Apple Calls Out Performance of Apple Pay

Apple reported a 3% year-on-year increase in revenue to 64 billion U.S. dollars for the quarter ending September 28, in constant currencies. It said iPhone revenue was 33.4 billion dollars, a year-over-year decline of 9%.

Revenue in Apple's Services division rose 18% to 12.5 billion dollars. Apple said it now has 450 million paid subscriptions across its services portfolio, compared to 330 million a year ago. For Apple Pay, revenue and transactions more than doubled year-over-year to more than three billion transactions in the September quarter, exceeding PayPal's number of transactions and growing four times as fast,  Apple said. Apple Pay is now live in 49 markets around the world and there are 6,000 card issuers on the platform.

Apple expects to report revenue of between 85.5 billion and 89.5 billion dollars for the current quarter, compared with 84.3 billion dollars last year. It said the forecast includes a negative impact from foreign exchange of over 1 billion dollars. Source: transcript of Apple's earnings call from The Motley Fool. 

Demand from Enterprises and Africa Boosts Orange

Orange reported a 0.8% year-on-year rise in revenues to 10.6 billion euros on a comparable basis for the third quarter of 2019. The telecoms group said the increase was driven by 7.6% growth in Africa and the Middle East, a solid performance by its smaller European operations (up 1.4%) and by enterprise revenue growth of 1.8%. Taken together, this more than offset a slight erosion in France of -0.4%, and a more pronounced decline in Spain of -2.5%, "due to a general market move towards the middle and low segments."

Stéphane Richard,  CEO of the Orange Group, said: “These results further attest to the relevance of our very high-speed broadband network strategy. In fixed, the strong commercial momentum achieved in fibre, supported by our investments, is clear: we reached more than seven million fibre customers in Europe this quarter, an increase of 25% compared to last year. This can be seen in France in particular where we achieved 178,000 net additions, a record figure for a third quarter. The launch of the Livebox 5 at the beginning of October should also maintain this momentum." source: Orange statement

HBO Max Takes Shape

In May 2020, AT&T's WarnerMedia division plans to launch the new video-on-demand service, HBO Max, in the U.S. at a price of 14.99 dollars a month. The company said it is "targeting 50 million domestic subscribers and 75 to 90 million premium subscribers by year-end in 2025 across the U.S., Latin America and Europe."

At launch, AT&T will offer HBO Max to the roughly 10 million HBO subscribers on AT&T distribution platforms, at no additional charge. HBO Now direct-billed users who subscribe directly through HBONow.com will also have access to HBO Max. AT&T customers on premium video, mobile and broadband services will be offered bundles with HBO Max included at no additional charge.

AT&T said HBO Max will launch with 10,000 hours of curated premium content including the entire HBO service, bundled with new "HBO Max Originals" that expand the breadth of the offering targeted at young adults, kids and families.  HBO Max will also pull from WarnerMedia’s 100-year content collection, including library content from Warner Bros., New Line, DC, CNN, TNT, TBS, truTV, Turner Classic Movies, Cartoon Network and Looney Tunes, while offering third party series and movies.

Within the first year of launch, WarnerMedia plans to expand the service to include an advertising-supported option. The company also intends to provide subscribers with "unique live, interactive and special event programming" in the future.

AT&T says it will make an incremental investment of between 1.5 billion and 2 billion US dollars during 2020 in HBO Max.  That investment includes spending on new content, foregone licensing revenue of content, operating expenses for the technology platform, and marketing. Source: AT&T press release

AT&T Forecasts Low Level Growth

AT&T reported a 2% year-on-year fall in revenues for the third quarter to 44.6 billion US dollars, on a constant currency basis. Declines in revenues from legacy wireline services, WarnerMedia and domestic video, were partially offset by growth in strategic and managed business services, domestic wireless services and IP broadband. AT&T said that HBO revenues were up 10.6% on higher content sales and stable subscription revenues.

AT&T forecast that its group revenues will grow by 1% to 2% per year from 2020 to 2022. It predicted this growth will be driven by "strength in Mobility, increased fiber penetration and WarnerMedia." It expects wireless service revenues to grow by more than 2% per year, as well as enjoying significant incremental growth from HBO Max (its new video-on-demand service) and targeted advertising from Xandr.

