Apple’s earnings press release led with the Cook quote on the active device growth, and CFO Luca Maestri mentioned it twice in his prepared remarks. In the Q&A, the topic came up in 4 of the 12 questions.
Apple did not report the base’s growth rate as they did in the December quarter (up 8%), but they did report it grew which is impressive given products revenue was down 4.6% y/y in March. That means more Apple customers are adding devices, and many of the devices that get turned in/resold are being refurbished and sold to first-time Apple customers. The used Apple device story is emerging as the company’s avenue to target the most price-sensitive smartphone buyer. While Apple does not directly benefit from the sale of a used device, there is a long-term revenue opportunity of selling services and capturing hardware upgrades in future quarters.
I believe we are entering a new chapter in how investors view Apple. Over the next five years, I expect investors will increasingly see Apple as a can’t live without consumer staples company. The stock’s reaction to a soft June revenue guide is the latest evidence that this investor shift is happening. The Apple flywheel is alive and well, following a 20-year success story in which consumers buy one Apple product, fall in love, buy another product, add a service, upgrade, and repeat.