that Intel is working on.
At
present, Intel is finalizing the USB Type-C Digital Audio technology
and plans to release its specification later in Q2. The company does not
reveal a lot about the standard right now, but notes that it is working
on updating the USB Audio Device Class 2.0 specifications to support
new connector, expand the list of recent audio specifications and
features, improve power management and simplify the discovery and
configuration model to make the upcoming headsets as easy to use as
today’s headsets.
In fact, one of the important issues
with streaming audio over USB is the synchronization of data streams
from the host to the receiver. The USB Audio Device Class specification
solved the problem in the past and because Intel mentioned the USB Audio
Device Class 2.0 in its presentation at IDF, this may mean that the new
the USB-C Digital Audio spec will rely on this synchronization
mechanism as well. Intel wants its USB-S Digital Audio to be
backward-compatible with USB Audio (1.0 and 2.0), but naturally plans to
add support for new music formats.
Usage of digital
audio means that headsets should gain their own amplifiers, DACs and
various other logic, which is currently located inside smartphones.
Intel proposes to install special multi-function processing units
(MPUs), which will perform beam forming, noise suppression, acoustic
echo suppression (AES), acoustic echo cancellation (AEC), non-linear
processing and other operations. The MPUs will also support HDCP
technology, hence, it will not be possible to make digital copies of
records using USB-C digital headset outputs. It is unlikely that audio
processing will be offloaded to external headsets completely, but the
latter will clearly gain their own chips. This may, however, see a spike
in cost, especially at the super-low end.
A good thing
about USB Type-C headsets with MPUs is that they are going to be
software upgradeable and could gain functionality over their lifespan.
Intel admits that such MPUs will make digital headsets more expensive
compared to analog devices, but high volumes and new process
technologies will help to reduce the cost of digital headsets over time.
In fact, USB Audio headsets and audio chips for them are not something
completely new. For example, Plantronics Audio 655 DSP headset costs
$49.99, whereas CMedia’s HS-100 chip for headsets is available
$1.
Therefore, from the cost perspective, digital headphones should not be
too much more expensive in general. Meanwhile, Intel wants USB-C digital
audio headsets to offer “significant value at higher end” and have
improved functionality in a bid to become popular among consumers.
The
industry has successfully replaced analog cables with HDMI for video
equipment in the living room and in the coming years will retire the
D-Sub interconnection for computer displays. However, audio jacks have
survived multiple generations as other standards have changed. In fact,
Intel itself eliminated analog audio jacks in its
first-generation NUCs PCs,
but had to return them in subsequent generations. With USB-C Digital
Audio Intel may not be alone. Google’s Android 5.0 already supports USB
DAC devices and thus digital headsets. Moreover, last week LeEco
released
several smartphones without audio jacks, so, there are attempts to
eliminate them from mobile devices already. One maker will not make any
difference, but a coordinated move by market leaders, such as Samsung,
LG or HTC, could have a significant impact.
Read More ...
The Riotoro Prism CR1280 Case Review
In
this review we are having our first encounter with Riotoro, a new
manufacturer of PC cases and peripherals. The Prism CR1280 that we are
putting to the test today is the world’s first RGB case, a very large
tower primarily designed for advanced gaming systems.
Read More ...
AMD Releases Radeon Pro Duo: Dual Fiji, 350W, $1500
These
recent years we have seen a slow but steady buildup of VR from both
technological developments to growing enthusiasm shown by consumers and
the industry. Today AMD is releasing the Radeon Pro Duo to the market as
their first card targeted at VR developers. This card is not being
directly aimed at gamers, despite the capability under the hood, but
focuses on official support for professional software. Additionally,
multiple initiatives are being both spearheaded and supported by AMD and
others to encourage growth in the VR sector.
The AMD Radeon Pro Duo was
first announced back in March,
with the card is being marketed for VR content creation first and
foremost. With this card, AMD is promoting the ability to allocate one
GPU per eye while powering VR experiences. This way the case is opened
up for performance beyond what any other single card can offer today.
Another use case for developers is offloading compute work to the second
GPU while the first is used for graphical work which can make for a
much smoother experience during demanding a workflow.
Gaming
is definitely possible on Radeon Pro Duo and alongside the FirePro
drivers for content creators, Radeon drivers will be available. The Pro
Duo will not see validation for as many applications as a true FirePro
card, but official support will be provided for applications important
to gaming content creation such as Autodesk, Maya, and Blackmagic
Davinci Resolve.
