Alibaba revenues soar but profit column takes a hit on the spreadsheets

Alibaba comfortably passed analyst estimates for the three months ending June 30, as total revenues soared 61% year-on-year.

Total revenues for the period stood at roughly $12.2 billion, while the team brought in net income of $1.1 billion. Profits at the business have dipped quite considerably, 45% compared to the same period in 2017, though this was primarily due to share-based compensation for Ant Financials’ recent fundraising, and investments in new revenue channels.

“Alibaba had another excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem,” said CEO David Zhang. “Our China retail marketplace business continues to gain share, with New Retail initiatives driving further revenue growth and enabling our retail partners to seamlessly serve customers. We are executing our plan of providing more value and choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce.”

“The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validates our strategy of investing in customer experience, product, technology and infrastructure for the future,” said CFO Maggie Wu.

The core eCommerce business performed strongly as you would expect, the Taobao site increased monthly active users to 634 million for example, though the new investments are starting to make some waves.

The cloud computing business almost doubled with revenue growing 93% year-over-year to roughly $710 million, driven by land-grabbing additional customers and also increased interest in higher value-added products and services. During June, Alibaba Cloud’s product innovation focused on big data analytics, artificial intelligence, security and IoT applications, though products which enabled migration from on premise data centres onto the public cloud platforms were a notable driver of revenues.

Over at the Digital Media and Entertainment business unit, revenues reached roughly $910 million, a year-on-year increase of 46%. Success has been primarily attributed to Youku, its video hosting service and China’s answer to YouTube, with daily average subscriber growth of 200% year-over-year for the period. Part of this growth will be down to partnerships, such as the relationship with China Central Television (CCTV) to stream all 2018 FIFA World Cup games to hundreds of millions of fans in China. While this is of course a massive boost for advertisers, without such a show-piece next year, the team will have to think of some new ideas.

While Alibaba does seem to now be taking the traditional internet giant approach to business, grow today and make money tomorrow, it does not usually sit well with investors who are in it for the cash. That said, investors will be happy to see success in the new ventures. Profits might be down, but with the cloud and digital media business units performing well, investors will sit easier with other investments in areas such as its AI-powered voice assistant Tmall Genie and online food delivery service Alibaba is demonstrating industry trends are not just myths.

Investors will also be extra pleased with this performance considering the woes of rival Last week, the group reported a 31.2% year-on-year rise in revenue to $17.8 billion, though this was short of analyst expectations. This quarter usually sees a boost in revenues due to the mid-year ‘618’ shopping festival, though execs blamed a crossover with national holidays as the reason for declined sales this year.

There’s nothing quite like money in your pocket, but Amazon has proved the ‘invest in tomorrow’ business model can work. Alibaba might have bought itself a bit more breathing room to forget about profits and focus more intently on diversification.

Payments challenger Adyen post strong growth following June IPO

In its first earnings release since going public in June, payments firm Adyen is proving it can live up to the hype.

After pricing its shares at €240 each ahead of the launch, it opened for trading on June 13 on Amsterdam’s Euronext exchange at €400 a share. With such a leap, a lot would have been expected from the firm, and it certainly delivered.

For the first six months of 2018, Adyen generated €156 million in total revenue, up 67.3% year-on-year, processing more than €70 billion of transactions, and collecting €48.2 million in net income up 74.6% year-on-year. Investors will certainly be pleased with growth at the company which counts the likes of Uber, Spotify and Cathay Pacific as customers.

Europe is still the major earner for the company, accounting for more than half of the processed transactions and roughly 65% of net revenue, though growth in other regions was incredibly healthy. Asia Pacific was a significant boost for the business, 147.5%, though the North American region was also incredibly positive, 142.9%.

“In the first half of the year we saw a continuation of the transformation of commerce, leading to an increased merchant focus on accepting payments across channels and geographies,” the firm said in a letter to shareholders. “This trend, coupled with changing shopper behaviour, the rise of mobile payment methods, and the increasing pressure on retailers’ operations, highlighted the benefits of our single platform, and consequently driven significant growth in the first half of 2018.”

The success has been attributed not only to doing what it does traditionally very well, but also branching out into new verticals such as hospitality, restaurant chains and supermarkets. While these might be different environments, all are experiencing the same increase in demand for mobile payment from customers.

