ParisLemon — Quick Observations On Apple's Q2 2014

In no particular order:

• A 7-for-1 stock split is insane (in a good way).
• 800 million iTunes accounts and almost all of them have credit cards attached. This is perhaps the most important (and to some extent, most overlooked) part of Apple’s business going forward. They’ll hit a billion very soon.
• Tim Cook’s second explanation on the iPad “miss” was better than his first. At first, he said it was channel inventory and sell-through. But later he spoke about how fast it grew — faster than any other product Apple has ever done — and implied that it’s hard to maintain such growth. Both explanations may be true, but the first is a technicality, the second is something everyone should be able to understand.
• iPad revenue for the quarter was $7.6 billion. If my math is correct, the iPad has brought it roughly $32 billion in revenue in the past 12 months. If it were a stand-alone business, those numbers would place it in the top 100 of the Fortune 500. Think about that for a second.
• By the same count, the iPhone as a stand-alone business would be in the top 25 of the Fortune 500.
• Overall, this quarter was only the 15th best in terms of profit in the history of any company in the world.
• Apple cash horde was actually down this quarter due to the buybacks. But it was almost all U.S. cash that was down — Apple still refuses to repatriate the overseas cash and instead is borrowing debt to pay for these massive buybacks. At one point, it sounded like Apple was basically (but indirectly) asking the U.S. for a tax holiday to bring some of their money back to the U.S.
• The iPhone ASP decreased by quite a bit. But it wasn’t because the iPhone 5c is selling well, it’s because the iPhone 4S continues to sell well.
• That said, margins overall were still amazing at 39.3 percent.
• Angela Ahrendts is starting next week, nullifying reports to the contrary.
• Tim Cook continues to sound more confident about the Apple TV as a product category as he announced “about” 20 million units sold. If I had to guess, I think we’ll see a new Apple TV product announced well before the iWatch this year.