Apple predicted the upcoming holiday selling season will yield its “biggest quarter ever” even after posting record-breaking figures for its fourth fiscal quarter.
Revenue in the current quarter is forecast to come in between $84 billion and $87 billion, driven partially by what CEO Tim Cook noted is “very strong” demand for the new iPhone X. The forecast figure is substantially higher than the $78.4 billion Apple made in the quarter after the iPhone 7 launched in 2016.
“We’re very bullish – we feel really great about the product lineup,” Cook commented during Apple’s earnings call.
Supply and demand
Cook steadfastly refused to breakout sales figures for the iPhone 8 and 8 Plus, but noted sales “exceeded expectations”. The iPhone 8 models have been the top selling models every week since their launch in September, and the iPhone 8 Plus had the fastest start of any large-screen model Cook said, adding the latter was “a bit of a surprise”.
According to Cook, a ramp in production of the iPhone X is “going well” and output is increasing each week. But Cook said he couldn’t predict when balance between supply and customer demand would happen, an apparent reference to reports the company held limited stocks of the premium device in the weeks leading up to orders being taken.
In its fiscal Q4 (covering the period from 2 July to 30 September) iPhone sales were up 3 per cent year-on-year to 46.67 million units, generating $28.85 billion in revenue. The company also saw strong gains in sales of its iPad tablets, with 10.3 million units sold.
Revenue from Apple’s services business was up 34 per cent to $8.5 billion. Executives said there are now more than 210 million customers on paid subscriptions through its App Store, up 25 million in fiscal Q4 alone.
All told, Apple reported record revenue of $52.6 billion in the quarter, up 12 per cent from the comparable 2016 quarter (which ran from 26 June to 24 September). Sales in the recent period were boosted by double-digit revenue growth in the Americas, Europe and Greater China.
Apple revenue in Europe up 20% to $13B, in Greater China up 12% to $9.8B N. America still dominates at $23B AAPL
— Diana Goovaerts (@DiaMariesbeat) November 2, 2017
Progress in China, India
Apple CFO Luca Maestri reported more than 30 per cent growth in Mexico, Turkey, the Middle East and Central and Eastern Europe. However, he said the company was “especially happy” to see renewed growth in China and noted revenue in India doubled year over year.
Maestri indicated Apple saw double digit iPhone growth in both mainland China and India, gaining share in those markets.
Cook said progress in India – which Canalys in late October announced had surpassed the US as the world’s second largest smartphone market behind China – stemmed from factors including an increased focus on building stores, sales channels, a local developer ecosystem and the right product lineup for the market. Apple also benefitted from operator efforts to address bandwidth issues in the country. Thanks to a push from operators including Bharti Airtel and Reliance Jio, service in India is “materially better” than it was 12 months ago, Cook said.
Despite the progress, Cook said Apple still has a “long way to go” in its India market development efforts.