Another key aspect of growth here seems to be the single platform. Many businesses around the world will use different payment solutions dependent on the environment, some of which will be legacy systems. The complications come with marrying the data to customers across the different platforms when trying to generate some sort of business insight from the data. A single platform, encompassing both online and offline transactions, allows the formation of data sets which can be used to inform future business decisions.

“Through our single platform, we provide a holistic view of payments, regardless of sales channel, delivering unique shopper insights while combating fraud and improving payment authorization rates,” the firm states.

While it all looks positive right now, another statistic which will keep investors happy is the recruitment efforts. Over the first six months, staff head count went up almost 40%, with 47.3% of these recruits taking up tech roles. While bolstering the sales team is certainly a positive move, such a focus on continuing the development of the platform will certainly add to the generated momentum.

International markets pay off for Xiaomi

Xiaomi has released its quarterly figures with breakthroughs in the Indian and Indonesian markets paying off for the budget smartphone manufacturer.

Over the last three months, Xiaomi reported total revenues of roughly $6.6 billion, a year-on-year increase of 63%, while profit stood at $826 million, a rise of 46%. Comparisons for the first six months accounted for an even healthier boost to the coffers, with total revenues up 75% and profits boosted by 57%.

Looking at the individual business units, smartphones accounted for the lion’s share of cash. The second quarter brought in roughly $4.5 billion, a year-on-year rise of 58%, with the team pointing to both an increase in volume of shipments and average selling price. Sales volume for the quarter reached 32 million units, up 43% compared to Q2 2017, with IDC estimating the brand was the fastest growing of the major global brands.

Over the last couple of weeks, Xiaomi has been claiming headlines with victories in the developing markets. Firstly, usurping Samsung for top spot in India was somewhat of a coup, but capturing 22% of the shipments across the second quarter in Indonesia (compared to 2% in 2017) perhaps indicates Xiaomi is going to be a genuine contender on the global scene. Progress can also be seen in Western Europe with launches in France and Italy, and the team claiming shipments across the continent grew 2700% compared to the same period in 2017. Overall, the international markets accounted for 36% of total revenues.

While Xiaomi is attempting to build foundations in the budget markets internationally, in China the premium smartphone market is the big target. In mainland China, average selling price of devices increased over 25% year-on-year in the second quarter of 2018, led by the Mi 8 launch, which sold over 1.1 million units in the first month. This might be a market which has gone through a tough couple of months, though Xiaomi believes China will return to growth in 2019, and is keen to streamline the portfolio to maintain progress in the premium devices segment.

Over in the smaller business units the story was still a successful one. Revenue from the internet services segment grew 63.6% year-on-year to $580 million, primarily focused on the Chinese domestic market. The IoT and lifestyle products segment grew 104% year-on-year in revenue to roughly $1.5 billion, with  smart TVs growing over 350% year-on-year. The team also claim to have about 115 million connected Xiaomi IoT devices, excluding smartphones and laptops, representing 15% quarter-on-quarter growth. 1.7 million users own more than five Xiaomi IoT devices, offering the beginnings of a successful convergence model.

For some time there have been questions over whether Xiaomi can offer a genuine threat on the global stage, though these numbers do seem to offer credibility to the challenge.

China Mobile adds 18mn mobile subs in first half – and that’s not a typo

China Mobile has reported its numbers for the first half, with the ridiculous figures just demonstrating how much potential there is for those who can crack the Great Firewall of China.

Total revenues stood at roughly $57 billion for the first six months of the year, a 2.9% year-on-year increase, while service revenues accounted for approximately $52 billion of that total. Amazingly, the company also saw net adds of 18.61 million mobile customers over the period, 27.32 million of which were 4G subscriptions. The total subscription base has now exceeded 900 million, with 4G penetration now standing at 74.7%.

“In the first half of 2018, market competition has intensified and cross-sector convergence has increased pace,” said China Mobile Chairman Shang Bing.

“At the same time, operators were required to take further actions operationally to comply with the state policy of ‘speed upgrade and tariff reduction’. Faced with this complex environment, across the China Mobile business, we closely adhered to the ‘Big Connectivity’ strategy and took considered moves to proactively tackle both market competition and other emerging challenges, launching various initiatives for the personal mobile, household, corporate and emerging businesses.”

