Picking Apart Apple’s Q2 2016 Numbers ⇥ sixcolors.com

Apple’s thirteen year seemingly-limitless growth machine has — dare I say, finally — found its limits. In a greater context, this quarter didn’t suck: Wikipedia’s list of record corporate quarters is somewhat outdated, but Q2 2016 would easily rank among the top twenty-five of all time corporate quarters in both revenues and profits. There were plenty of high points sprinkled throughout their earnings release today, as Jason Snell notes in his wrap-up post.

But, as Snell’s year-over-year unit growth graph shows, for the first time, all of Apple’s product lines sold fewer units than in last year’s Q2. Nothing can escape that simple fact.

Additionally, Apple is forecasting a significant decrease in year-over-year revenue for next quarter: $41–$43 billion compared to about $50 billion last year.

The financial media is having a field day with this, and I’m not surprised — while Apple forecast it in their last earnings release, it’s still big news. The tech press gets to keep running clickbait “Apple is doomed” articles. But I hope Apple’s reaction to this is to dig their heels in and deliver some spectacular products.

And that brings me to a remark Tim Cook made today:¹

Creating value for shareholders by developing great products and services that enrich people’s lives will always be our top priority and the key factor driving our investment and capital allocation decisions.

I get that it’s an earnings call and extremely fragile shareholders want reassurance, but I wish this was phrased differently. What I hope Cook means by this is that Apple’s top priority is to create really great stuff and provide exemplary services that they hope people will buy and love, thereby assuaging trepidatious hedge fund billionaires.

But the way it’s phrased here is that shareholders come first, and Apple’s entire R&D strategy revolves around them. I sincerely hope this is just poorly articulated, because if it’s taken at face value, it’s deeply concerning.