| AMD GPU Specification Comparison |
|
AMD Radeon Pro Duo |
AMD Radeon R9 Fury X |
AMD Radeon R9 Fury |
AMD Radeon R9 295X2 |
| Stream Processors |
2 x 4096 |
4096 |
3584 |
2 x 2816 |
| Texture Units |
2 x 256 |
256 |
224 |
2 x 176 |
| ROPs |
2 x 64 |
64 |
64 |
2 x 64 |
| Boost Clock |
1000MHz |
1050MHz |
1000MHz |
1018MHz |
| Memory Clock |
1Gbps HBM |
1Gbps HBM |
1Gbps HBM |
5Gbps GDDR5 |
| Memory Bus Width |
2 x 4096-bit |
4096-bit |
4096-bit |
2 x 512-bit |
| VRAM |
2 x 4GB |
4GB |
4GB |
2 x 4GB |
| FP64 |
1/16 |
1/16 |
1/16 |
1/8 |
| TrueAudio |
Y |
Y |
Y |
Y |
| Transistor Count |
2 x 8.9B |
8.9B |
8.9B |
2 x 6.2B |
| Typical Board Power |
350W |
275W |
275W |
500W |
| Manufacturing Process |
TSMC 28nm |
TSMC 28nm |
TSMC 28nm |
TSMC 28nm |
| Architecture |
GCN 1.2 |
GCN 1.2 |
GCN 1.2 |
GCN 1.1 |
| GPU |
Fiji |
Fiji |
Fiji |
Hawaii |
| Launch Date |
Q2 2016 |
06/24/2015 |
07/14/2015 |
04/21/2014 |
| Launch Price |
$1499 |
$649 |
$549 |
$1499 |
The Radeon Pro Duo is essentially and effectively
two Radeon R9 Nanos together on a single PCB. At a high level, the Pro
Duo should give us up to twice the performance at twice the power
consumption (plus a bit extra for PCIe switches). To remove heat, the
card comes with a closed loop cooler similar to that found on AMD’s
Radeon R9 Fury X. This cooler, unlike the one found on the R9 295X2,
provides a complete liquid cooling solution covering the VRMs on both
GPUs along with the GPUs themselves. For reference, the pipes on this
one are 540 mm long, and the double-thick radiator with fan comes in at
63 mm
Moving
past the cooling solution we get three full sized DisplayPort
connectors and one full-size HDMI port. On the side of the card there
are three 8-pin PCIe power connectors which will do more than an
adequate job of supplying the rated 350W power draw. Note that 350W is
the equivalent of dual R9 Nano cards (rated at 175W a piece), and will
be clocked similarly. The reactive frequency adjustments to heavily
loading, by inference, are likely to be similar but we expect AMD to be
using low-power binned parts for their new high-end card.
The
Radeon Pro Duo is launching today at $1500, or three times the current
price of the R9 Nano. That’s a $500 price premium to combine two cards
into one. Even with the price, AMD is keen to admit that the Radeon Pro
Duo is now the single fastest graphics card on the market since the
competition doesn’t offer a similar product at this time. From our
perspective at AnandTech, we still advise that users are better off
investing in a single powerful GPU first, and only scaling out into
SLI/CF when requirements for extreme performance are such that a single
GPU solution cannot provide. With VR, it stands a good chance at pushing
gaming machines harder than anything we’ve seen so far, especially when
trying to maintain a smooth and low latency experience. It all depends
on the workflow and subsequent frame rendering methods used.
Alongside
all of this news and information is renewed attention for several
initiatives AMD is taking part in. AMD has placed the Radeon Pro Duo as
the first card in their
AMD VR Ready Creator Line. The goal being that the Pro Duo, coupled with
Liquid VR,
will create a powerful and capable platform to develop future VR
experiences. The AMD VR Ready Creator Line is also the platform of
choice for Crytek’s
VR First
initiative, which intends to foster growth in the VR industry by
supporting developers by powering virtual reality labs in colleges and
universities around the world.
We are approaching a
crossroads between the outgoing GPU generation and the upcoming cards
coming out later this year. The Radeon Pro Duo is part of an outgoing
generation but aims to provide a competent platform for VR content
creation following known architecture guidelines. Along with the new
hardware released today, there are many initiatives in motion that aim
to encourage growth in VR, and new hardware will continue to be an
important tool for creating innovative experiences moving forward.
We
have already seen Tmall post up an early listing for an XFX variant of
the Pro Duo, and retailers should be showing other OEMs variants today
as well. At current, AMD's base design is expected to be the sole
variant of the Pro Duo.
Source: AMD
Read More ...
AMD Releases Radeon Software Crimson Edition 16.4.2 Hotfix
With
a couple of weeks since their last driver release, AMD has handed us
another update. Alongside a list of fixes, and a focus on a narrow set
of issues, the new version has now been given full support for external
GPU docks using Thunderbolt 3 via AMD's XConnect platform.
Radeon
Software Crimson Edition 16.4.2 brings the Driver version to
16.15.2401. With the new driver version comes a list of gaming updates
with a heavy focus on Crossfire. Along with new Crossfire profiles for
both Elite Dangerous and the new Need for Speed title, we have a list of
12 other fixes: eight of them are for various issues related to
stuttering, flickering, or corruption in various games while playing
with Crossfire enabled, and the other four target adjustments to Radeon
software settings. These fixes include issues such as games failing to
show up in the supported list, the power efficiency toggle showing up
for some unsupported products, and some DX9 applications being unable to
run with AMD Crossfire disabled. The last two relate to some users of
the Radeon R9 380 experiencing slower than expected fan speed and GPU
clocks on some AMD products remaining in a higher clock state after
recovering from an application crash.
More importantly,
this driver provides full support for AMD XConnect technology. With
XConnect support, a system can have TB3 dock compatibility with either a
Radeon R9 Fury, a Nano or a 300 series GPU housed in the external
enclosure. As reported previously, AMD does make clear that a system
also requires BIOS support alongside compatible drivers alongside the
external TB3 dock. AMD also states in the fine print that not all
external enclosures are pre-configured with an AMD Radeon GPU (so your
mileage may vary), and also some external enclosures may not feature
user upgradability.
As always, those interested in
reading more or installing the updated hotfix drivers for AMD’s desktop,
mobile, and integrated GPUs can find them either under the driver
update section in Radeon Settings or on
AMDs Radeon Software Crimson Edition download page.
Read More ...
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