“There was further integration of these four important growth engines, and at the same time a step-up in our reforms and enhancements to our management efficiency. Thanks to these collective and coordinated efforts, we have maneuverer along the course of our development and maintained satisfactory growth in our financial performance.”

On the network side of things, the team added an eye-watering 190,000 4G base stations to the landscape over the first six months, while future projects will continue to focus on improving in-door coverage across the country. Not only is the infrastructure investment required for the challenges of tomorrow’s 5G world, China Mobile also noted today’s market is becoming increasingly competitive as a new wave of high-data, low-cost tariffs hit the market.

In response, the team ‘activated tariff elasticity’ to meet customer demands and reduce subscription churn, while also creating a new tariff structure which leans on the increase data usage. Finally, the team improved the depth of its content offerings. With these three pillars in place, total handset data traffic increased by 153% across the six months.

Looking at the home broadband business, this is also heading north. The total number of subscribers now stands at 18.8 million with the team collecting more than 57% of the industry’s net additions across the half. The total number of broadband subscribers in China is now 128 million. While this is an incredible number, estimates put the total number of households in the country at around 450 million. The room for growth is astronomical.

When talking about the footprint and subscriber base China Mobile has, it is almost comical.

DT blames dodgy results on toll roads

Profits might have plummeted but that hasn’t stopped Deutsche Telekom from raising its full-year outlook as subscriber gains in the US business drags the rest of the group forward.

Total revenues for the last three months stood at €18.367, down 2.8% year-on-year, though profit nose-dived to €495, a decrease of 43%. The team has blamed this drop on a one-off payment of €600 million to the German government, settling a long-running legal dispute over the delayed implementation of a truck toll system DT designed with Daimler. Without the fine, profits would have increased by 3%.

“We remain firmly on track,” said CFO Thomas Dannenfeldt. “The trends in Germany and the United States are positive. At our European subsidiaries, we are again posting sustained growth.”

Looking at revenues in the individual markets, Germany declined by 0.9%, while the US accounted for a drop of 4.5%. Across the rest of Europe, revenues rose by 1.3%, while the Systems Solutions business unit increased by 42.2%.

The main success of the business here is in the US, T-Mobile US is continuing to make positive steps forward stealing market share from competitors, and also the convergence strategy across Europe. Across the last twelve months, the number of customers opting for convergent products rose 48% to 2.7 million.

The hot topic for investors and industry onlookers remains to be the merger with US competitor Sprint. No new information has been offered, though the sluggish regulatory process might be a tricky one. Similar deals have of course been rejected by watchdogs in years gone, though with the unpredictable nature of the Trump administration, who knows which direction it could go.

Snap has a minor dip but can it learn Facebook’s lessons?

Snap has reported its numbers for the second quarter, and while the news is not wall-to-wall blockbusters, there does seem to be long-term confidence in the business.

For the first six months of 2018 Snap brought in total revenues of $492.9 million, up 49% year-on-year, while the net loss narrowed from $2.6 billion to $739 million. This might weigh heavily on the spreadsheets, but it wasn’t too long ago when Facebook was also haemorrhaging cash. The walled garden business model takes time to develop, and Snap is heading in the first direction after years of looking like nothing more than an expensive procrastination tool for teenagers.

“I’m really excited about the progress we’ve been making at Snap, and optimistic about the opportunities ahead as we continue to improve our team, reinforce our culture and invest in innovation,” said CEO Evan Spiegal. “We have focused a lot of our time and effort this past year on developing our team, culture and leadership that we need to rapidly scale our business.”

Perhaps the most worrying sign from the announcement is the Daily Active Users (DAUs). This number increased 8% to 188 million in Q2 2018, compared to 173 million in the same period of 2017, though it was down 2%, three million users, sequentially. Trends are heading the right direction year-on-year, so this might be nothing more than a blotch on a single page in the story, at least that it what Spiegal believes. Most importantly, investors seem to buy the explanation as share price barely moved.

The dip has been blamed on the redesign launched by the team earlier this year, which was not received on the best of terms by users. This was not a successful initiative by the team, and disastrous feedback led to a complete rethink. Spiegal highlighted the main frustrations have been addressed and corrected. It was a necessary move though, it took the users from engaging exclusively with friends to introduce ‘publisher stories’, and the most turbulent waves to seem to be in the past.

