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Rapid Reaction: Apple Is Still A 'Cash Machine' And A 'Whole Ecosystem Story'

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Rapid Reaction: Apple Is Still A 'Cash Machine' And A 'Whole Ecosystem Story'

Shares of Apple Inc. (NASDAQ: AAPL) gained 4% after reporting encouraging fiscal third-quarter results. The iPhone maker reported a top- and bottom-line beat and Services revenue hit a record higher. Several Apple experts weighed in after the report.

Ecosystem Strength

The main takeaway from Apple's report is the strength of its ecosystem, Alison Porter, a Portfolio Manager at Janus Henderson Investors, told CNBC. Apple managed to show a 12% decline in iPhone revenue compared to the same quarter last year, yet total revenue rose year-over-year.

"It's a whole ecosystem [story]," she said. "It's [iPhone] Max, it's iPads, it's moving into enterprise, it's in services. It's about the whole Apple ecosystem."

'Cash Machine'

Exiting Apple's earnings print, it's evident the company is a "cash machine," Loup Ventures's Gene Munster said on CNBC. Apple generated twice as much cash in the quarter as Amazon.com, Inc. (NASDAQ: AMZN) and Facebook, Inc. (NASDAQ: FB) did combined in the June-ending quarter.

"The bigger picture here is this story that I think gets largely missed by the Street," he said.

New Business Model Needed

Apple's recent product launches is defined as incremental improvements instead of revolutionary, professor at IMD Business School Howard Yu told CNBC. The two most recent examples include the launch of an Apple-branded credit card still tied to the iPhone and the acquisition of Intel Corporation (NASDAQ: INTC)'s modem business is to help launch a 5G phone.

"What Apple needs is to branch out a new business model -- much like Amazon going from B2C to B2B providing cloud based services," he said.

Apple's stock traded around $217 per share at time of publication.

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Posted-In: Alison Porter Apple Earnings CNBC Gene MunsterEarnings News Top Stories Media Best of Benzinga

 

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