[vc_row][vc_column][vc_column_text]Apple reported its highest-ever net profit in the holiday quarter as revenues swelled way beyond forecasts to $111.4bn on the back of a 57 per cent rise in sales in greater China.
The company’s net profits rose 29 per cent to $28.8bn, against forecasts they would rise 6.3 per cent, while earnings per share jumped 35 per cent to $1.68. Forecasters expected revenues of about $102bn.
“We couldn’t be happier with the December quarter and we couldn’t be more optimistic about the future,” Luca Maestri, Apple’s finance chief, told the Financial Times.
All five of the $2.4tn company’s product categories grew at double-digit percentages, led by a 41 per cent gain in iPad sales and a 30 per cent climb in wearables, which include AirPods and the Apple Watch. The iPhone — whose sales grew 17 per cent from a year ago to $65.6bn, reflecting 59 per cent of Apple’s revenues — was the group’s slowest accelerating category because of supply constraints and the delayed launch of its first 5G-enabled smartphones.
It is all the more remarkable, then, that “Apple shipped the highest number of smartphones ever by any vendor in the history of the smartphone”, according to Francisco Jeronimo at IDC.
Apple no longer discloses unit sales but Mr Jeronimo estimated the company shipped 90.1m iPhones in the quarter, beating a long-held record of 88.5m units of smartphones shipped by Samsung in the first quarter of 2014. He estimated the average selling price was $728, down from $869 a year before.
“Apple is championing 5G sales and it will be the catalyst for 5G adoption in many countries across the world,” Mr Jeronimo said.
The company’s shares fell more than 3 per cent in after-hours trading, however. “It’s fair to say it’s a ‘sell on the news situation’,” said Scott Kessler, analyst at Third Bridge, a research company. “There’s no question the results are strong all around, operationally and financially.”
One disappointment for investors is that Apple declined to offer any guidance for the March quarter, citing uncertainties around the pandemic.
$21.3bn Apple’s revenues in Greater China for the quarter
“It becomes very easy for things to get really difficult, really quickly,” Mr Maestri said, adding that many Apple stores remain closed in the Americas and Europe.
Nor did Apple release a new forecast for how its services division will grow in the next few years, having attained its previous goal of doubling service revenues between 2016 and 2020 six months ahead of schedule.
Revenues from “everything-but-the-iPhone” rose 28 per cent, a new record pace that underscores the success of the Mac computer, AirPods earphones and Apple Watches, as well as how relatively small fees for its services — such as the $9.99 monthly cost for the Apple Music streaming offering — add up when marketed to 1bn iPhone users.
“You can’t even name all the services on one hand any more,” said Mr Kessler.
In greater China, revenues surged a “phenomenal” 57 per cent to $21.3bn, reflecting pent-up demand for 5G iPhones, Mr Maestri said.
Chief executive Tim Cook added in an earnings call that China was more than just an iPhone story, however, as sales of iPads, Mac, Wearables and accessories were all above average as the economy recovered from the pandemic.
China demonstrated last quarter that it “is sort of beyond Covid”, he said. “They were very much in the recovery stage. This quarter, there are different reports about some cases in some places, and lockdowns occurring, but we haven’t seen that in our businesses yet.”
All other geographic segments set record highs, too, with revenues in the Americas up 12 per cent to $46.3bn, European sales up 17 per cent to $27.3bn, Japan revenues up 33 per cent to $8.3bn, and the rest of Asia up 11 per cent to $8.3bn.
Mr Cook suggested growth would continue at a high level as more countries adopt next-generation 5G mobile technology and non-Mac users enter the Mac ecosystem by switching to iPhones or buying Apple’s computers.
In November Apple introduced two laptops and a desktop Mac Mini equipped with the company-designed M1-chip, which had the potential to lure in more consumers. “The M1, I think, gives us a new growth trajectory that we haven’t had in the past,” he said.
On Wearables the Apple chief said: “We’ve brought this thing from zero to a Fortune 120 company, which was no small feat, but I still think we’re in the early stages of those products.”[/vc_column_text][/vc_column][/vc_row]