Aside from innovative partnerships, this does seem to be one of the growth factors. In terms of monetization, it does seem to be one of the simplest routes to market. It might not be the blockbuster display advertising which Facebook and other social media platforms are used to, but it is a more engaging way to monetize the user base. The number of users who watch publisher stories every day has grown by 15% over the course of 2018, partly fuelling the 35% increase in ARPU to $1.40.

The ARPU statistic is an interesting one here. $1.40 is not the end of the world, though it is quite a bit down on Facebook’s worldwide average of $5.97 and significantly shorter on the $25.91 it makes from users in the US and Canada. The next couple of quarters might give an indication of what type of platform Snapchat will eventually become.

Facebook is the master of monetizing the walled garden business model, though it has come at the expense of engagement recently. The reason youngers generations are favouring platforms such as Snapchat and Instagram over Facebook is because of how much commercial activity there is. Facebook got greedy and it has been affecting the future prospects of the business as user growth in key Western markets stalls.

Snap has to learn a lesson here. Making the platform overly commercialised, like Facebook has become, will be good for the spreadsheets for the next couple of quarters but the long-term impact could be detrimental. Once you lose the interest of the user, it will be tough to regain; there are plenty of other options on the internet to keep them busy.

Fortunately, Snap does seemed to have developed a solid culture of innovation. The short form videos are performing very effectively, 11 ‘Shows’ reached a monthly audience of over 10 million users, up from 7 in Q1 2018, while other features have been copied by competitors. The mentality does seem to develop new features with entertainment in mind, not direct monetization. Cash will come as long as you keep the users busy in the garden.

Users will define the prospects of the business and engagement will have to be maintained. Should Snap be able to keep greedy investors at bay, not sweating advertising revenues out of the user too intensely, this will certainly be a company in the money.

T-Mobile US hits 21 consecutive quarters of 1mn subscription adds

Another three months have passed and yet again we are reporting about the eccentric John Legere and his unique use of punctuation cooing over 1.6 million net additions to T-Mobile US subscriber numbers.

With these new customers in the 21st consecutive quarter of at least 1 million net adds, it now takes total subscribers in the T-Mobile US grasp to 75.6 million. Total revenues are up 4% to $10.6 billion across the second quarter, while the 4G LTE network now covers now covers 323 million people, just 2 million short of the end-2018 target.

“T-Mobile just recorded its best Q2 in company history,” said John Legere, CEO of T-Mobile US. “That means 21 quarters with over one million net adds, record-high service revenues, industry-leading postpaid phone net additions, and record-low postpaid phone churn. Our business is strong, our strategy is working and we won’t stop.”

While these numbers are certainly something for the boisterous and unconventional CEO to shout about, the earnings call leaned naturally towards the much-anticipated tie up between T-Mobile US and Sprint. While the deal is working its way through the regulatory approval process in typically slug-like fashion, there are whispers in corners of the industry it may well be blocked by the watchdogs.

Fortunately for T-Mobile US, aside from scale and more efficient operational processes, it doesn’t seem to need Sprint that much. Yes, the boost to subscription numbers, the existing footprint and certain spectrum assets would be welcomed, but T-Mobile US is a company which is continuing to gather momentum on its own. The team boasted of an aggressive deployment of 600 MHz across the quarter, augmenting existing low-band capabilities on 700 MHz, while also being awarded the fastest LTE network according to Ookla, and winning 5 of 7 categories in most recent OpenSignal study.

One area of concern might be ARPU. Competitors have started to show better numbers when it comes to service revenues through increasing ARPU, while T-Mobile US improvements have come as a result of acquiring customers. At some point it will start to become prohibitively expensive to acquire new customers in the fashion investors are becoming comfortable with. Executives might start looking back at the declining ARPU, it dropped 1.2% to $46.52, as a missed opportunity. The declines being witnessed are not massive, but incrementally they will start to add up.

Period ARPU
Q2 2018 $46.52
Q1 2018 $46.66
Q4 2017 $46.38
Q3 2017 $46.93
Q2 2017 $47.01
Q1 2017 $47.53
Q4 2016 $48.37
Q3 2016 $48.15

Of course, in relation to competitors increasing ARPU numbers, Legere was as combative as you would expect:

“And let me just add a couple of things, when you really deep dive some of these ARPU changes and trajectory with the competitors, you’ve got to remember that they’re doing it by screwing the customer. Administrative fees are a huge part of what’s happening there and you’re taking that out of the pockets of existing customers.”

