What it is: Apple posted their latest earnings where sales increased from the previous year.
Here are some interesting facts from Apple’s latest earnings call:
• iPhone: 46.677 million units vs. 45.513 million in Q416 (+3% YOY), $28.846 billion revenue vs. $28.160 billion in Q416 (+2%)
• iPad: 10.326 million units vs. 9.267 million units in Q416 (+11% YOY), $4.831 billion revenue vs. $4.255 billion in Q416 (+25%)
• Mac: 5.386 million units vs. 4.886 million units in Q416 (+10% YOY), $7.170 billion revenue vs. $5.739 billion in Q416 (+25%)
• Services: $8.501 billion revenue vs. $6.325 billion in Q416 (+17% YOY)
• Other Products: $3.231 billion revenue vs. $2.373 billion in Q416 (+36% YOY)
Notice that Apple has sold more products than the previous year in all market segments. The iPhone actually showed the smallest amount of growth, most likely because the smartphone market is fairly mature and the main growth for the iPhone comes from people switching from Android with a handful of people buying a smartphone for the first time and choosing an iPhone.
Another pleasant surprise is that the iPad has finally returned to growth again after several quarters of declines. The iPad defined the tablet market where sales skyrocketed. The sales stagnated because iPads tend to last a long time where each improvement was only minor and not enough to justify getting a whole new model.
With the introduction of the iPad Pro, sales have increased once more. Most likely, sales will gradually increase as people finally retire their old iPads and replace them with newer models. In general, older iPads wind up being passed down to other family members who have less of a need for cutting edge technology like augmented reality, which will only run on the iPad Pro.
The Macintosh actually increased its sales while being more profitable than the iPad. Despite Apple largely ignoring the Macintosh product line, the Macintosh remains a steady contributor to Apple’s financial bottom line.
The Services category includes Apple Care, Apple Music, and Apple Pay. Notice that the Services category earns more than Macintosh sales. This will only increase as Apple Pay becomes more common and popular.
The Other Products category includes wearables like Air Pods, the Apple Watch, and even declining sales of the iPod. Despite bringing in the smallest amount of cash, this Other Products category is growing the fastest, which indicates that wearables like Air Pods and the Apple Watch are growing in popularity. As more people understand the real-time health monitoring features of wearables like the Apple Watch, expect the Apple Watch to slowly dominate the health care industry.
Apple still earns the bulk of their revenue from the iPhone, but the iPhone also drives sales of services like Apple Music. Once people get an iPhone, it’s easy for them to get an iPad as well since the two products work the same and can share apps. If you have an iPhone, it makes little sense to get an Android or Windows tablet since you won’t be able to share apps and you’ll need to learn how to use a different operating system in return for little or no advantage over an iPad.
Naturally once people like the iPhone, they’ll be more likely to consider a Macintosh or an Apple Watch. Right now the Apple Watch is more like an iPhone accessory than a stand-alone product, but the more people who use an iPhone, the more people will likely consider buying Apple’s other products.
With new features like augmented reality and face recognition defining the iPhone X, expect Apple to continue pushing technology forward. With corporations like Delta Airlines, Walmart, and health care institutions standardizing on Apple products, Apple has a bright future ahead of them.