Name: Is Apple's Winning Streak Finally Over?
Uploaded: 2016-01-27
Duration: 2 min 16 s
Description: Fortune's Andrew Nusca and Robert Hackett discuss.

[ SOUND ] Apple recorded the largest profit in corporate history last quarter. $ 18. 4 billion, but sales of it's iPhone, it's cash cow, are slowing, Robert, is Apple's gravy train coming to an end? Yes sir, Andrew, the gravy train is over, it is nearing the station, and decelerating. Come on. Let's talk revenue. So you've got the MacBook, that's declining in sales. The iPad, declining in sales and the iPhone, its growth is beginning to stagnate. So Apple has a real situation on its hands if it wants to continue to perform at the same level it has been over the past few years. But this is crazy talk. We talk 18. 4 billion dollars in profit. Huge, huge, right? The money that's made, that's tens of millions of iPhones sold in the last three months. The last three months before that, tens of millions of iPhones sold. Last three months before that, tens of millions of iPhones. They're selling a lot of phones here and if the gray train's coming to an end, there's a whole lot of gravy left, don't you think. There's no disputing that Apple's a massively profitable company. But this is a company that makes its money on devices and hardware. And if there's no good product, no blockbuster success in the works, in the pipeline right now, I don't see how it can continue on the same trajectory. Apple's reportedly working on an Apple Car, but that's years from development. So if it wants to continue to grow at the pace that it has been, it's gonna hit some serious road blocks. But you're thinking about the wrong thing. Yes, Apple sells a ton of hardware, but if you listen to Tim Cook during the earnings call. He was talking all about services. Right, Apple has a huge install base. All those iphones, all those ipads. Yes, even the mac books and the watches. Those are existing customers and if Apple can continue to sell. A subscription, software, services, things that recur in revenue. It can generate even more money from its existing customers. Subscriptions are presenting an excellent opportunity for Apple to take but people like to talk about Apple being a hardware and software company. They always say how it's highly integrated between the two. But, I mean, really Apple when you get down to it, it is a hardware company. Again that is where they make their money and if you look at some of their forays into software recently like Apple News or Apple Maps say, they haven't been smashing successes so that could be troubling for the company. That's a fair point. For one show that's always beating expectations come to fortune. com for more tech debate.

Is Apple's Winning Streak Finally Over?

Fortune's Andrew Nusca and Robert Hackett discuss.