Irrelevant as to whether you like the colourful attitude of the CEO, or find the purposely-obnoxious presentation irritating, you can’t argue with results. T-Mobile US is continuing to gather steam and be a pain to competitors.

Postpaid or prepaid doesn’t matter if you nail experience – Three UK CEO

While many telcos are keen to convert customers to valuable postpaid contracts, Three CEO Dave Dyson doesn’t believe the type of payment is relevant, as long as you keep your customers happy.

“We are quite agnostic, so we just view it as a payment method,” said Dyson. “As long as you create a good customer experience you shouldn’t have to worry about the flight of customers. We’re very open to pay-as-you-go solutions on 5G.”

The comment came during a conversation with as the telco reveals its financial results for the first half of 2018. While Three still sits in fourth place in terms of subscriptions, the numbers are looking healthy. Revenues were relatively flat year-on-year, demonstrating a satisfactory 2% increase to £1.19 billion, though subscriptions are growing. The first six months of 2018 saw a 6% jump, taking the total up to 10.1 million.

The increase in subscriptions also goes as far to explain the decrease in ARPU, which dropped from £18.79 to £17.97. Some might be worried about this statistic, though Dyson pointed out the boost in subscriptions compensated for this metric. For Three, it was important to keep subscriptions moving in the right direction, securing a customer base which can be monetized down the line. Looking forward there are plenty of opportunities to increase profitability.

One of these strategies relates to targeting new demographics for the firm. With the launch of brands like Smarty, which targets cash-conscious consumers, or a wholesale partnership with Superdrug is bringing new customers into the fray. These low-value, low data usage customers will dilute the revenues and data usage statistics of Three, but it is simply a means for the firm to continue grabbing market share from competitors.

Another interesting development is moving away from channel sales. Over the first six months, Dyson claims 99% of all handsets sold were through Three’s own channels, offering greater control over the monetization of these users, but also allowing Three to have more of a direct impact on customer experience. Again, this ties back to the post/prepaid argument, if you focus on creating a positive customer experience, you shouldn’t have to worry about strapping customers down with lengthy contracts. Gaining more control over distribution and the relationship with the customers, as well as seasonal demand increasing towards the end of the year with major handset launches, should see ARPU increase according to Dyson.

Of course, 5G is never far from the conversation either, and while Three boasts about it spectrum collection over the last couple of years, the team is remaining relatively tight-lipped over the launch day. Despite US telcos throwing caution to the wind when it comes to commercially sensitive information, UK operators are remaining coy. Three will switch on 5G mid-way through 2019, with plans to launch more trials towards the end of the year, but the fate of 5G is in the hands of the device manufacturers.

“We have all the components ready in the bag, so we will have trials up and running later this year,” said Dyson. “Availability of devices; this is key. Until the devices are there we are not going to make too much progress. Indication is that they will be around mid next year, but the smaller manufacturers might be sooner. We haven’t heard from Samsung or Apple, but they won’t be too far behind as they will be targeting the high value customer and won’t want to miss out.”

Interestingly enough, Three’s Fixed Wireless Access plans (FWA) might make it to the finishing line first. There isn’t a preference for either offering at Three, though FWA devices might be quicker to the market, allowing Three to move forward. In reality, the launch of mobile or FWA services will probably come at the same time, though fate is seemingly in the hands of the manufacturers.

With the 5G horizon getting closer, this is perhaps another reason Dyson and his team are not particularly worried about ARPU stats heading south. Although telcos are yet to reveal pricing strategies, it would be a fair assumption tariffs will be set as a premium, at least for the first months. With Three holding the largest spectrum portfolio for 5G in the UK, these statistics are likely to feature heavily in marketing campaigns. It might not be a bad bet to assume Three will edge its nose in front in the first couple of months.

The first six months of 2018 were nothing glorious for Three, though solid would be a fair description. ARPU seems to have been sacrificed for the moment in pursuit of new subscriptions, though whether this has any defining impact in the long-run remains to be seen. Dyson pointed to transformational projects in the core network with Nokia, while reformed IT systems should also improve customer experience. Combined with 5G trials, the next six months should be viewed as very important from an operational perspective for Three.

