Apple defies doubters as iPhone sales, revenue rise - Mobile World Live

Apple defies doubters as iPhone sales, revenue rise

02 MAY 2018

Apple CEO Tim Cook batted down concerns about smartphone market saturation, as unit sales and revenue from the company’s iPhone continued to climb in its fiscal second quarter.

Indeed, Cook hailed the period (which ran to end-March) as the company’s best fiscal Q2 ever, noting in an earnings statement consumers “chose iPhone X more than any other iPhone” during the quarter and highlighting revenue growth “in all of our geographic segments”.

Though iPhone unit sales in fiscal Q2 2018 came in slightly below analyst estimates of 53 million, the 52.2 million total was up 3 per cent year-on-year, with double digit growth in markets including Japan, Canada, Mexico, and Central and Eastern Europe. Revenue from the devices jumped 14 per cent from the year-ago period to $38 billion, thanks in part to the hefty ($1000) price tag of the iPhone X.

During an earnings call, Cook said the iPhone X continued to be Apple’s top selling smartphone throughout the quarter.

Despite doubts from analysts and investors about whether or not the iPhone can sustain its growth trajectory, Cook said he believes there is still room to expand, pointing to India as a key target: “I don’t buy the view that the market is saturated. I don’t see that from a market point of view and certainly not from an iPhone point of view.”

Patrick Moorhead, of Moor Insights and Strategy, said the iPhone’s staying power “gives the company time to get its HomePod [smart speaker] business humming while the industry awaits augmented and virtual reality to kick in the next three to five years to provide growth”.

Wearables shine, services revenue soars
Apple’s wearables, including its Watch and AirPods earphones, also racked up major gains in fiscal Q2 2018, with record high sales and revenue which climbed nearly 50 per cent year-over-year. Cook did not break out either figure, but said Apple’s wearables business is “now the size of a Fortune 300 company”.

To put this into context, journalist Ina Fried noted on Twitter US-based aluminium producer Alcoa was number 300 on the Fortune 500 in 2017 with revenue of $9.3 billion.

Cook added wearables helped propel Apple’s Other Products segment, which also includes Apple TV and HomePod, to nearly $4 billion in revenue for the quarter, up 38 per cent from $2.9 billion in fiscal Q2 2017 (which ran to 1 April 2017).

While Cook was quick to praise AirPods as a “runaway hit”, he was noticeably quiet about initial sales of the company’s HomePod smart speaker. The device launched in February after a delay and is fighting an uphill battle against incumbent competitors Amazon and Google.

Apple’s services revenue also soared 31 per cent year-on-year to nearly $9.2 billion. Cook said growth is being driven across multiple geographies and services, including the Apple Store, Apple Music, iCloud and Apple Pay. He said Apple remains on target to double its 2016 services revenue figure by 2020.

iPad sales grew 2 per cent year-on-year to 9.1 million units with revenue up 6 per cent to $4.1 billion. Mac laptop sales dipped 3 per cent to 4.1 million units, but revenue remained flat at $5.8 billion.

All told, the company generated a net income of $13.8 billion in its fiscal Q2 2018, up from $11 billion in the comparable 2017 period. Revenue of $61.1 billion was up 16 per cent year-on-year.


Diana Goovaerts

Diana is Mobile World Live's US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana came to GSMA from her former role as Editor of Wireless Week and CED Magazine, digital-only...

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