7 biggest takeaways from Apple’s record Q4 earnings | Cult of Mac

7 biggest takeaways from Apple’s record Q4 earnings


Will Apple reach its own targets for Q2?
AAPL shares are on the rise.
Photo: Ste Smith/Cult of Mac

Apple surprised investors with its best Q4 earnings report ever today. The outrageous numbers dispelled doubts about the iPhone-maker’s strategy — and pushed Apple closer to becoming the world’s first trillion-dollar company.

With the launch of the iPhone X just hours away, Apple CEO Tim Cook had a lot to be happy about during the earnings call with investors. Analysts quizzed Cook and Apple CFO Luca Maestri on everything from iPhone 8 sales to how Apple plans to monetize its augmented reality efforts.

Here’s what we found out:

Apple is a finely tuned moneymaking machine

Tim Cook
Tim Cook holds Apple’s billionth iPhone.
Photo: Apple

Revenues during Q4 came in higher than analysts expected and Apple is predicting historic earnings next quarter, too. Everything is going great for the company right now, as it works as hard as it can to make as many iPhone X units as possible.

Reeling off the list of Apple’s recent successes, Cook said everything is pointing to continued growth and a phenomenal holiday season this year. “Literally, we’re firing on all cylinders,” he said.

iPhone 8 sales are solid

iPhone 8 Plus
The iPhone 8 Plus is selling better than expected.
Photo: Ste Smith/Cult of Mac

Shortly after the iPhone 8 launch, some reports claimed the iPhone 7 was already outselling the new device. Cook killed those claims during today’s call, saying the iPhone 8 and iPhone 8 Plus have been the most popular devices in terms of sales ever since they launched.

Apple wouldn’t give specific information on how many units were sold, or compare the iPhone 8 Plus to the launch of the iPhone 7 Plus. All Cook would say is that the iPhone 8 Plus got off to the “fastest start” of any plus-size iPhone. And Cook said that was a “positive surprise.”

Apple’s not afraid to try new things

iPhone X concept
Apple’s never done a staggered launch before
Photo: Ste Smith/Cult of Mac

Investors kept trying to get some sort of clue from Apple about how many iPhone 8 and iPhone 8 Plus units were sold, but Cook wouldn’t reveal specifics. 2017 marks the first time Apple ever launched an iPhone this late in the year. And the first time Apple has done a staggered launch.

Cook said they just sold the first iPhone X, so any kind of “mix discussion” about the popularity of particular models is just an estimate. “We’ve never done this before, so there’s no comparison here,” he said of the three iPhone models and the staggered launch. “So we’re going to learn something.”

The iPhone X isn’t that expensive

iPhone X first impressions
$1,000 for an iPhone isn’t too pricey, right?
Photo: Soldier Knows Best

Some analysts have worried that the iPhone X’s $1,000 price tag will mean a lot of people pass on the upgrade. Cook doesn’t see it that way at all, especially when you consider how most customers upgrade their iPhone through carrier payment plans.

Cook defended the “price elasticity” on the iPhone X, reminding us that on a payment plan, you can get a $1,000 phone for the price of a few coffees a month.

Everyone loves Apple Watch

Apple Watch Series 3
Apple Watch Series 3 is a hit.
Photo: Ste Smith/Cult of Mac

Apple Watch continues to grow and is the “best-selling and most loved smartwatch in the world,” Cook said.

As is Apple’s way with the wearable, Cook made no mention of specific sales figures. However, Cupertino claims sales were up 50 percent and grew for consecutive quarters. That’s thanks to the new Apple Watch Series 3 with LTE. The wearable’s launch got off to a rocky start due to an LTE bug, but that didn’t stop the sales momentum.

China is growing again

Apple store in Shanghai
China is important to Apple for many reasons.
Photo: FullbridgeProgram/Flickr CC

Mainland China is expected to eventually become Apple’s most important market, but growth has been sluggish the last few years. That’s finally starting to change, though.

iPhone, Mac and iPad market shares all grew in China during Q4. “The results were broad-based,” Cook says. “They were pretty much across the board.” The Hong Kong decline “moderated,” down some but less than in previous quarters.

Q1 2018 is going to be huge

apple earnings
Apple’s moneymaking machine is on a new level.
Photo illustration: Steve Smith/Cult of Mac

Based on Apple’s revenue guidance for investors next quarter, the company thinks this holiday season is going to be its best ever. With the iPhone X, iMac Pro and HomePod all coming soon, Apple’s armed with its strongest lineup of new products in years.

“We expect it to be our biggest quarter ever,” Cook said.

The long lines currently snaking around Apple stores around the globe in advance of tomorrow’s iPhone X launch indicate he might be onto something.

Additional reporting by Lewis Wallace.