With reference to HBO Max, Randall  Stephenson, CEO, said: "This is not Netflix, this is not Disney, this is HBO Max, and it's going to have a very unique position in the marketplace.... This is going to be a meaningful business to us over the next four or five years. And we're talking a 50 million subscriber business and I'm really, really enthusiastic about this." He went on to clarify that AT&T forecasts that HBO Max will be able to attract 50 million U.S. subscribers within five years. source: AT&T collateral

Revenues and Costs Rising Fast at Alphabet

Alphabet, owner of Google, reported a 22% year-on-year rise in revenues (in constant currencies) to 40.5 billion US dollars for the third quarter of 2019. The growth was driven by mobile search, YouTube and cloud, Alphabet said. Source: Alphabet statement

Verizon Sees Big Step For 5G Ahead

Verizon reported a 0.9% year-on-year rise in revenues to 32.9 billion US dollars for the third quarter of 2019. It said the growth was primarily driven by higher wireless service revenue, partially offset by lower wireless equipment revenue and declines in legacy wireline revenue, predominantly in the business segment.

In response to an analyst question about 5G, CEO Hans Vestberg, commented: "There's coming a next-generation chipset in the second half of 2020. That's really when we think we're going to have a more massive deployment of [5G]. .... this is just the next step for us to get all the insights, billing, experience for our consumers, so we can really take a big step when it come to the next-generation chipset.

"Basically all phones coming out next year will be 5G capable. So we will have a range of phones coming out next year. There's one brand that we don't know, and we haven't talked about them, and again, they need to talk about when they will have a 5G phone. But all others will basically have their phones coming out. So I feel good about it, the performance has gone up dramatically. I mean if I look at the Galaxy coming out, the Samsung Galaxy, which is one of the first phones where in the beginning, we tune up to 500, 600 megabits per second, which we thought was great. That's doing 2 gig right now constantly in the ultra wideband. So we see also a clear improvement on the software tuning between the network and the handsets." Source: Verizon documentation 

Comcast Held Back by Broadcast TV

On a like-for-like basis, Comcast reported flat revenues for the third quarter of 2019 of 26.8 billion US dollars. Revenue in its cable communications division increased 4% year-on-year to 14.6 billion dollars, driven primarily by growth in high-speed internet, business services and wireless revenue. Comcast said high-speed internet revenue rose 9.3%, fuelled by an increase in the number of residential high-speed internet customers and rate adjustments.

Revenue in the NBCUniversal division fell 3.5% to 8.3 billion dollars, following a sharp fall in broadcast television revenue.  Excluding the impact of currency movements, revenue at Sky increased 0.9% to 4.6 billion dollars, driven by "higher direct-to-consumer and content revenue, partially offset by lower advertising revenue."  Source: Comcast statement

Amazon Flags Slowdown for Fourth Quarter

Marking an acceleration over previous quarters, Amazon reported a 25% year-on-year increase in sales to almost 70 billion US dollars for the third quarter of 2019 on a constant currency basis. Sales at Amazon Web Services were up 35% to almost 9 billion dollars.

However, Amazon warned that sales for the fourth quarter are likely to be between 80 billion and 86.5 billion dollars, which would represent year-on-year growth of between 11% and 20%. This guidance anticipates an unfavourable impact of approximately 80 basis points from foreign exchange rates, Amazon said. Source: Amazon statement

Tesla Ramps Up Model 3 Production

Tesla reported a 8% year-on-year fall in revenues for the third quarter of 2019 to 6.3 billion US dollars, driven by a 12% fall on automotive revenues. It blamed the fall on a decline in the average selling price of its cars as its lower-cost Model 3 becomes a larger part of its product mix, together with a sharp rise in the number of vehicles Tesla is leasing, rather than selling.

"We are positioned to accelerate our growth further through Gigafactory Shanghai, Model Y and also through increasing build rates on our existing production lines," Tesla reported. "These capacity increases will allow for higher total vehicle deliveries and associated revenue."

Tesla said customers have used its new Smart Summon feature, which was launched in the US in September, more than one million times to date. This functionality allows Tesla owners to summon their cars from up to 200 feet in a parking lot or driveway.  source: Tesla statement

Amazon Posts Big Leap in Brand Value

Apple continues to be the world's leading brand, according to a list of the top 100 most valuable brands published by agency Interbrand. But Amazon saw a much larger rise in brand value (24%) in the year since the last list. There are no telecoms brands in Interbrand's top 100. Source: Interbrand ranking

Netflix Reports Rapid Growth

Netflix reported a 35% year-on-year increase in revenues, on a constant currency basis, for the third quarter of 2019 to 5.2 billion US dollars.  The company forecast revenue of 5.4 billion dollars for the fourth quarter, which would represent a year-on-year increase of 30%.

Netflix said it added 6.8 million paying subscribers in the third quarter, while its ARPU (average revenue per user) was up 12% on a constant currency basis. Netflix added that it is spending approximately 10 billion dollars of "P&L spend" on content and approximately 15 billion in cash on content in 2019. Source: Netflix statement