Apple results: another record breaking year on the way?
Apple has posted its strongest second quarter results ever, potentially indicating another record year for Apple.
In a call with investors last night, Apple CEO Tim Cook said the company’s operating profit for the quarter, which ran from the beginning of January 2015 to the end of March, hit $17.7 billion, an increase of 30.4% on the previous year.
Revenue had grown by 27% compared to last year, hitting $58.2 billion. The results were largely driven by strong sales of the iPhone 6 and 6 Plus. According to Cook, global iPhone revenue increased by 55% year-on-year, with emerging markets performing above average, with 63% growth year-on-year for iPhone revenue.
While the iPhone 6 and 6 Plus have been doing well in terms of sales, as demonstrated by the Q1 2015 results, this quarter’s figures were in part bolstered in part by gift-giving over Chinese New Year in February.
The company’s Mac division, which includes both iMacs and MacBooks, also performed well, growing 10% year-on-year despite the overall downward trend of the PC market.
“The growth was led by portables and spurred by the updates to MacBook Air and MacBook Pro in March,” said Cook, according to a transcript from Seeking Alpha.
While not bringing in as much money for Apple as the iPhone or Macs, the App Store also did very well, with a record number of customers making purchases, leading to a 29% growth year-on-year in revenue.
There was one dark cloud on the horizon, however. Despite the growth in every other area of its business, iPad sales have continued to decline, shrinking by 20.5% year-on-year.
Cook sought to put a positive spin on this, saying that over the five years since its introduction the iPad “has been the number one tablet in sales … [and] has consistently been the number one tablet in enterprise”.
He also pointed out record sales of the tablet in Japan and China, and high customer satisfaction, which has repeatedly been blamed for low sales.
Another record year in the making?
With the caveat that nothing is set in stone, Cook said he expects Q3 revenue to increase about 30% to around $47 billion, compared to $37.4 billion in Q3 2014.
While both were announced in March, neither actually went on sale until early April. If they do well, they could give Apple’s revenues a significant boost. However, the MacBook certainly has some quirks, particularly the single USB-C port used for charging and plugging in USB sticks. There has been some resistance to this idea both from the point of view that users can’t have a thumb drive and charger plugged in at the same time and that, for the time being, they will need to use an adapter for most of their USB sticks anyway.
The Apple Watch is even more of an unknown quantity. Not only is it a totally new type of product for the company, but shipping dates are already stretching all the way into June (the final month of Q3). Cook acknowledged this, both in reference to the disparity of supply vs demand and “with any kind of new product, you wind up taking some time to fully ramp”.
In general, however, he seemed upbeat about Apple Watch.
“The customer response from people that have gotten theirs over the weekend have been overwhelmingly positive, and we’re far ahead of where we expected to be from an application point of view,” he said.
“I’m really happy where we are currently, and happy enough that we’re looking forward to expanding into more countries in late June,” he added.
As for the rest of the year, as well as the potential influence of the Apple Watch, the company is also expected to release one or two new iPhones in September. There won’t be a huge amount of time for these devices to make an impact on the market – Apple traditionally releases new iPhone on the second Tuesday in September, but its fiscal year finishes at the end of September. However, given the popularity of iPhones in general at launch, they may have a modest impact on the company’s full-year results.