Apple announced yet another bumper set of numbers, stating that revenue for the quarter had been driven by “record second quarter sales of iPhone and Mac and all-time record performance of the App Store”, although iPad was something of a fly in the ointment.
Unsurprisingly, Tim Cook, the company’s CEO, declined to provide much in the way of detail on the recent launch of Apple Watch, other than stating that it is “off to an exciting start to the June quarter”.
He did note that demand is greater than supply, although it was able to deliver more devices over the launch weekend than initially anticipated. Taking this into account, launches in additional markets could take place “sometime in late June”.
Luca Maestri, CFO, also noted that as a new product, Apple Watch margin will be “lower than the company average”.
On a group level, the company announced a profit of $13.57 billion for the quarter to 28 March, up 32.7 per cent year-on-year, on revenue of $58.01 billion, up 27.1 per cent. That sales figure is $14 billion more than the quarterly revenue of Microsoft, Google, Yahoo and Facebook — combined.
The company saw a 55 per cent hike in iPhone revenue, to $40.28 billion, driven by a 40 per cent increase in unit shipments to 61.17 million – indicating that the introduction of the new iPhone, accompanied by the iPhone 6 Plus phablet, has bolstered its average selling prices.
Cook said that the iPhone has been “extremely strong in emerging markets”, where sales are up 63 per cent year-on-year. Sales more than doubled in South Korea, Singapore, Taiwan and Vietnam, and were up 80 per cent or more in several other markets including Canada, Mexico, Germany and Turkey.
But iPad revenue fell by 29 per cent to $5.43 billion, on unit shipments which decreased by 23 per cent to 12.62 million. Luca Maestri, CFO, noted that while sales in Japan and China had been strong, the performance in other markets was “more muted”.
Cook acknowledged that following the launch of the large screen iPhone, the company is seeing some cannibalisation of iPhone sales, while at the high-end more svelte Macbooks are also having an impact. “As I’ve said before, we’ve never worried about that. It is what it is,” he observed.
And the CEO was also bullish on the long-term future for the device, once it has managed to get its inventory management in check and benefit from enterprise growth, as a result of its partnership with IBM.
“I still believe the iPad is an extremely good business over the long term,” he said.
In terms of regions, Greater China was the stand-out, bolstererd by strong sales during the Chinese New Year period. In fact the region became the company’s second-largest market, after the Americas. Revenue of $16.82 billion was up 71 per cent year-on-year.
Separately, Apple announced an extended capital return programme, which will total $200 billion by the end of March 2017. The share repurchase scheme has been increased to $140 billion from the $90 billion announced last year, accompanied by an 11 per cent hike in quarterly dividend.
Apple forecasts fiscal Q3 revenue of between $46 billion and $48 billion.