APPLE REPORTED its best-ever second quarter for sales on Tuesday, despite speculation that its flagship iPhone X has suffered lacklustre sales. In Apple’s first fiscal quarter, when the iPhone X initially went on sale, the average price of an iPhone jumped to almost $800. Apple reported resilient iPhone sales despite analysts predicting the high price of iPhone X was affecting its iPhone sales. Apple Watch had double digits yearly growth.
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The company on Tuesday announced fiscal second-quarter revenues of $61.1bn, beating analyst expectations and representing a 15 per cent year-on-year increase. It is the third quarter of growth in China after six quarters of double-digit declines. “It was a solid quarter”.
Despite suggestions that the iPhone X may have flopped, the company instead sold 52.2 million iPhones for the quarter, up from 50.8 million for the same period previous year.
Analysts were predicting 53 million in sales, but this quarter it was a meager 52.2 million.
As global handset profits dipped 1 per cent (year-on-year) in the fourth quarter of 2017, Apple X alone generated 35 per cent of the total handset industry profits, helping the iPhone maker grow 1 per cent (YoY) in the same quarter. Shares immediately rose by as much as 5 percent in after-hours trading after the earnings release. It has also been under pressure in China, where some consumers are shunning pricey iPhones and local rivals like Oppo and Vivo are grabbing market share. However, Apple offers an increasingly broad array of other iPhones to suit different budgets.
Husson said: “However, it indicates Apple will have to smartly manage its iPhone product portfolio and pricing, especially in Asia, where some countries still witness smartphone growth Apple has proven over the past few years that it masters the art and science of managing its product portfolio”.
The company saw particularly strong growth in its iPhone and “Services and Wearables” segments, with the iPhone X driving demand among its mobile customers. “That’s how I see iPhone X”.
Over the next six months, Munster predicted the buzz around Apple will be in anticipation of new phones, including three models coming out this fall, with one rumored to be 25 percent larger than current models.
Suppliers around the globe had warned of smartphone weakness, playing into fears that the company known for popularizing personal computers, tablets and smartphones had become too reliant on the iPhone. That included a collective $200 billion in share repurchases. That comes on top of an existing $210 billion buyback program to be completed during the fiscal third quarter. The group is raising the quarterly dividend 16% to $0.73 per share, and has promised a new $100bn share buyback.
Apple beat its Q2, 2017 performance when it has shipped 50.7 million iPhones.
Apple didn’t separate HomePod sales from the devices in its “other products” category, but the smart speaker has room to grow. Each service is performing well in each part of the world that Apple operates, and each is growing.
“Apps are carrying most (services revenue) right now, but Apple needs to get to a place where it’s mostly subscriptions and monthly fees and not just one-off downloads”, Ask said.
Other Products revenues increased 38% to $3.95 billion. Cook also noted that Apple Watch sales are up 50 percent year-over-year.
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As iPhone sales ebb and flow, sales of Services, as well as accessories to augment the iPhone experience, can help steady Apple’s earnings. Apple is developing new AirPods and over-the-ear wireless headphones. Operating expenses for the quarter will be between US$7.7 billion and US$7.8 billion. It’s also working on an upgraded Pro model with facial recognition for later this year, which could prop up sales of the device.