Three could still be viewed as a challenger in the UK telco space today, though 5G could certainly shake things up.

Maybe Fitbit can be more than just a niche exercise product

Fitbit might not be turning in the results of yesteryear, but riding the wave of Versa to beat analyst expectations demonstrates there might be mass-market appeal for the brand.

Total revenues stood at $299.3 million for the three months ending June 30, and while this is still considerably down on the $353.3 produced in the same period for 2017, it beats expectations from analysts. The success for this period has been attributed to Versa, the team’s attempt to break away from the fitness-tracking niche and enter into the mainstream smartwatch market.

“Our performance in Q2 represents the sixth consecutive quarter that we have delivered on our financial commitments, made important progress in transforming our business, and continued to adapt to the changing wearables market,” said CEO James Park.

“Demand for Versa, our first ‘mass-appeal’ smartwatch, is very strong. Within the second quarter, Versa outsold Samsung, Garmin and Fossil smartwatches combined in North America, improving our position with retailers, solidifying shelf space for the Fitbit brand and providing a halo effect to our other product offerings.”

Overall, Fitbit sold 2.7 million wearable devices across the quarter, with the average unit price increasing 6% year-on-year, primarily down to the newer product releases. Those devices released in the last twelve months accounted for 59% of total revenues, providing confidence in the brands ability to diversify from the niche which has served it so well through the underwhelming years for wearable devices.

Fitbit launched the Versa on 16 April and boasted about selling one million devices just over one month later. The product is more in-line with what you would have expected from a smartwatch device, moving beyond the fitness tracking niche Fitbit has become known for. Just looking at the device demonstrates the shift, though what’s on the device is what counts, as it features all the apps we have become accustomed to. It is a big move from Fitbit, and it looks to have worked.

Perhaps this is a positive sign for the wearables industry on the whole. For years, Fitbit appeared to be the only wearables brand which could survive as devices failed to meet the expectations of consumers. Maybe the consumer was not ready for the wearables craze, but the simplicity of Fitbits fitness trackers worked. In being able to move out of the niche and into mass-market appeal, this might be a sign the general public is ready to embrace wearables on the whole.

Looking at the share price, it is still way down on the peak from 2015, some 87%, but there have been signs of recovery across 2018. There is a notable dip in the last 5-6 weeks, though should Fitbit be able to maintain this venture into the mainstream market, we can only see the share price going up.

Fitbit Shareprice

iPhone X drives Apple growth past analyst expectations

Apple has reported its quarterly results for the three months ending June 30, collecting an eye-watering $585 million in revenue a day over the period.

Total revenues stood at $53.3 billion, a year-on-year increase of 17%, with iPhone X sales and the services business unit leading the charge with year-on-year rises of 20% and 31% respectively compared to the same period of 2017. While it might have been a slow-start for the ridiculously expensive flagship device, the premium seems to compensated for slightly jaded 1% increase in smartphone shipments.

“We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth,” said CEO Tim Cook. “Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline.”

“Our strong business performance drove revenue growth in each of our geographic segments, net income of $11.5 billion, and operating cash flow of $14.5 billion,” said Luca Maestri, Apple’s CFO. “We returned almost $25 billion to investors through our capital return program during the quarter, including $20 billion in share repurchases.”

Looking deeper into the business, Cook pointed towards first time buyers of the iPhone as a win, while the services unit brought in record revenue of $9.5 billion. Paid subscriptions from Apple and third parties have now surpassed $300 million, an increase of more than 60% in the past 12 months, while the CEO also claims the App Store generated nearly twice the revenue of Google Play so far in 2018.

Services is a significant growth area for the iChief, which seems to be able to print cash with whatever it touches (except original content… who remembers Shark Tank). Apple Music grew by over 50%, AppleCare revenue grew at its highest rate in 18 quarters, and Cloud services revenue was also up over 50%. When you also tie in the wearables division, which finally seems to be making progress, its smart speaker reaching new markets, Siri improving and products like Apple TV gaining a bit of traction, Apple is giving a perfect lesson in exploiting customer loyalty.

Looking forward, the Apple train looks like it will continue to print off cash. For the next quarter, the team expects revenue between $60 billion and $62 billion, compared to $52.6 billion brought in during Q4 2017, with a gross margin between 38% and 38.5%.