Are we living in a post-smartphone world? Are consumers less interested in buying new handsets? Not when it comes to Apple.
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The tech giant held a quarterly headline on Tuesday, and told the business world that they managed to sell 48 million iPhones in Q4. That huge number doesn’t quite match expectations, but it was still more than enough to move earning and revenue on Wall Street.
The Cupertino, California company also took time to reassure everyone that people will continue to buy Apple products well into the holiday season. It projected December’s revenue to be in line with forecasts, and Apple CEO Tim Cook spoke on a conference call to analysts saying he expected iPhone sales to rise.
Apple’s revenue for Q4 climbed 22% to $51.5 billion, ahead on analyst expectations
The ubiquitous iPhone has been Apple golden goose for many years, but has become more of a cornerstone for the company since 2014’s iPhone 6 and 6Plus Models. Consumers purchased the biggest screens on a smartphone Apple has ever produced and quickly became Apple’s best-selling device ever. That pushed Apple to report the highest quarterly profits for any public company ever. Analysts and stock holders have concerned that Apple may not be able to top such a feat,
Cook, as CEO, was bullish on the future, citing a higher number of users moved from Android OS to iPhones, a growing business and enterprise base, and strong sales in the Chinese Market
[“…a relief given investors were bracing for the start of the (iPhone) 6S cycle to be down meaningfully.”…]
– Piper Jaffray analyst Gene Munster
Apple shares rose 3% in after-hours trading after the news.
Is Apple suffering from iPhone dependency?
Preorder for the latest Apple handset, the iPhone 6S and 6S Plus started on September 12th, and hit the market two-week later. While the new devices saw no major design changes, consumers purchased 13 million in the first weekend alone
The Q4 report only had a couple of weeks of 6S and 6S Plus preorder. The fiscal first quarter, usually Apple’s best quarter, may be the true test of how the 6S is actually doing.
Apple took time on its Tuesday report to project a revenue of between $75.5 and $77.5 billion for the December period. Analysts have recently been looking for $77.2 billion forecast from the company. Apple didn’t provide estimates specifically for iPhone sales in the next quarter, but it is widely expected to be in line with analysts figures, as iPhones now represent about 2/3rds of overall sales.
The expected sales figures helped to alleviate fears from some that Apple could post it’s first revenue decline in a decade.
A big reason for the strong iPhone sales was the Chinese market. In March, China surpassed America to become Apple’s biggest iPhone market, but worries about a slowing economy and weakening demand in China could make it less of a sure thing in the future. Apple reported its Q4 revenue in Greater China, an area that includes mainland China, Hong Kong and Taiwan, saying the revenue had doubled to #12.5 billion from this time last year. Previously, the third quarter saw that figure slide by almost 5%
Tim Cook said that while fears about China’s economy may be valid, Apple is not seeing any impact on its sales
Apple’s net income rose $1.96/share, a total of $11.1 billion, above analysts expectations
[…”You really can’t tell a difference if you look at our daily and weekly numbers…We’re investing for the decades ahead.”…]
– Tim Cook, Apple CEO
iPad business continued to be bad for Apple. Sales of Apple’s tablet dropped 20 percent from the year before, down to 9.9 million units, marking the 7th straight time that sales have fallen.
Apple’s newest iPad, a 12.9-inch iPad Pro is set to hit markets next month. The company has high hopes that the iPad Pro will appeal to professions, creatives and Enterprise users, endowing the device with more power and features than previous models.
Apple’s Mac computers and Laptop sales hit a record of their own. Sales rose in Q4 rose 3.4 percent, in line with forecasts from most analysts. Apple’s computer sales have remained solid, while rivals such as Microsoft have been suffering. That being said, While Apple may now own a larger slice of the computer market, the market as a whole is shrinking, meaning Apple may likely post its slowest growth rate in a couple of years.
Apple has yet to break out Apple Watch sales figures, instead lumping them together with ‘other products’ including the Apple TV, Beats headphones and iPods. Revenue for that segment grew 61 percent. Analysts have estimated that Apple sold almost 3.95 million Apple Watches in the most recent quarter.
[…”Sales of Apple Watch were also up sequentially and were ahead of our expectations,”…]
– Tim Cook, Apple CEO
Apple Watch sales will have some ways to go before they come close to touching iPhone sales, but it remains an important product. It’s a new market segment, and provides an opportunity for Apple to become less reliant on its iPhone sales going forward.