Apple’s Q4 Earnings: Keepin’ it Real in the Enterprise
Courtesy of Investor's Business Daily
Everyone listening to Apple’s Q4 2016 earnings call was looking for insight on the company’s growth trajectory. What will be the big, new technology bets? Some of us listening, think we have a least one clue.
iOS is the dominant enterprise mobility platform. According to the latest Mobile Security and Risk Review, Apple devices account for more than 80% of the business market share globally. A large enterprise app and services ecosystem is building up around iOS just the way it rallied around the consumer opportunity. Apple’s enterprise partnerships include the largest of business suppliers: IBM, Cisco, SAP, and Deloitte, along with hundreds of business app developers and go-to-market channel partners. This is why we, along with our enterprise customers, are equally interested in how Tim Cook and Luca Maestri view the overall revenue contribution of corporate-purchased Apple products.
Typically Apple does not share enterprise-based revenue contribution. The Q4 2015 earnings call was an anomaly. At the time, Tim Cook stated that, “...enterprise markets accounted for about $25 billion in annual Apple revenue in the last 12 months, up 40% over the prior year and they represent a major growth vector for the future.” This figure would make Apple one of the largest enterprise companies in the world.
The technology hardware space became even more competitive in 2016. Apple’s year-on-year revenue growth dropped. In spite of this lower growth, iOS continues to be favored by both consumer and enterprise users. Apple gave no update on the enterprise revenue contribution during this quarter’s call. None of the analysts in the Q&A session followed asked for specifics.
We did, however, pick up on some hints at the contribution of Apple’s enterprise business in Q3. Cook and Maestri offered anecdotes that provided insight into what Apple considers meaningful to its enterprise business. They also provided updates on metrics they share on every earnings call.
We’ve organized these comments to address 4 questions which our enterprise customers typically ask when they are considering a large mobility investment.
Having served more than 12,000 customers, MobileIron has daily insight into the transformative impact Apple has in the enterprise. As an Apple mobility partner, MobileIron is proud to be an enabling force in the Apple-led business disruption taking place around the world.
- Are existing customers satisfied? Maestri reported…
- Corporate iPad buyers reported a 94% satisfaction rate.
- Corporate iPhone buyers reported a 95% satisfaction rate.
- Do new and existing customers have solid purchase intent in the near future? Maestri reported…
- Corporate iPad buyers have a purchase intent of 68% for the December quarter.
- Corporate smartphone buyers have a purchase intent of 79% to purchase iPhone for the December quarter.
- Apple products are typically more expensive than Android smartphones or PCs. Why should we pay a premium? Maestri shared an details from a recent total cost of ownership (TCO) report prepared by IBM, a very large Apple customer.
- IBM reports that PCs are three times the cost to manage, drive twice the number of support calls, and are five times more likely to require a follow-up appointment to resolve an issue than Macs. Thanks to much lower support cost and significantly higher residual value, the company is saving as much as $535 per computer when comparing the total cost of Mac ownership to a PC over a four-year life cycle.
- Our expertise is Windows-based, in order to make iOS and macOS our enterprise platform, we will need enterprise-grade apps. Isn’t Apple focused on consumer apps? In addition to working with IBM and SAP, Cook highlighted the Deloitte partnership announced last month.
- Just last month, we announced a partnership with Deloitte to help companies quickly and easily transform the way they work by maximizing the power, ease of use, and security of the iOS platform. Deloitte is creating a unique Apple practice with over 5000 strategic advisors focused on helping businesses transform work functions across the enterprise.