Tech giant Apple Inc. has posted an increase in revenue for the quarter, beating analysts expectations.
Apple’s sales increased 16 per cent for the quarter compared to the previous corresponding period, bringing it to $61.1 billion fueled by the iPhone’s price increase. International sales accounted for 65 per cent of the quarter’s revenue.
The company’s profit saw a 25 per cent increase for the quarter, hitting $13.8 billion. Apple also announced a whopping $100 billion share buyback.
Tim Cook, Apple’s CEO, said they were thrilled with the report making it their “best March quarter ever, with strong revenue growth in iPhone, Services and Wearables.”
“Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20 per cent growth in Greater China and Japan,” Cook said.
But, according to Neil Saunders, managing director of GlobalData Retail, as good as the numbers are, there are some less satisfactory nuances in the underlying dynamics driving them. Foremost among these are sales of the iPhone.
“On the surface, revenue from iPhone sales, which rose by 14 per cent, looks strong,” Saunders said. “However, this is mostly pushed up by higher average prices rather than volume. Indeed, in unit sales terms, the number of iPhones sold rose by just three per cent over the same period last year.”
Saunders said given the high raw numbers that sit behind a three per cent unit uplift, such a criticism may seem petty.
“However, Q2 last year was a weak one for the iPhone with sales down in both volume and value terms, as such we would expect a much bigger uplift this time around,” he said. “That this didn’t materialize, and that unit growth is well below the run rate for new phone launches, signals that the replacement cycle is slowing down.”
“In essence, we maintain our view that Apple is struggling to persuade many consumers to update their phones,” he said. “As we have said before, this relative slowdown in iPhone sales is largely a function of Apple’s inability to come up with meaningful and valuable innovations that wow consumers.”
Apple’s quarterly results topped Wall Street’s lowered expectations as analysts’ consensus estimates had forecast a revenue of $60.82 billion. In recent weeks, several analysts have lowered their expectations for Apple on signs of slowing iPhone growth.
Apple has reported it sold 52.2 million iPhones during the first three months of the year, a three per cent increase from the previous corresponding period, but below analysts’ projection of 54 million iPhones. However, iPhone revenue jumped 14.3 per cent to $38.0 billion.
The tech giant has announced plans of a new $100 billion share buyback program and a 16 per cent increase in its quarterly dividends.
For the next quarter, Apple projected revenue of $51.5 billion and $53.5 billion, in line with analysts’ estimates of $51.6 billion in revenue.
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